The Kerala High Court dismissed a writ petition on the ground that the penalty proceedings were initiated for unexplained cash deposit. The petitioner, Premalatha Korottoliprasantham, did not file her regular return under Section 139 of the Income Tax Act, 1961 for the assessment year 2018-19. The petitioner’s case was selected for scrutiny on the basis of the specific information by issuing notice under Section 148 of the Income Tax Act, 1961.
The case of the assessee was reopened on the following ground; ‘the assessee has cash deposits including bearers cheque aggregating to Rs. 1,46,38,460/- in his bank account.’ Notices under Section 142 (1) of the Income Tax Act dated 05.01.2023 and 28.02.2023 were issued to the petitioner. The petitioner did not comply with the notices. Further, communication dated 08.02.2023 fixing date of compliance 15.02.2023 was addressed to the petitioner requiring reply in respect of the said cash transactions in her bank account. The petitioner had failed to respond to the notices issued under Sections 148 and 142 (1) of the Income Tax Act.
In spite of several statutory notices and communication letter, the assessee has failed to file her return of income in response to the notice under Section 148 and did not respond to any of the notices. Therefore, a show cause notice dated 13.03.2023 was issued to the assessee fixing the date of compliance on 20.03.2023. thereafter, the assessee/petitioner has submitted her reply on 20.03.2023 and filed return of her income on 18.03.2023 declaring total income of Rs. 6,06,800/-. Considering the unexplained cash deposit to the extent of Rs. 1,46,38,460/-, the said income was added to the income of the petitioner as income from other sources under the provisions of Section 69A of the Income Tax Act. Accordingly the penalty proceedings were initiated for the unexplained cash deposit.
A Single Bench of Justice Dinesh Kumar Singh observed that “Instead of taking recourse to the appellate provision, the petitioner has approached this Court against the impugned assessment order. This Court does not find that the impugned assessment order is without jurisdiction or violation of any statutory provision which provides for completing an assessment proceedings for the escaped income. Thus, this writ petition has no merit and the same is hereby dismissed. However, it would be open to the petitioner to file appeal against the said assessment order if she is so advised.”