Reassessment justified as huge cash was deposited against PAN of assessee being non-filer of ITR: HC

Case Details: Farmacia Molio v. ITO - [2022] 137 taxmann.com 256 (Bombay)

Judiciary and Counsel Details

• • M.S. Sonak and R.N. Laddha, JJ.
  • Gaurang Panandikar, Adv. for the Petitioner.
  • Ms. Susan Linhares, Standing Counsel for the Respondent.

Facts of the Case

Assessing Officer issued notice for reopening assessment in case of assessee on the ground that a cash deposit of the huge amount of Rs. 4.39 crores was made in Goa Urban Co-operative Bank and the PAN number used to make such a huge deposit was that of the assessee firm.

Further, despite having prima facie made such a large cash deposit in a non-current account, the assessee chose not to file any income tax returns. The assessee challenged the impugned notice and order seeking to reopen the assessment.

High Court Held

The Bombay High Court held that the circumstance of discovery of huge cash deposits against the assessee’s PAN number and the circumstance that for this assessment year, the assessee chose not to file any return at all were sufficient as well as relevant to the formation of reason to believe that income had escaped assessment. Therefore, no case was made out to interfere with impugned notice and impugned order.

Case Review

• • Mohanlal Champalal Jain v. ITO [2019] 102 taxmann.com 293 (Bom.) (para 11) distinguished.

List of Cases referred to

• • Mohanlal Champalal Jain v. ITO [2019] 102 taxmann.com 293 (Bom.) (para 3)
  • ITO v. Mohanlal Champalal Jain [2019] 111 taxmann.com 67/267 Taxman 391 (SC) (para 3)
  • Asa John Devinathan v. Addl. CIT [1980] 126 ITR 270 (Mad.) (para 12)
  • CIT v. Agarwalla Bros. [1991] 189 ITR 786 (Patna) (para 12)
  • Phool Chand Bajrang Lal v. CIT [1993] 69 Taxman 627/203 ITR 456 (SC) (para 12)
  • Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 59 Taxman 17/191 ITR 662 (SC) (para 12)
  • New Delhi Television Ltd. v. Dy. CIT [2020] 116 taxmann.com 151/271 Taxman 1/424 ITR 607 (SC) (para 13).