ABDUL VAHAB Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner in the above writ petition challenges the assessment order, Exhibit P1, purportedly passed under Section 175 read with Section 174(3) of the Income Tax Act (for short "the Act") as confirmed in revision by Exhibit P4 order. The facts of the case relevant for the consideration of the writ petition are that the petitioner was accosted by the Sub Inspector of Police, Koduvally while on night patrol duty and unaccounted cash amounting to Rs. 1,74,000/- was seized from him. The seized amount was deposited with the Judicial First Class Magistrate-I, Thamarasserry which, later, was released to the petitioner-assessee after setting apart 33% towards income tax dues. Thereafter notice under Section 142(1) was issued to the petitioner and since no return was filed, a letter was issued communicating the proposal to complete the assessment ex parte. In response to the said communication, the petitioner-assessee filed a reply, pursuant to which a statement was recorded from him, wherein the petitioner furnished some materials to explain the source, which was disbelieved by the income tax authorities. The return of income filed by the assessee declaring total income of Rs. 36,000/- was rejected and assessment was completed adding the unaccounted cash recovered from the petitioner by Exhibit P1 order. The subsequent revision filed by the petitioner was also dismissed by Exhibit P4 order.

(2.) The counsel for the petitioner would urge before me that Section 175 is only with respect to attachment and Section 175 postulates a prima facie satisfaction of the assessing officer that the individual against whom assessment is proposed may leave India during the assessment year or shortly after its expiry and it definitely postulates a notice under Section 174(4) before an assessment is completed. The counsel for the petitioner would contend that the notice issued under Section 142(1) cannot lead to an assessment under Section 174(4) and he is prejudiced in so far as the invocation of Section 174(4) disentitles the petitioner from pursuing the appellate remedies.

(3.) The counsel for the Revenue, per contra, would contend that it was after proper notice that assessment was completed by Exhibit P1 and the assessment is one completed under Section 175 and not under Section 174 and, hence, the non-obstante clause of Section 175 provides for an assessment to be completed in the event of any person appears to be likely to transfer a property to defeat the charge under Section 4 of the Act.