Addition of Unexplained Income u/s 69 of Income Tax Act in absence of Proper Documents: Kerala HC allows one more Opportunity Considering Mental Illness of MD [Read Order]
![Addition of Unexplained Income u/s 69 of Income Tax Act in absence of Proper Documents: Kerala HC allows one more Opportunity Considering Mental Illness of MD [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/02/Kerala-High-Court-Income-Tax-Unexplained-income-Section-69-of-the-income-tax-act-MD-mental-illness-in-income-tax-case-TAXSCAN.jpg "Addition of Unexplained Income u/s 69 of Income Tax Act in absence of Proper Documents: Kerala HC allows one more Opportunity Considering Mental Illness of MD [Read Order]")
In the case of the addition of unexplained income under section 69 of the Income Tax Act, 1961 made in the absence of Proper Documents, the Kerala High Court allowed one more opportunity to the assessee considering the mental illness of Managing Director. Lavia Infra Ltd, the petitioner company was incorporated under the provisions of the Companies Act, 2013. The petitioner company is...
In the case of the addition of unexplained income under section 69 of the Income Tax Act, 1961 made in the absence of Proper Documents, the Kerala High Court allowed one more opportunity to the assessee considering the mental illness of Managing Director.
Lavia Infra Ltd, the petitioner company was incorporated under the provisions of the Companies Act, 2013. The petitioner company is engaged in trading of construction materials and hardware goods. It appears that the petitioner company had a run with bad financial management, and therefore, the Bank of India has proceeded against the company under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. An application had been filed by the Bank of Baroda for recovery of 20.13 crores.
The petitioner did not file the return of his income for the assessment year 2019-2020. The petitioner was issued with a notice under Section 148 of the SARFAESI Act, however, no reply was filed, and thereafter, an order under Section 148(b) came to be passed.
The petitioner, thereafter, was issued with a notice under Section 148 for filing the return, and the petitioner did not file the return nor comply with the notices issued under Section 142(1) of the Income Tax Act,1961. A show cause notice under Section 144 of the Income Tax Act was issued. Thereafter, notice dated 09.01.2024 has been issued for adding the variation as pointed out ie, Rs.4,33,57,333/-. The petitioner has not filed any reply to the said show cause notice and the petitioner has sought time till 20.01.2024.
Dr. K.P Pradeep, counsel for the petitioner and the Adv. Ajith Kumar, the Standing counsel for the respondents.
The petitioner submitted that the Managing Director of the company is suffering from a certain kind of mental illness and for that reason, the relevant documents could not be submitted by the petitioner’s company before the Income Tax Department. The petitioner company may be granted a further time of six weeks for producing the relevant documents, as a last chance. Considering the illness of the Managing Director.
The Standing counsel for the respondents submitted, that for the past year the petitioner has been seeking time and has not complied with the notices issued to him. The petitioner has not filed its return. There is an unexplained income of the petitioner of Rs.4,33,57,333/-.
A single judge bench of Justice Dinesh Kumar Singh disposed of the present writ petition with liberty to the petitioner to file the return and submit all the requisite documents in response to the notice, within six weeks, failing which, the revenue will proceed to finalize the assessment under Section 144 of the Income Tax Act.
To Read the full text of the Order CLICK HERE
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