Revenue Counsel admits Genuinity of Unexplained Investment Later: Madras HC refuses Remand Request as Transaction Proven Genuine
It observed that once the genuineness of the transaction was established before the court, sending the matter back to the authorities was unnecessary.
The Madras High Court, in its recent ruling, refused to remand the matter as the transaction of the unexplained investment proved genuine. The income tax department’s counsel admitted the genuinity in the later stage of the adjudication and requested the remand. The writ petition challenged notices issued on 07.04.2022 and 23.03.2022, as well as orders passed on 05.03.2024 and...
The Madras High Court, in its recent ruling, refused to remand the matter as the transaction of the unexplained investment proved genuine. The income tax department’s counsel admitted the genuinity in the later stage of the adjudication and requested the remand.
The writ petition challenged notices issued on 07.04.2022 and 23.03.2022, as well as orders passed on 05.03.2024 and 07.04.2022, in which the income tax authorities treated the sum as “unexplained investment.”
The petitioner contended that the amount was obtained from the sale of jewellery, ritual items, and donations intended for temple construction, submitting detailed evidence to support the claim.
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The Revenue issued a show cause notice, treating the deposited sum as an unexplained investment and passing orders against the petitioner without considering the documents provided.
According to the petitioner, these funds were fully accounted for, and the authorities had failed to examine the submitted records adequately. The petitioner argued that the orders were passed without proper application of mind, ignoring the documentary proof provided.
The counsel of the department initially opposed the petition, maintaining that the amount was unexplained. However, upon reviewing the documents filed by the petitioner, the counsel admitted that the transaction was indeed genuine and requested the court to remand the matter back to the tax authorities for further review. The petitioner, having already presented comprehensive documentation, requested that the court quash the orders outright instead of remanding the case.
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Justice Krishnan Ramasamy, after examining the evidence, agreed that the transaction was genuine and found no need for remand. It observed that once the genuineness of the transaction was established before the court, sending the matter back to the authorities was unnecessary.
The court, thus, quashed the notices and orders issued by the income tax authorities, concluding that the impugned orders were made without proper consideration of the facts.
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