Voluminous Cash Book Upload Demand by CIT(A): Kerala HC Refers Matter to Local Verification Unit for Physical Verification [Read Order]

In a recent ruling, the Kerala High Court has directed the National Faceless Assessment Centre (NFA) to refer the verification of a voluminous cash book to a local Verification Unit, rather than insisting on a complete online upload by the assessee.

The petitioner, Poovachal Rural Housing Co-operative Society Ltd., an assessee under the Income Tax Act, challenged a notice issued under Section 142(1) for the assessment year 2014-15. The notice required the society to produce its entire cash book for the financial year 2013-14. The petitioner contended that the cash book ran into several thousand pages, making it impractical to upload the entire document online for the Faceless Assessment Authority to review.

The assessee contended that the demand was overly burdensome, technically challenging, and an unreasonable administrative requirement. The assessee, represented by counsel, argued that the cash book in question was exceptionally large, making a digital scan and upload a practically impossible and disproportionate task.

It was submitted that such a demand placed an undue burden on the assessee and was not in accordance with the principles of natural justice and fair procedure. The petitioner suggested that alternative, less intrusive methods of verification, such as a physical inspection of the books, should be sufficient.

During the hearing, the standing counsel for the Income Tax Department submitted that uploading such a voluminous document was unnecessary. Instead, it was suggested that the document could be physically verified by the Verification Unit under the Principal CIT(VU), Kochi.

Accepting this practical solution, the single Bench of Justice Ziyad Rahman A.A. disposed of the writ petition. The Court directed the Faceless Assessment Centre to refer the matter to the concerned Verification Unit for examination of the cash book. The LVU was instructed to conduct a physical verification of the cash book at the assessee's premises and submit a report to the CIT(A).

The Court further held that the verification and the subsequent completion of the assessment proceedings should be done "as expeditiously as possible," providing a balanced resolution to the procedural difficulty faced by the assessee.

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