Jammu & Kashmir High Court - Srinagar Bench
Mehmood Askari vs Union Of India Through Secretary on 23 May, 2025
Author: Sanjeev Kumar
Bench: Sanjeev Kumar
IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT SRINAGAR
Reserved on: 19.05.2025.
Pronounced on: 23.05.2025
WP(C) No. 1147/2025
MEHMOOD ASKARI
S/O: SHEIKH GHULAM ALI
R/O: KHARDONG PASHKUM, KARGIL, LADAKH
PIN CODE: 194103
...PETITIONER(S)
Through: - Mr. Huzaif Ashraf, Advocate
Vs.
1. UNION OF INDIA THROUGH SECRETARY, MINISTRY OF
FINANCE, GOVERNMENT OF INDIA, CENTRAL SECRETARIAT,
NEW DELHI.
2. PRINCIPAL COMMISSIONER OF INCOME TAX, RAJBAGH,
SRINAGAR.
...RESPONDENT(S)
Through:- Mr. T.M Shamsi, DSGI with
Mr. Faizan Ahmad, Advocate for R-1.
Mr. Umar Rashid, Advocate for R-2.
CORAM:
HON'BLE MR. JUSTICE SANJEEV KUMAR, JUDGE
HON'BLE MR. JUSTICE SANJAY PARIHAR, JUDGE
JUDGMENT
Per: Sanjeev Kumar-J:
1. The petitioner invokes an extraordinary jurisdiction
vested in this Court under Article 226 of the Constitution of
India to seek an appropriate writ, order or direction in the
nature of a writ of certiorari for quashing and setting aside
an order dated 11th March, 2025, passed by the Principal
Commissioner of Income Tax, Srinagar, under Section 264
of the Income Tax Act, 1961 ["the Act"]. The petitioner also
challenges an assessment order passed by the Assessing
Authority for the assessment year 2016-17 by Income Tax
Officer Ward 25(2) (1) Mumbai ["the Assessing Authority"].
2. Before we proceed to examine the grounds of challenge
urged by the learned counsel for the petitioner, we deem it
appropriate to briefly set out a few material facts.
3. The Assessing Authority had noticed a cash deposit of
Rs. 60,15,542/- by the petitioner in bank account No.
0096010100001368 held with J&K Bank during the
financial year 2015-16, relevant to the assessment year
2016-17. It was also found by the Assessing Authority that
the petitioner had neither filed the original return of income
nor any response to the notice under Section 148 of the Act.
The Assessing Authority was thus prima facie of the opinion
that the aforesaid amount of deposit had remained
unexplained by the petitioner for the assessment year 2016-
17. Accordingly, a notice under Section 148 of the Act dated
30.07.2022, was served upon the petitioner calling upon
him to comply with the said notice within a period of thirty
days. The notice was not complied with by the petitioner.
This was followed by notices under Section 142(1) of the Act
dated 01.05.2023 and 09.05.2023, asking the petitioner to
file the details/explanation/documents/evidence etc.
However, the petitioner again failed to comply with the
aforesaid notice.
MIR ARIF MANZOOR WPC No. 1147/2025
5. The Investigation Wing of the Income Tax Department
conducted an investigation and submitted its report
indicating that the J&K Bank had not been filing their
Annual Information Return properly and correctly, as is
mandated and required under Section 285BA of the Act.
Pursuant to the investigation report prepared by the
Investigation Wing, a notice under Section 133(6) of the Act
was issued to the J&K Bank calling for the account
statement of the petitioner for the assessment year 2016-17.
The J&K Bank furnished the bank statements of the
petitioner, which indicated different deposits made by the
petitioner in four different accounts. A show cause notice
dated 16.05.2023 was issued to the petitioner for completing
the assessment under Section 144 of the Income Tax Act.
The notice was based upon the information on record, and
the petitioner was asked as to why an amount of Rs.
1,70,01,255/- should not be added to his income for the
assessment year under consideration.
6. The petitioner responded to the show cause notice and
in his written submission dated 20.05.2023, submitted to
the Assessing Authority, it was claimed by the petitioner
that he was a resident of Kargil and, therefore, exempted
from paying Income Tax under Section 10(26A) of the Act.
He also submitted a resident certificate dated 28th February,
2022, issued by the Tehsildar, Kargil. He indicated the
MIR ARIF MANZOOR WPC No. 1147/2025
source of income as earnings from conducting religious
tours to Syria, Iran and Iraq for the residents of Kargil. It
was thus claimed that the income was derived by him on
account of these tours.
7. The reply was considered by the Assessing Authority
and vide order dated 26th May, 2023, an assessment order
for the assessment year 2016-17 was passed by the
Assessing Authority and the total income determined by the
Assessing Authority for payment of Income Tax was Rs.
1,70,01,255/-. It was provided in the assessment order that
a penalty notice under Section 271(1)(c) of the Act would be
issued separately.
8. Feeling dissatisfied and aggrieved by the assessment
order dated 26th May, 2023, a revision petition under
Section 264 of the Act was filed by the petitioner before the
Principal Commissioner of Income Tax, Srinagar ["the
Principal Commissioner"]. The Principal Commissioner has
declined to interfere with the order of assessment and has
dismissed the revision petition filed by the petitioner vide
order dated 11th March, 2025, impugned in this petition.
9. The impugned order passed by the Principal
Commissioner and the order of assessment passed by the
Assessing Authority are called in question by the petitioner
primarily on the ground that the petitioner, being a
Schedule Tribe and a resident of Union Territory of Ladakh,
MIR ARIF MANZOOR WPC No. 1147/2025
is exempted from payment of Income Tax under Section
10(26A) of the Act. A strong reliance is placed by the
petitioner on a resident certificate issued by the Tehsildar,
Kargil on 28th February, 2022, and the Schedule Tribe
certificate bearing No. 1583/BG/STC dated 17th May, 2019,
issued by the same authority.
10. Having heard learned counsel for the parties and
perused the material on record, we are of the considered
opinion that the order passed by the Principal Commissioner
dated 11th March, 2025, impugned in this petition does not
suffer from any error of law or fact and, therefore, cannot be
interfered with in these proceedings. With a view to claiming
the benefit of exemption envisaged under Section 10(26) of
the Act, an assessee must satisfy the following three
conditions:-
(i) The person claiming exemption should be a
member of a Schedule Tribe as defined in clause
(25) of Article 366 of the Constitution.
(ii) The assessee should be residing only in the
Ladakh region of the State of Jammu and
Kashmir.
(iii) The income in respect of which exemption is
claimed must be an income which accrues or
arises to him from any source in the specified
area by way of dividend or interest on securities.
11. In the instant case, as is apparent from the order of the
Assessing Authority, the petitioner had failed to file the
MIR ARIF MANZOOR WPC No. 1147/2025
return for the assessment year 2016-17 despite having been
registered with the Income Tax Department under PAN No.
BLIPS6355L. At the time of applying for the PAN, the
petitioner had given his address as Room No. 25, C Block,
Bandukwala Bldg, Opp, Jail Road North, Mumbai. Pursuant
to the show cause notice issued under Section 144 of the
Act, calling upon the petitioner to show cause as to why an
amount of Rs. 1,70,01,255/- should not be added to his
income for the year under consideration. The petitioner
could not furnish relevant material/documents to satisfy the
conditions explicitly laid down in Section 10(26) of the Act.
He did submit a Schedule Tribe certificate dated 17th May,
2019, but could not prove that during the relevant year he
was residing anywhere in Ladakh region. He also could not
sufficiently demonstrate before the Assessing Authority that
the amount which was found deposited in his accounts
maintained with the J&K Bank, was income derived from
source/sources in the specified area. Whether a person is or
was residing in the specified area and whether the income in
respect of which he is claiming exemption is derived from a
source/sources in the said area is a question of fact to be
determined by the Assessing Authority on the basis of
evidence produced before it.
12. The petitioner had claimed that he had earned the
income in question by conducting religious tours to Syria,
MIR ARIF MANZOOR WPC No. 1147/2025
Iran and Iraq for the residents of Ladakh. However, he could
not furnish any proof to the satisfaction of the Assessing
Authority. The petitioner also failed to furnish any proof that
he was residing in the specified area i.e. in the Ladakh
region. The resident certificate issued on 28th February,
2022, by the Tehsildar was not proof enough to demonstrate
that during the assessment year 2015-16 and 2016-17, the
petitioner was residing in the Ladakh region. The Assessing
Authority, thus, rightly found the claim for exemption under
Section 10(26) of the Act filed by the petitioner, not
supported by any evidence. Consequently, an order of
assessment came to be passed, which the petitioner called
in question in a revision petition filed under Section 264 of
the Act before the Principal Commissioner. The Principal
Commissioner has concurred with the findings of fact
arrived at by the Assessing Authority.
13. It has been aptly noted by the Principal Commissioner
that the petitioner had given his address as Mumbai, as is
evident from his PAN, and was accordingly assessed by the
jurisdictional Assessing Authority i.e., Income Tax Officer,
Ward-25(2)(1), Mumbai. This was indication enough to show
that the petitioner was conducting his business of Tour and
Travels from Mumbai and, therefore, no income which
accrued or arose to him from any source in the Ladakh
region. All these facts, including the reasoning given by the
MIR ARIF MANZOOR WPC No. 1147/2025
Assessing Authority, persuaded the Principal Commissioner
to dismiss the revision petition of the petitioner and uphold
the order of assessment passed by the Assessing Authority.
14. We see no reason or justification to take a view
contrary to the concurrent view taken by the two Authorities
under the Act. The petitioner having failed to satisfy the
three conditions laid down in Section 10(26) of the Act, is
not entitled to claim exemption of his entire income. What is
agitated before us by the learned counsel for the petitioner
clearly falls in the realm of disputed questions of fact. The
two Authorities under the Act i.e., Jurisdictional Assessing
Authority and the Principal Commissioner, having
concurrently determined the questions of fact, this Court in
the exercise of its jurisdiction under Article 226 of the
Constitution of India, would be loath to interfere with such
concurrent findings of fact arrived at by two quasi-Judicial
Authorities performing adjudicatory functions under the Act.
15. For the foregoing reasons, we find no merit in this
petition and the same is, accordingly, dismissed.
(SANJAY PARIHAR) (SANJEEV KUMAR)
JUDGE JUDGE
Srinagar,
.05.2025
"Mir Arif"
Whether approved for reporting? Yes
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