Reassessment cannot stand when existing record materials are ignored; consequential rectification rejections also fall with the assessment.

A reassessment cannot stand where material already on record, including Form-WW and the auditor's report showing reversal of input tax credit, was not considered before the assessment orders were passed. The Madras HC therefore set aside the reassessments for the relevant years and remanded the matters for fresh assessment after considering all documents and giving the assessee an opportunity of hearing. Because the rectification applications were directed against those assessment orders, the rejection orders could not survive independently once the assessments were annulled, and they were also set aside.

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Issues: (i) Whether the reassessment orders for the assessment years 2013-14 and 2014-15 were sustainable when the assessee's documents and reversal of input tax credit were on record; (ii) Whether the orders rejecting the rectification applications could survive once the assessment orders were set aside.

Issue (i): Whether the reassessment orders for the assessment years 2013-14 and 2014-15 were sustainable when the assessee's documents and reversal of input tax credit were on record.

Analysis: The assessment was completed without considering the documents already available on the file, including the Form-WW and the auditor's report indicating reversal of input tax credit to the extent of 3% from 11.11.2013. The relevant material was in the respondent's records before the assessment orders were passed, and the assessments were therefore not made on a full consideration of the available materials.

Conclusion: The assessment orders were set aside and the matters were remanded for fresh assessment after considering all documents and affording an opportunity of hearing.

Issue (ii): Whether the orders rejecting the rectification applications could survive once the assessment orders were set aside.

Analysis: The rectification applications were filed against the assessment orders. Once the underlying assessment orders were annulled and the assessments were directed to be redone, the rejection orders could no longer stand independently.

Conclusion: The orders rejecting the rectification applications were also set aside.

Final Conclusion: The assessee succeeded in obtaining remand of the assessments and consequential setting aside of the rectification rejections, with fresh consideration directed in accordance with law.

Ratio Decidendi: An assessment cannot be sustained when material documents already on record are not considered, and any consequential order rejecting rectification falls with the underlying assessment once it is set aside.

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