Court sets aside assessment order for 2018-19 due to discrepancies, emphasizes fair reassessment process

The court set aside the assessment order for the assessment year 2018-19, citing discrepancies in the Assessing Officer's claims of non-response and untraceability of the petitioner. The court found the petitioner's interactions with tax authorities and established addresses contradicted the Assessing Officer's assertions. Consequently, the court quashed the assessment order and associated notices, emphasizing the importance of a fair reassessment process. A fresh adjudication was directed, allowing the petitioner to submit necessary documents within two weeks. Failure to comply would lead to the Assessing Officer proceeding based on existing responses but requiring a personal hearing for the petitioner, focusing solely on procedural irregularities.

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Issues:
Impugning assessment order for assessment year 2018-19 on grounds of lack of application of mind and incorrect reasons.

Analysis:
The petitioner challenged the assessment order dated 30th April 2021 for the assessment year 2018-19, alleging that it was passed without proper consideration and on incorrect grounds. The Assessing Officer relied on the fact that the petitioner did not respond to various notices, leading to a best judgment assessment under section 144. However, the petitioner had responded to earlier notices under sections 143(2) and 142(1), which were not acknowledged in the impugned order. The petitioner's claim that responses were filed to subsequent notices was disputed by the Respondent. The court found discrepancies in the Assessing Officer's claim that the petitioner was unresponsive and untraceable, especially considering the petitioner's registered office address and business premises. Consequently, the assessment order was deemed unacceptable and set aside, along with consequential notices under various sections of the Income-tax Act, 1961.

The court noted that the Assessing Officer's assertion of non-response and untraceability of the petitioner was unfounded, given the petitioner's documented interactions with tax authorities. The petitioner's company status under the Companies Act, 1956, and the clarity of its registered and business addresses contradicted the Assessing Officer's claims. The court found the verification unit's reports on the petitioner's location unsatisfactory, as they failed to account for the petitioner's established addresses. Additionally, attempts to serve notices at an address disclaimed by the petitioner further weakened the Respondent's position. As a result, the court quashed the assessment order and associated notices, emphasizing the need for a fair reassessment process.

The court annulled the assessment order dated 30th April 2021 and directed a fresh adjudication, preserving the petitioner's rights and arguments. The petitioner committed to submitting all necessary documents within two weeks, addressing any outstanding requirements from previous notices. Failure to comply would allow the Assessing Officer to proceed based on existing responses but necessitated a personal hearing for the petitioner. Notably, the court refrained from commenting on the case's merits, focusing solely on procedural irregularities. The petition was disposed of, ensuring a fair and thorough reassessment process for the petitioner.

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