Court allows filing of counter affidavit and rejoinder, stays re-assessment order. Emphasizes fair tax proceedings.

The court granted the respondents time to file a counter affidavit and the petitioner to file a rejoinder. Further hearings were scheduled, and the court stayed the effect of the re-assessment order dated 29.3.2022. The judgment emphasized the importance of a fair and evidence-based approach in tax proceedings to prevent unjust harassment and arbitrary actions against taxpayers.

---

---

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 and subsequent orders, Amendment application for quashing re-assessment order, Allegations of misleading information by respondents, Illegal and arbitrary initiation of proceedings, Stay on the effect of the re-assessment order.

Analysis:
The petitioner initially sought relief to quash a notice under Section 148 of the Income Tax Act, 1961, an order rejecting objections, and an approval order. Through an amendment application, the petitioner requested to quash a re-assessment order dated 29.3.2022. The petitioner, a private limited company, had filed its return of income for the assessment year 2017-18, disclosing a loss. The notice under Section 148 was based on an alleged cash deposit in the bank account, which the petitioner disputed. The objection was rejected, leading to the initiation of re-assessment proceedings. The National Faceless Assessment Centre approved the re-assessment order, alleging undeclared cash deposits. However, evidence presented indicated the cash deposit related to another entity, not the petitioner.

The respondent no. 2's instructions were deemed misleading, attempting to mislead the court by not addressing crucial information discrepancies. The initiation of proceedings against the petitioner was considered illegal and arbitrary, causing harassment. The petitioner, a cold storage company, primarily transacting in cash with farmers, had disclosed all cash deposits in its books and balance sheet. The reasons for initiating proceedings were found to be baseless, lacking evidence against the petitioner.

In response, the court granted the respondents time to file a counter affidavit and the petitioner to file a rejoinder. The court scheduled further hearings and stayed the effect of the re-assessment order dated 29.3.2022. The judgment highlighted the need for a fair and evidence-based approach in tax proceedings to prevent unjust harassment and arbitrary actions against taxpayers.

---