Court quashes tax assessment, allows bank account operation with conditions. The Court quashes the assessment order under Section 143(3) of the Income Tax Act, 1961, directing the reassessment within six weeks. The petitioner is ...
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Court quashes tax assessment, allows bank account operation with conditions.
The Court quashes the assessment order under Section 143(3) of the Income Tax Act, 1961, directing the reassessment within six weeks. The petitioner is allowed to operate his bank account with M/s Kotak Mahindra Bank, subject to maintaining a minimum balance. Additionally, the petitioner is permitted to operate three accounts with the bank, maintaining a cumulative balance of Rs. 75,00,000 across all accounts as stipulated.
Issues involved: The petitioner challenges the assessment order under Section 143(3) of the Income Tax Act, 1961 and seeks the lifting of the attachment of his bank account with M/s Kotak Mahindra Bank.
Details of the Judgment:
1. The petitioner contests the assessment order, arguing that transactions from 2014 to 2019 cannot be assessed for the year 2021-22, resulting in additional income. The petitioner was not served with a notice under Section 144, although he appeared before the assessing officer, rendering the order without jurisdiction.
2. The respondents defend the assessment, stating that undisclosed advances were brought into assessment as they were not reflected in the books of accounts. However, the transactions in question predate the current assessment year, necessitating a reconsideration of the assessment.
3. The Court notes that the transactions under scrutiny relate to previous assessment years and should have been considered in that context. The assessment order failed to address this critical aspect, warranting intervention.
4. Regarding the petitioner's ability to operate his bank account during the reassessment, the respondents propose a deposit of 20% of the remaining amount, while the petitioner argues against such conditions, citing potential business repercussions.
5. After considering the submissions and the remaining balance, the Court quashes the assessment order and directs the third respondent to reframe the assessment within six weeks. The petitioner is allowed to operate his account with M/s Kotak Mahindra Bank, subject to maintaining a minimum balance.
6. In a subsequent order, the Court permits the petitioner to operate three accounts with M/s Kotak Mahindra Bank, maintaining a cumulative balance of Rs. 75,00,000 across all accounts as stipulated in the earlier order.
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