Assessment order upheld despite department failing to provide transaction details as petitioner has pending appeal with interim stay

Madras HC disposed of writ petitions challenging assessment order dated 23.03.2022 under sections 147 r/w 144B. Department relied on information from DCIT (OSD)(Inv.) CBDT but failed to furnish particulars of five disputed transactions despite petitioner's requests. Court found no grounds for interference as petitioner had filed appeal before Appellate Commissioner with interim stay under section 220(6). HC directed appellate authority to dispose appeal within six months, continue existing stay until disposal, and consider bank statements filed by petitioner while seeking remand report from Assessing Officer.

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Issues:
Challenging an Assessment Order for the Assessment Year 2016-17 and seeking rectification of mistake in the same order.

Analysis:

The petitioner, engaged in Real Estate business, challenged the Assessment Order dated 23.03.2022, issued by the first respondent for the Assessment Year 2016-17. The petitioner filed a return of income on 14.10.2016, disclosing a total income of Rs. 91,12,576. Subsequently, the petitioner was asked to provide various documents related to transactions, including PAN, mobile numbers, sale deed, financial accounts, bank account statements, and details of the source of property purchase. The petitioner responded, stating limited transactions and commission paid to brokers. This led to a show-cause notice on 16.03.2022, followed by the impugned Assessment Order on 23.03.2022.

The petitioner had filed a statutory appeal under Section 246A of the Income Tax Act, 1961, before the Commissioner of Income Tax (Appeals). The Local Committee rejected a request for reconsideration. The petitioner also sought rectification under Section 154, but it was not considered. The petitioner argued that necessary information was not provided by the Department regarding disputed transactions, despite being made through bank accounts and rectifications by the buyer. The petitioner relied on Supreme Court decisions to support the claim that proving negatives without documents was unreasonable.

The Department contended that the petitioner was uncooperative, failing to provide requested documents, including a bank statement. The Department proceeded with the Assessment Order under Section 147 r/w 144B of the Income Tax Act, 1961, due to the petitioner's lack of cooperation. The Department argued that the pending appeal before the Appellate Commissioner rendered the writ petitions meritless.

The Court, after considering arguments from both sides and cited judgments, found no grounds to interfere with the Assessment Order. However, acknowledging the pending appeal and interim stay granted, the Court directed the expeditious disposal of the appeal within six months. The stay granted was to continue until the appeal's disposal, and the Appellate Authority was instructed to call for a remand report from the Assessing Officer based on the bank statement submitted to the Local Authority.

In conclusion, the Court disposed of the writ petitions without costs, providing directions for the expeditious resolution of the appeal and continuation of the stay granted.

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