Validity of reopening of assessment: allow production of balance-sheet and profit and loss accounts; notice set aside

Reopening of assessment was quashed because the assessing officer did not afford a proper opportunity to produce balance-sheet and profit and loss accounts; the impugned notice and order were set aside and the taxpayer must furnish all requisite documents within two weeks, whereupon the assessing officer must consider the documents and pass a fresh decision in accordance with law. The merits were left open for fresh adjudication by the assessing officer.

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Issues: Whether the order passed under Section 148A(3) and the consequential notice under Section 148 initiating reassessment for assessment year 2019-20 should be set aside for failure to afford the petitioner an opportunity to produce balance-sheet and profit and loss account and for not considering the petitioner's submission regarding filing under a new PAN.

Analysis: The order under Section 148A(3) and the notice under Section 148 were examined in light of the petitioner's repeated responses indicating willingness to furnish further documents and the petitioner's contention that returns had been filed under a newly issued PAN. It was noted that the petitioner had earlier participated in reassessment proceedings in respect of another assessment year and that the Assessing Officer had accepted that returns were filed under the new PAN. The Assessing Officer, however, proceeded to pass the impugned order and issue a reopening notice on the ground of non-production of balance-sheet and profit and loss account without affording a further opportunity to produce those documents despite the petitioner's stated readiness to furnish them. The Assessing Officer's failure to permit production of documents before passing the order necessitated fresh consideration of the matter by allowing the petitioner an opportunity to file the requisite documents.

Conclusion: The order dated June 25, 2025 under Section 148A(3) and the consequential notice dated June 25, 2025 under Section 148 are set aside. The petitioner is directed to furnish all requisite documents, including balance-sheet and profit and loss account, within two weeks and the Assessing Officer shall consider the submissions and documents and pass a fresh order in accordance with law. The Court has not gone into merits and all points are left open for decision by the Assessing Officer.

Ratio Decidendi: An order under Section 148A(3) and issuance of a notice under Section 148 cannot be validly made where the Assessing Officer has not afforded the assessee a proper opportunity to produce relevant documents urged to be furnished for reconciliation; failure to do so warrants setting aside the order and directing fresh consideration after giving opportunity to produce such documents.

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