2024 (3) TMI 107

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....cted for Computer Aided Scrutiny and a notice under Section 143(2) of the Income-tax Act was issued to the petitioner on 29.06.2021. Upon receipt of a notice dated 25.08.2023 calling upon the petitioner to explain the discrepancy between the closing stock of lingerie for assessment year 2019-20 and the opening stock for assessment year 2020-21, the petitioner requested for further time by communication of 08.09.2023. The petitioner also requested for a personal hearing through video conference before completion of such assessment proceedings. Thereafter, a show cause notice dated 12.09.2023 was issued indicating that a variation is proposed with regard to the discrepancy in stock. Such show cause notice was replied to on 19.09.2023 by stati....

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....rough video conferencing or video telephone is mandatory if a request for personal hearing is received. Since the reply to the show cause notice and the communication that preceded it contained a request for personal hearing, he submits that the impugned draft assessment order is vitiated by failure to provide such personal hearing. 4. These contentions were vigorously opposed by Mr.R.S.Balaji, learned senior standing counsel for the respondent. At the outset, he submits that the challenge is to a draft assessment order and that the petitioner had an alternative remedy by way of approaching the Dispute Resolution Panel. In order to substantiate the contention that this Court should decline to exercise jurisdiction under such circumstances,....

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....impugned draft assessment order records as under: "From the above it can be seen that value of closing stock is more by Rs. than the value of opening stock of previous assessment year and the assessment year under consideration. However, as noted from the financials of the assessee, the difference in numbers in closing and opening stock of Lingerie, of previous assessment year and the assessment year under consideration, in Trading as well as Manufacturing account the closing stock was found to be less by 180323 in numbers which may lead to the conclusion that the value of on lingerie about Rs. 0.0665 which cannot be true. The less value shown by the assessee in opening stock of current year may lead to the conclusion that the assessee is....

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.... the show cause notice did not contain the above quantification of the addition, the petitioner was deprived of the opportunity to respond thereto. It is also significant to notice that expenditure to the extent of Rs. 9,01,61,500/-, which was incurred in the previous year, was disallowed without putting the petitioner on notice with regard to such proposed disallowance in the above mentioned show cause notice. 9. Apart from the above, it should not be lost sight of that the petitioner had expressly requested for a personal hearing through video conferencing and the provision of such personal hearing is mandated under clause (viii) of sub-section 6 of Section 144B of the Income-tax Act. 10. For all these reasons, the impugned draft assess....