2019 (1) TMI 1882 - HC - Income Tax

Reopening of assessment u/s 147 - HELD THAT - The very same petitioner approached this Court and filed a writ petition in 2021 (5) TMI 417 - MADRAS HIGH COURT and challenged the said reopening proceedings. This Court, while entertaining the writ petition, has passed an interim order on 21.12.2018 permitting the assessment to go on and however, with a further direction to the Assessing Officer to keep the assessment order in a sealed cover. It is stated that the said order was communicated to the Assessing Officer on the very same day. However, he passed the assessment order on 21.12.2018 itself and communicated the same to the petitioner. Even though the AO is not prevented by this Court from passing the order of assessment, however, in view of the interim order granted by this Court, which was also communicated to him immediately, the Assessing Officer has to only keep the order of assessment in the sealed cover, without communicating the same to the Assessee. Assessing Officer has not given effect to the interim order granted by this Court on 21.12.2018. Sending the order of assessment to the Assessee has in effect defeated the purpose of granting interim order by this Court, more particularly, when the very re-opening proceedings of the assessment has already put to challenge before this Court as stated supra. Therefore, under the above stated facts and circumstances, this Court is fully convinced to stay the impugned order of assessment, pending disposal of this writ petition, as the order to be passed will certainly have a bearing on the present impugned order of assessment.

Summary

Issues:
1. Challenge against the order of assessment dated 21.12.2018 under Section 144 r/w 148 of the Income Tax Act, 1961 for the assessment year 2011-2012.
2. Allegation of non-compliance with the interim order by the Assessing Officer regarding keeping the assessment order in a sealed cover.

Analysis:
1. The petitioner contested the assessment order dated 21.12.2018, issued under Section 144 r/w 148 of the Income Tax Act, 1961, for the assessment year 2011-2012. The petitioner had previously filed a writ petition challenging the reopening of assessment proceedings. The Court had issued an interim order on 21.12.2018, allowing the assessment to proceed but directing the Assessing Officer to keep the assessment order sealed. Despite this directive, the Assessing Officer communicated the assessment order to the petitioner on 26.12.2018, contrary to the Court's instructions.

2. The Court noted that the Assessing Officer's actions in communicating the assessment order to the petitioner disregarded the interim order's purpose. Given that the reopening of assessment was already under challenge in a separate writ petition, the Court found that allowing the assessment order to be sent to the petitioner undermined the interim order's intent. Consequently, the Court decided to stay the impugned assessment order until the resolution of the ongoing writ petition challenging the reopening proceedings. This stay was deemed necessary as the outcome of the writ petition would impact the validity of the assessment order.

3. In light of the above circumstances, the Court ordered the stay of the impugned assessment pending the disposal of the writ petition. The Court scheduled the next hearing for the writ petition, along with the related case, on 12.02.2019 for the filing of counter-arguments. The decision to stay the assessment order was based on the failure of the Assessing Officer to comply with the Court's interim order and the potential impact of the pending writ petition on the assessment proceedings.