2021 (10) TMI 1287 - HC - Income Tax

Reopening of assessment u/s 147 - documents satisfactorily to explain the deposits or not shall be set out in the assessment order when it is made de novo - HELD THAT - The case on hand is a case of non-consideration of support materials and not giving any reason as to why reply is unacceptable, leading to conclusion that the deposits have not been satisfactorily explained. Respondent may have considered, as contended by learned Revenue counsel, but the point remains that it could have been set out if not eloquently articulated in the impugned order as already delineated to supra. Considering the unique facts and circumstances of the case as a one off matter, captioned writ petition is sent back to respondent. Impugned order dated 28.09.2021 bearing reference DIN Documen is set aside solely for the purpose of facilitating the respondent to redo the assessment by considering what according to writ petitioner inter-alia support affidavit - The sequitur to the above limb is, though obvious, it is made clear that this Court has not expressed any view or opinion on the merits of the matter.

Summary

Issues:
Assessment order under Section 144 read with Section 147 of the Income-tax Act, 1961 challenged for non-consideration of support materials and lack of reasoning.

Analysis:
The main writ petition challenged an assessment order under the Income-tax Act, 1961. The petitioner, coming from a disadvantaged economic background, had purchased tractors in public auction and sold them to farmers. The petitioner submitted affidavits from farmers to support her claim. However, the impugned order did not demonstrate consideration of these affidavits and lacked reasoning. The Court, without opining on the assessment's handling, deemed it appropriate to send the matter back to the respondent for reassessment, emphasizing the need to consider the support affidavit and other documents filed by the petitioner. The new assessment order should clearly state reasons for accepting or rejecting the explanations provided by the petitioner.

The Revenue counsel acknowledged that the petitioner's reply was not disregarded entirely but admitted to the non-consideration of supporting materials and the absence of reasons for deeming the explanation unsatisfactory. The Court agreed that the case required reconsideration due to these unique circumstances. As a one-off measure, the writ petition was remanded to the respondent for proper assessment considering the support materials provided by the petitioner and providing detailed reasons for the conclusions reached.

The Court ordered the setting aside of the impugned order solely for the purpose of allowing the respondent to redo the assessment by considering the support affidavit and other materials submitted by the petitioner. It was clarified that the Court had not expressed any opinion on the case's merits. The respondent was directed to consider the supporting material, particularly that related to the petitioner's response dated 20.09.2021, and issue a fresh assessment order with detailed reasons. The reassessment should commence promptly and be completed within four weeks. The writ petition and the related miscellaneous petition were disposed of accordingly, with no costs imposed.