2022 (2) TMI 647 - HC - Income Tax

Validity of draft assessment order u/s 144-C - Unexplained Sundry Creditors - rejecting the explanation regarding identity of the creditors - petitioner submit that material was made available to the Assessing Authority but due to technical glitch in the portal which is an admitted fact there were some difficulty relating to uploading the documents and that even though the documents were uploaded, due to technical glitch, the same were not available for the Assessing Officer to take note of the same - HELD THAT - It would be appropriate to set aside the draft assessment order at Annexure-G and also the assessment order at Annexure-J and the assessee may be afforded an opportunity to place before the Authorities necessary details and material and upon such production of material, the Assessing Officer could proceed with the matter. The draft assessment order at Annexure-G and the Assessment order at Annexure-J are set aside. The matter is remitted for completion of the assessment proceedings afresh after affording necessary opportunity to the petitioner as per law.

Summary

Issues: Challenge to validity of draft assessment order and assessment order for the assessment year 2018-19.

In this case, the petitioner challenged the validity of the draft assessment order and assessment order for the assessment year 2018-19. The draft assessment order under Section 144-C of the Income Tax Act raised concerns regarding the unexplained sundry creditors. The Assessing Officer noted that the assessee did not provide the list of sundry creditors promptly, leaving insufficient time for verification. The Authority proceeded to reject the explanation regarding the identity of the creditors based on this. The petitioner argued that the material was available but due to a technical glitch in the portal, the documents were not accessible to the Assessing Officer. The petitioner requested another opportunity to explain the sundry creditors due to this technical issue.

The learned counsel for the revenue acknowledged the technical glitch mentioned by the petitioner. Considering the technical difficulties faced by the petitioner in uploading documents, the Court decided to set aside both the draft assessment order and the assessment order. The Court directed that the petitioner should be given another chance to provide necessary details and material to the Authorities. Once the material is submitted, the Assessing Officer can proceed with the assessment proceedings. As a result, the draft assessment order and the assessment order were both set aside, and the matter was remitted for completion of the assessment proceedings afresh, ensuring the petitioner is given a fair opportunity as per the law.

In conclusion, the petition challenging the validity of the draft assessment order and assessment order for the assessment year 2018-19 was disposed of accordingly. The Court's decision focused on addressing the technical glitch that hindered the submission of necessary documents, emphasizing the importance of affording the petitioner a fair opportunity to present their case in the assessment proceedings.