2021 (9) TMI 1566 - HC - Income Tax

Validity of assessment order passed - breach of principles of natural justice - Petitioner states that an assessment order has been passed even before the time granted for fling a reply expired and without considering the reply which was already fled - HELD THAT - As noted the reply has already been fled on 12th April, 2021 which has not been considered in the assessment order. The affiant has stated that the final assessment order was passed at 3 1. PM, whereas the assessment order indicates that it was digitally signed at 2 53 PM. Therefore, we are constrained to observe that the affidavit does not reflect the true facts and has been prepared in a very lackadaisical manner without confirming veracity of the statement being made on oath. After lot of deliberation, we have decided and we hereby call upon the affiant Syama Saji to show cause as to why perjury proceedings should not be initiated against the said Syama Saji for making incorrect statements on oath particularly without verifying the documents of the Department annexed to the Petition. The impugned assessment order has to be quashed and set aside, which we hereby do. The consequential notice of demand and notice of penalty also require to be set aside and the same are hereby set aside. The assessment order has been passed even before time to file reply had expired and without considering the records that reply has in fact been fled. This has resulted in petitioner having to rush praying to this Court to interfere in this wrongful action on the part of respondent. If the AO had checked his/her records, he/she would not have passed assessment order hastily without waiting for time granted to file reply expired and without checking whether any reply has been fled. In our view, it is a fit case to impose cost in the sum of ₹ 10,000/- and this amount shall be paid by the concerned respondent no.2 officer to PM Cares Fund and the compliance affidavit with the proof of payment shall be filed within two weeks from today.

Summary

Issues:
1. Impugning assessment order on grounds of breach of natural justice.
2. Allegation of assessment order being passed before reply deadline and without considering the reply.
3. Discrepancies between the time of reply submission and assessment order issuance.
4. Allegations of incorrect statements in the affidavit and call for perjury proceedings.
5. Quashing of the assessment order and consequential notices.
6. Imposition of costs on the concerned officer and direction for payment to PM Cares Fund.

Detailed Analysis:

1. The petitioner challenged an assessment order dated 12th April, 2021, alleging a breach of natural justice. The petitioner contended that the assessment order was passed before the deadline for filing a reply had expired and without considering the reply already submitted. The respondent, in an affidavit, claimed that no reply was received before the completion of assessment proceedings. Discrepancies arose regarding the timing of the reply submission and the issuance of the assessment order.

2. The notice received by the petitioner on 8th April, 2021, required a response by 12th April, 2021, by 23:59 hours. The petitioner submitted the reply on the same day at 8:20 a.m. However, the assessment order was digitally signed at 2:53 PM on 12th April, 2021, before the reply deadline. The court noted the discrepancy in the timing and lack of consideration for the submitted reply in the assessment order.

3. The court observed discrepancies in the respondent's affidavit, noting that the assessment order was passed hastily without waiting for the reply deadline to expire. The court decided to quash the assessment order and the consequential notices of demand and penalty. Additionally, the court directed the concerned officer to pay a fine of Rs. 10,000 to the PM Cares Fund within two weeks, citing the wrongful action on the part of the respondent.

4. The court criticized the respondent for passing the assessment order prematurely and without verifying the records of the reply submitted by the petitioner. The court deemed the situation fit for imposing a cost on the concerned officer and directed the payment to the PM Cares Fund. The judgment concluded by disposing of the petition.

This judgment highlights the importance of adhering to principles of natural justice in assessment proceedings and the repercussions of hasty decision-making by assessing officers.