2017 (9) TMI 168 - HC - Income Tax

Demand of outstanding tax - department uploaded in its e-portal the status of outstanding demand against the petitioner for several assessment years - roof of no scrutiny assessment - Held that - No definite reference to any order of assessment, reassessment or revisional order for the assessment year 2006-07 under which the said demand can be stated to have arisen. In plain terms, the department is unable to produce any order giving rise to such demand. The department has not refuted the petitioner s contention that the return filed by the petitioner for the said assessment year 2006-07 was not taken in scrutiny and simply accepted under section 143(1) of the Act giving rise to refund as claimed by the petitioner. There is nothing on the record to suggest that any order of reassessment was thereafter passed by the department or that any revisional order was passed by the Commissioner raising such substantial tax demand. In absence of any evidence produced by the department, atleast as of now we shall have to accept the petitioner s contention that the return was accepted without scrutiny and that thereafter no order of reassessment or revisional order was passed by the competent authority raising such tax demand. The respondents are directed to delete the demand of ₹ 1,08,31,405/- for the assessment year 2006-07. - Decided in favour of assessee.

Summary

Issues:
Challenge to outstanding tax demand for assessment year 2006-07.

Analysis:
The petitioner, a partnership firm engaged in transportation, challenged the department's action showing an outstanding demand of ?1,08,31,405 for the assessment year 2006-07. The petitioner sought a direction to delete this demand from the department's e-filing portal. The petitioner had filed the return of income for the said assessment year claiming a refund of ?2,65,728, which was processed under section 143(1) of the Act resulting in a refund of ?2,78,100. Subsequently, the Assessing Officer issued a notice raising the demand amount, to which the petitioner responded by highlighting that no scrutiny assessment had been conducted for that year, and no demand had been raised. Despite the petitioner's objections and reminders, the department uploaded the outstanding demand on its e-portal, attributing it to an order passed under section 263 of the Act.

Upon hearing both parties and examining the documents, the court noted the absence of any order of assessment, reassessment, or revisional order for the assessment year 2006-07 that could justify the stated demand. The department failed to produce any evidence supporting the demand, and it was acknowledged that the return had been accepted without scrutiny under section 143(1), leading to the refund claimed by the petitioner. The court emphasized the lack of any reassessment or revisional order to substantiate the tax demand. Consequently, the court accepted the petitioner's contention that no valid order had been passed to justify the demand.

In light of the above findings, the court allowed the petition and directed the respondents to delete the demand of ?1,08,31,405 for the assessment year 2006-07. However, the court specified that if the respondents could provide evidence of a valid order giving rise to the demand, they were permitted to proceed in accordance with the law. The petition was disposed of accordingly, granting relief to the petitioner based on the lack of supporting documentation for the outstanding tax demand.