2021 (10) TMI 978 - HC - Income Tax

Reopening of assessment u/s 147 - Unexplained purchase of immovable property - HELD THAT - Going through the above submission shows that it is nothing but a reiteration of earlier argument and nothing afresh has been submitted by the assessee. In her submission, assessee stated only was paid by her and payment was made by her son Gaurav Parkar - statement of the assessee is not supported by any documentary evidence such as bank account statement correlating the payments made to the builder etc. Therefore the sources of investment made for purchase of aforementioned immovable property apart from the loan amount remains unsubstantiated. There is absolutely no whisper about petitioner s request to grant time to get statement from ICICI Bank, Nariman Point Branch for the account of the son that has been close - we have no hesitation in setting aside the impugned order dated 20th September, 2021. Though respondent have been served a copy of the petition on 12th October, 2021 no reply has been filed. We requested Mr. Suresh Kumar who was present in the court to assist the court. Mr. Suresh Kumar stated that Mr. Sham Walve was briefed in the matter, but Mr. Sham Walve is unwell. At the same time, Mr. Suresh Kumar in fairness stated that as the documents annexed to the petition speak for themselves, the court may set aside the impugned order and remand the matter for denovo consideration without making any observations on merits of the case. Since we are also satisfied with the submissions made by Mr. Hakani, the order requires to be set aside and no purpose will be served in adjourning the matter. The order dated 20th September, 2021 is hereby quashed and set aside. The matter is remanded for denovo consideration but shall not be placed before the same Assessing Officer who passed the impugned order. But we also clarify that we have not made any observations on the merits of the case.

Summary

Issues:
Challenge to assessment order based on natural justice and due process violation.

Analysis:
The petitioner, an individual, challenged an assessment order dated 20th September, 2021, contending that it violated principles of natural justice and due process. The petitioner, a senior citizen, had jointly purchased a flat with her son, with the son contributing a significant portion of the payment. The case was selected for scrutiny under Section 147 of the Income Tax Act, 1961, as the petitioner allegedly did not file her original return of income for the assessment year 2013-14. The petitioner received a show cause notice on 15th September, 2021, directing her to provide documents and explain the sources of property purchase. Despite providing a partial response due to difficulties in obtaining certain bank statements, the respondent passed the assessment order on 20th September, 2021, disregarding the petitioner's explanations.

The assessment order stated that the petitioner's reply was not tenable, as it lacked documentary evidence supporting the payment details for the property purchase. The respondent found the petitioner's submission to be a reiteration of earlier arguments without any new evidence. Notably, the respondent did not address the petitioner's request for additional time to obtain bank statements, which was crucial for substantiating the source of funds for the property investment. Consequently, the High Court set aside the impugned order dated 20th September, 2021, due to the lack of consideration for the petitioner's circumstances and the failure to address the request for additional time to provide necessary documentation.

Although the respondent was served with a copy of the petition, no reply was filed. During the court proceedings, Mr. Suresh Kumar, representing the respondent, acknowledged the validity of the documents annexed to the petition and suggested remanding the matter for denovo consideration without making any observations on the case's merits. The court agreed with this approach and quashed the impugned order, remanding the matter for fresh consideration within six weeks, emphasizing the importance of providing a personal hearing in accordance with the law. The court clarified that the assessment should not be conducted by the same Assessing Officer who passed the initial order, maintaining neutrality in the reassessment process. Ultimately, the petition was disposed of in light of the court's decision to set aside the assessment order and order a fresh assessment within the specified timeframe.