2024 (12) TMI 823 - HC - Income Tax

Validity of assessment order - findings given in the assessment order, submits are self-contradictory as on the one hand, the authority held that no reply has been furnished by the petitioner and on the next breath, considered the reply dated 14.03.2024 in a cryptic manner - HELD THAT - The proper officer opined that no reply has been furnished and on the other hand, considered the reply. The consideration is also cryptic. We find substance in the argument of the learned counsel for the petitioner that the reply and the documents filed therewith were not considered in proper perspective. There is no application of mind on the bank s confirmation letter and bank statement of Yashoda Nookaratnam. Thus, reasons have not been given for not accepting the defence of the petitioner. The reasons are held to be heartbeat of conclusions. In M/s. Kranthi Associates (P) Ltd. v. Masood Ahmed Khan 2010 (9) TMI 886 - SUPREME COURT has emphasized the need of assigning reasons in administrative, quasi-judicial and judicial orders. We are not inclined to relegate the petitioner to avail alternative remedy. The assessment order is set aside. The competent authority shall re-hear the petitioner and decide the matter afresh in accordance with law. It is made clear that this Court has not expressed any opinion on merits.

Summary

Issues:
Challenge to assessment order based on contradictory findings and failure to consider relevant documents.

Analysis:
The petition under Article 226 challenges the assessment order dated 19.03.2024, alleging that the findings therein are self-contradictory. The petitioner's reply to the show cause notice, along with supporting documents, was filed within the stipulated time and loaded on the Department's portal. The petitioner's defense, including documents related to certain transactions, was not adequately considered in the assessment order. The petitioner argued that the authority failed to justify disregarding the defense presented. The respondent, represented by the Senior Standing Counsel for Income Tax, contended that the reply was considered, and the petitioner had the option to appeal. The Court emphasized the importance of reasons in administrative and judicial orders, citing precedent to support the necessity of providing cogent and clear justifications for decisions.

The assessment order indicated that the petitioner failed to comply with the show cause notice by the specified date, but later filed a reply on 14.03.2024. The order suggested that the petitioner did not provide sufficient evidence regarding the transactions under scrutiny. However, the Court found that the assessment lacked proper consideration of the documents submitted by the petitioner. The Court highlighted the significance of reasons in decision-making processes, emphasizing that reasons are essential for transparency, accountability, and ensuring justice. The Court referenced previous judgments to underline the importance of recording reasons in administrative and quasi-judicial decisions.

Due to the glaring illegality in the assessment order, the Court set it aside and directed the competent authority to rehear the petitioner's case and make a fresh decision in accordance with the law. The Court clarified that it did not express any opinion on the merits of the case. The writ petition was disposed of with the aforementioned direction, without any order as to costs. Any pending miscellaneous applications related to the petition were also directed to be closed.