A division bench of the Delhi High Court consists of Mr. Justice Manmohan and Mr. Justice Dinesh Kumar Sharma has quashed an assessment order for not complying with the provisions of section 144B of the Income Tax Act, 1961.
The Petitioner, Atma Ram Saria sold the shares of Croitre Industries Limited/ Mahavir India Limited through online transaction at the Bombay Stock Exchange through the SEBI registered Stock Broker and had received the sale price in cheques on which Securities Transaction Tax at applicable rates had been paid.
The petitioner contended that the Assessing Officer has violated Section 144B of the Act as it has passed the assessment order dated 30 April, 2021 without issuing a prior show cause-cum-draft assessment order. The petitioner stated that the Assessing Officer had hastily passed the assessment order on 30th March, 2022 without deciding the objections to the re-opening filed by the Petitioner on 28th March, 2022 which was within the time allowed by the Respondent, as the copy of the reason for reopening of assessment was provided by the Respondent only on 26th March.
Mr. Justice Manmohan and Mr. Justice Dinesh Kumar Sharma observed that the petitioner-assessee had filed his return of income for the Assessment Year 2013-14 on 27th April, 2021.
“However, the reasons for reassessment were supplied to the petitioner-assessee for the first time as late as 26th March, 2022. Thereafter even when the petitioner-assessee had filed his objections, the same were disposed of prior to passing of the impugned assessment order.Keeping in view the aforesaid, it is apparent that the impugned assessment order has been passed contrary to the procedure stipulated by the Supreme Court in GKN Driveshafts (India) Ltd. (supra). Thereafter even when the petitioner-assessee had filed his objections, the same were disposed of prior to passing of the impugned assessment order,” the Court said.
Quashing the assessment order, the Court held that “Accordingly, the impugned assessment order, demand notice and penalty notice all dated 30th March, 2022, are set aside and the Assessing Officer is directed to decide the objections dated 28th March, 2022 filed by the petitioner-assessee in accordance with law within ninety days. If the Assessing Officer wishes to issue any notice or seek any further information he shall be at liberty to do so. This court clarifies that rights and contentions of all the parties are left open.”
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