Optical Health Solutions Private Limited Vs Union of India (Telangana High Court)
Telangana High Court held that initiation of proceedings under section 143(3) of the Income Tax Act after 01.04.2021 without following provisions of section 144B i.e. assessment being carried out in faceless manner is not justifiable. Accordingly, orders are quashed and appeals are allowed.
Facts- During the assessment proceedings, the Assessing Officer raised queries regarding ‘other long term liabilities’ amounting to Rs.246 crores shown in the balance sheet as on 31.03.2020. The petitioner clarified on multiple occasions through detailed replies dated 15.03.2022, 22.08.2022 and 20.09.2022 stating that these liabilities pertains to advances received from customers for purchase of land parcels ranging from 1 to 4 acres each, and explicitly stated that these were not advances for flat or villa bookings as was being incorrectly presumed by AO. The petitioner provided details like permanent account numbers (PAN), complete address, direct contact telephone numbers, written confirmation letters from the advance-paying parties, details of the nature of property transactions, extent of land agreed to be purchased, dates of receipt of advances, and complete ledger accounts for 11 identified parties involving aggregate advances of Rs.134 crores, specifically and expressly requesting AO to contact the parties directly on the telephone numbers provided if further verification or clarification was needed, demonstrating full transparency and willingness to cooperate. However, petitioner contested that AO has mechanically and arbitrarily rejected the explanation without any valid basis, rational reasoning, or proper application of mind.
