Case Law Details
Yum! Restaurants Asia Pte. Ltd. Vs. Dy. DIT (Delhi High Court)
In the present case, having started off on a wrong note that the original assessment was scrutinized and an order was passed under section 143(3) of the Act, the assessing officer proceeded to put up the note to the DIT as is evident from the title of the note but, through the Additional DIT. Both the Additional DIT and the DIT appear to have concurred with the reasons for reopening the assessment but without applying their minds to the fact that the return originally filed was only processed under section 143(1) of the Act and not under section 143(3) of the Act. Had the Additional DIT realized this mistake, he would not have put up the file further for the approval of the DIT. Clearly, therefore, at the level of Additional DIT there was non-application of mind. Had the DIT realized the mistake, he would have declined to make a noting and would have returned the file to the Additional DIT drawing his attention to section 151 (2) of the Act which did not require any further approval by the DIT where the return originally filed is only processed under section 143(1) of the Act. On the contrary, the DIT again recorded his concurrence with the views of the assessing officer and the Additional DIT. Therefore, at the second level also plainly there was non-application of mind.
What is evident to the Court is the non-application of mind by three officers of the Department–the assessing officer, Additional DIT and the DIT. Plainly they did not bother to examine the record themselves.
It is not understood how from the records available for assessment year 2006-07 it was not clear whether a scrutiny assessment was made. The records obviously would have contained the order of the assessing officer under section 143(3) of the Act. If, as is the case, there was no such order then clearly the only conclusion to be drawn was that the return was processed under section 143(1) of the Act. Since it is not the case of the Department that the file for assessment year 2006-07 went missing, as was the case for assessment year 2005-06, the above statement in the counter affidavit filed on 9-9-2014, more than a year after the reopening, is inexplicable.
At the highest, the note prepared by the assessing officer should have been candid in Column 8 that it was not clear whether the assessment was being made for the first time or not. That, at least, would have told the Court that the assessing officer had applied his mind to the facts of the case. In any event, if such a note had been put up to the Addl. DIT and thereafter to the DIT, either of those officers could have applied their minds and ascertained if indeed the return was processed under section 143(1) of the Act or picked up for scrutiny. The explanation now offered in the counter affidavit only underscores the non-application of mind at all three levels in the Department.
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