Case Law Details
IY TEE CEE Trading Company Vs ACIT (Kerala High Court)
The issue under consideration is whether the petitioner firm had correctly accounted for the deposits made in its account during demonetization?
In the present case, the petitioner is a partnership firm was issued a PAN, which reflected its status as a company. The petitioner applied for and was issued a fresh PAN showing its status as a firm. during the demonetization period, the petitioner firm had made certain deposits in its bank account, owing to the incorrect PAN that was available in the bank account. Hence, this was reported by the bank to the Income Tax Department. Accordingy, ITD initiated the assessment proceedings u/s 142(1) against the petitioner, by asking it to file returns in response to the said notice. Further, the petitioner in attempting to file an appeal against this assessment order, but the online portal refuses to accept an appeal which is filed in the PAN of the petitioner which shows its status as a firm, whereas the PAN recorded in the system of the Department, based on the orders of the assessing authority, shows the petitioner as a company.
HC states that, the AO’s order states that the claims made by the petitioner could not be accepted in view of the same not being substantiated with proper evidence and due to paucity of time. While it may be a fact that the assessing authority was limited by time constraints, in view of the statutory provisions mandating the completion of assessments within a particular time, the same cannot be cited as a reason for abdicating his role as an adjudicating authority in tax assessment. In other words, the assessee cannot be prejudiced on account of the delay occasioned by the department in passing assessment orders, and the hasty manner in which an assessment order is passed without considering the material produced by an assessee, cannot be justified on the ground that the time limit for finalising assessment was nearing expiry. Inasmuch as HC do not find a proper consideration of the materials produced by the petitioner assessee, HC quash order and direct the respondent to redo the assessment in relation to the petitioner by considering the materials produced by the petitioner to justify his contentions on merit, and referring to the said material while passing final orders of assessment for the assessment year in question.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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