Bekaert Mukand Wire Industries Pvt. Ltd. Vs Additional/Joint/Deputy/ACIT/ITO (Bombay High Court)
Summary: Bombay High Court quashed the assessment order dated 19 April, 2021 after finding admitted non-compliance with the mandatory procedure prescribed under Section 144B of the Income Tax Act, 1961. The petitioner was admittedly an “eligible assessee” within the meaning assigned through Section 144B Explanation (m) read with Section 144C(15)(b). The Court accepted the petitioner’s contention that, in the case of an eligible assessee, the mandatory provisions contained in clauses (xxvii) to (xxxii) of Section 144B(1) had to be strictly complied with. It also relied upon SHL (India) Private Limited vs. Deputy Commissioner of Income Tax and others for the proposition that the requirements of Section 144C are mandatory.
The Revenue’s affidavit did not deny non-compliance and instead sought remand to the Assessing Officer for fresh adjudication. The High Court referred to Section 144B(9), which at the relevant time expressly provided that an assessment would be non-est if it was not made in accordance with the procedure laid down under Section 144B. Since non-compliance was admitted, the Court held that the assessment order dated 19 April, 2021 was non-est and quashed it. The consequential demand notice and penalty notice of the same date were also quashed and set aside. The Department was left free to take such steps as advised in accordance with law. The Court expressly clarified that it had made no observation on the merits of the case.
