HC quashes assessment order passed by AO without application of mind; cost to be recover from him if such order continues

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  • Last Updated on 18 October, 2021

assessment order passed by AO without application of mind

Case Details: Mantra Industries Ltd. v. National Faceless Assessment Centre - [2021] 131 taxmann.com 165 (Bombay)

Judiciary and Counsel Details

    • K.R. Shriram and Amit B. Borkar, JJ.
    • Devendra H. Jain for the Petitioner. Akhileshwar Sharma for the Respondent.

Facts of the Case

The instant writ petition was filed by the assessee against the notice of demand issued under section 156. According to assessee, the assessment order was passed without following the principles of natural justice in as much as assessee’s request for an adjournment had not been considered, request for personal hearing had not been considered and most importantly the reply/objection filed in response to the show-cause notice with the draft assessment order had not been considered.

The Bombay High Court held that revenue had passed the assessment order without application of mind, without considering the two replies dated 23rd April 2021 and 27th April 2021 filed by assessee and without considering the request for personal hearing also sought by assessee.

Strangely in the affidavit, it was stated that “the noting records show that the submission dated 23rd April 2021 and 27th April 2021 both taken on record and considered”. But the assessment order did not reflect this.

It is a wonder how does the affiant know something which the assessment order does not reflect. Another point raised in the affidavit was that assessee had not furnished the quantitative details in item 35(b) in Form 3CD, and it has not given any justification for non-furnishing such details. This was also contrary to what was stated in the same affidavit that the noting records show that the submission dated 27th April 2021 had been taken on record and considered.

High Court Held

The Court compared the details provided by assessee and Form 35(b) annexed to the affidavit in rejoinder. No difference was found except that in the response dated 27th April 2021, the product manufactured, viz., Wet Grinders, is mentioned.
Thus, the Court is compelled to set aside the assessment order and also the consequential notices.
Further, this order to be circulated right from the Revenue Secretary to everybody in the Finance Ministry so that if such orders are continued to be passed, the Court will be constrained to impose substantial costs on the concerned Assessing Officer to be recovered from his/her salary and also direct the department to place such judicial orders in the career records of such Assessing Officer.

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One thought on “HC quashes assessment order passed by AO without application of mind; cost to be recover from him if such order continues”

  1. I have an order dated 30-09-2021 for A.Y. 2013-14 wherein proceedings u/s 263 passed without notice and hearing. Notices and assessment proceedings took only 10 days and a demand of more than rupees one crore raised. The only objection was TDS has not been deducted from certain expenditure. TDS Return with Ledger and all other evidence have been produced o prove that TDS has been deducted but the AO made addition on the ground that bills and vouchers along with confirmation from the parties not produced. The issue involved in the case is that TDS has not been deducted and now the AO wants that the assessee should prove expenses and payment thereof. I was thinking is there no body to question such careless action. Yes, there is judiciary and can get justice. But department should see such careless attitude.

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