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High court directed assessment officers to redo the assessment


The high court gave an important ruling dated 9th September, 2019 regarding assessment orders passed by assessment officers in case of Delphi TVS Technologies Ltd. V. Assistant Commissioner (ST) [2019] 110 taxmann.com 293 (MADRAS) which is discussed as below:

Facts of the case
  • Notices of dated 21.02.2019 were issued to the taxpayer. On receipt of such notices, taxpayer through letters dated 15.03.2019, requested the tax officer to give them time upto 15th April 2019 for submission of reply, which was acknowledged at the office of the assessing officer on 20.03.2019.
  • Perusal of the assessment, orders would also show that the said letter was received by the tax officer.
  • Tax Officer, without giving time for the taxpayer, has proceeded to pass assessment orders on 29.03.2019 by stating that the taxpayer failed to file their objection.
  • Taxpayer filed a writ petition challenging the impugned assessment orders on the ground that it was not given time to file objections in response to the notices of proposals. 
Observation / Judgment
  • The record shows that the assessee has sought for time to file objections. Such communication was also received by the Tax Officer. If that be the case, the Tax Officer is not justified in proceeding to pass the assessment orders without informing the assessee as to whether its request for time to submit its reply has been accepted or rejected. In both events, the Tax Officer is bound to send a communication to the assessee and inform the result of the request made by the assessee. Therefore, in the absence of any such communication from the Tax Officer, there is a possibility of drawing a reasonable presumption by the taxpayer exists as if its request has been accepted.
  • Therefore, the act of the Tax Officer in not passing any order on the request of the assessee seeking for time and proceeding to pass the orders of assessment straightway amounts to a violation of principles of natural justice.
  • HC held the matter is remitted back to the Tax Officer for a fresh assessment.
Please click here for ruling.

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