Expressing displeasure over the functioning of income tax (IT), the Bombay High Court has warned that it may start imposing costs on income tax assessing officers, if they are found going after taxpayers with delayed assessment orders that leave little time for the taxpayers to respond.
While condemning such delays, a division bench of Justices KR Shriram and Kamal Khata emphasised that the Central Board of Direct Taxes (CBDT) needs to sensitise its officers to ensure that taxpayers are treated fairly.
Unfortunate stand of union of India, needs to be condemned: HC
“It is the most unfortunate stand being taken by the Union of India through its officers which requires to be condemned, which we hereby do. We hope the CBDT would sensitise its officers so that they do not treat assessees in this manner. We think it is high time we start imposing substantial costs to be recovered from the salary of such Assessing Officers,” the bench noted.
The HC was hearing a plea by Ajay Securities Pvt Ltd seeking quashing of an IT draft assessment order. The HC quashed the order which was served after a six month delay and which eventually left the assessee (company) only three days to respond.
The company alleged it had responded to a notice from the income tax authorities under Section 142(1) of the Income Tax Act on March 9 and March 16, 2021. However, the assessing officer failed to act on this response for six months until September 3, 2021.
After receiving a notice dated September 3, the company submitted documentary evidence and inquired whether further details were required.
Company was given only 3 days to respond
Despite these efforts, a draft assessment order was issued only on September 23, 2021, giving the company only three working days to respond. Its requests for a short adjournment and a personal hearing through video conferencing were also denied.
The court frowned at the assessing officer for such a delay in taking action and for giving the company only a minimal amount of time to respond to the draft assessment order. It said that the assessing officers must work with more diligence and alacrity.
Quashing the assessment order, the bench sent the matter back to the Jurisdictional Assessing Officer with directions to pass a fresh assessment after hearing the assessee.