Mumbai: HC imposes cost on income tax assessing officer for passing order without giving a hearing to Goregaon Sports Club

The Bombay High Court has imposed a cost of Rs 5,000 on the assessing officer for failing to consider a reply by Goregaon Sports Club (GSC) in a notice by the Income Tax (IT) for the assessment year 2018-19.

While setting aside the assessment order and subsequent demand notice of Rs 1.37 crore, the HC observed: “It is one of those blatant cases of breach of principles of natural justice and total non-application of mind.”

A division bench headed by K R Sriram was hearing a petition filed by GSC challenging the assessment order and subsequent demand notice of Rs 1.37 crore by the Income Tax Department in April 2021.

According to GSC’s counsels – Samiksha Kanani, Vikhil Dhoka and Arijeet Bose – contended that the assessment order of April 26, 2021, was passed without even considering GSC’s written submissions which was submitted on April 23, 2021, and without granting a personal hearing.

The assessing officer, in its order, has referred to the show cause notice issued on April 12, 2021, and GSC’s initial reply seeking an adjournment. However, the officer “conveniently chooses to ignore” the GSC’s reply of April 23, 2021 showing cause as to why the modification in returned income should not be made, the court added.

The HC order observes: “The Assessing Officer says ‘As the assessee has not submitted any reply till the date of passing the order ………… ‘. This noting of the Assessing Officer is far from truth.”

In the circumstances, the court noted that there was no reason as to why it should wait for the Income Tax and its officer “to file any reply and prolong the agony of petitioner and also waste precious judicial time.”

“Ignoring the reply and forcing the petitioner to approach this Court is again adding to the docket of the already overburdened Court. Hence, it is a fit case, in our view, to impose a cost on the concerned officer, who shall pay a sum of Rs.5,000/- as donation from his/her personal account to PM Cares Fund,” the court said.

The HC had also directed that a different Assessing Officer shall consider GSC’s reply and pass the assessment order within six weeks.