Documents Enclosed with Email not taken into Consideration: Madras HC sets aside Income Tax Assessment Order [Read Order]

The court found that the bank statements attached to the petitioner’s email were not considered in the assessment order

In a recent ruling, the Madras High Court set aside an income tax assessment order on the grounds that the documents enclosed with an email by the petitioner were not taken into consideration. The petitioner, Muthu Pitchamuthu Prabu, challenged the assessment order for the year 2022-23, which was issued after the petitioner filed the return of income on 30.07.2022. A notice was issued to the petitioner under Section 143(2) of the Income Tax Act, 1961, and subsequent notices under Section 142(1) of the I-T Act were also replied to by the petitioner, including the submission of bank statements. Consequently, a show cause notice was issued, calling upon the petitioner to show cause in respect of investments made by the petitioner in Zerodha from his ICICI Bank account. This email included several documents, such as complete bank statements and Form-16. However, the impugned assessment order failed to reference this email or the attached documents. The petitioner, represented by Suhrith Parthasarathy and Arun Karthik Mohan, argued that the documents enclosed with the email were not considered. Additionally, they contended that the petitioner’s assessment was transferred in violation of Section 127 of the Income Tax Act, as the transfer order was not duly authorised and the petitioner had not consented to it. D. Prabhu Mukunth Arun Kumar, representing the respondents, contended that the petitioner had filed income tax returns specifying his address in Chennai, Tamil Nadu, justifying the transfer to the jurisdictional officer. He also noted that the petitioner did not object to the transfer at the time or in any subsequent communication. The court found that the petitioner’s email dated 28.03.2024, which included documents such as ICICI Bank and Citibank statements, was not considered in the assessment order. The court further observed that the non-consideration of these documents resulted in significant prejudice against the petitioner, as a sum of Rs. 66,33,000/- was added to his total taxable income. The bench of Justice Senthilkumar Ramamoorthy set aside the impugned order, and the matter was remanded for reconsideration. The court directed the respondents to enable the portal and provide access to the petitioner within two weeks. The petitioner was permitted to file a reply with all necessary documents within a further two-week period. The respondents were instructed to provide a reasonable opportunity for a personal hearing and to issue a fresh order within three months from the receipt of the additional documents.

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