MUKTA RATHORE, RAIPUR,RAIPUR vs. ACIT, -1(1), RAIPUR, RAIPUR

The Ld. Counsel for the assessee submitted that during course of search at Wallfort Group, incriminating material was found and in the entire list of said incriminating material which was seized during the course of search, the name of the assessee or any transaction pertains to the assessee for purchase of flat from the said group does not emanate at all. That without such evidence or without any reference of the assessee regarding any investment made in the Wallfort Group, there cannot be any addition made u/s.69 of the Income Tax Act, 1961 (for short ‘the Act’). At this juncture, the Department was directed to furnish report from the A.O which had been submitted by the Sr. DR dated 15.07.2026 and the same is extracted as follows:

In the aforesaid report, it is mentioned by the Department that in Sr. No.25 of Excel Sheet i.e. “774B8B5”, the name of the assessee is mentioned. It is further submitted by the Department that therefore transaction pertained to the assessee is already mentioned in the seized incriminating material.

The Ld. Counsel for the assessee submitted that this information was never shared with the assessee at any point of time of assessment. He further submitted that during the course of entire proceedings before the sub-ordinate authorities, no such information was provided to the assessee for response and they were made to defend their case without this relevant information which was in the possession of the Department. In such scenario, reassessment framed is arbitrary, bad in law and liable to be quashed.

I find that the aforesaid contention of the assessee is squarely covered by the decision of the Hon’ble Chhattisgarh High Court in the case of ACIT, Circle-1, Raipur (C.G.) Vs. Sun and Sun Inframetric Pvt. Ltd., TAXC No. 5 of 2022 and TAXC No.7 of 2022, dated 03.08.2022, had upheld the findings of the Tribunal observing that information and statement which were used against the assessee without enabling the assessee to put forth his defence, such procedure defeats the rules of natural justice of doctrine of audi alteram partem.

In view of the aforesaid facts and circumstances, we are of the opinion that shorn of all other technical aspects which may have been raised before us, the very fact that the material referred to in the "reasons to believe" was not supplied to the petitioner, the entire proceedings for the reopening of the assessment and leading to the consequential assessment stand vitiated in law.” 8. Further, the Hon’ble Bombay High Court in the case of Tata Capital Financial Services Limited Vs. Assistant Commissioner of Income Tax Circle & Ors., while deciding Writ Petition No.546/2022 vide judgment and order dated 15.02.2022, had directed the Revenue to adhere to certain guidelines in reopening the assessment proceedings. It emphasized that the Assessing Officer shall not merely state the reasons to believe in the letter addressed to the assessee, but if the reasons make reference to any other document or a letter or a report, such document or letter or report should be enclosed to the reasons. Therefore, in view of the aforesaid decision also, it is mandatory on the part of the Assessing Officer to supply the assessee with all relevant documents, referred to in the reasons for reopening so that the assessee may file proper objections opposing such reopening of the assessment. 9. The Hon’ble Chhattisgarh High Court in the case of ACIT, Circle-1, Raipur (C.G.) Vs. Sun and Sun Inframetric Pvt. Ltd., TAXC No. 5 of 2022 and TAXC No.7 of 2022, dated 03.08.2022, had upheld the findings of the Tribunal observing that information and statement which were used against the assessee without enabling the assessee to put forth his defence, such procedure defeats the rules of natural justice of doctrine of audi alteram partem. The Hon’ble Supreme Court in the case of CIT Vs. 10. Amitabh Bachhan (2016) 384 ITR 200 (SC) while upholding the mandatory requirement for adhering to the principles of natural justice, in any proceedings by a quasi- judicial authority also referred to the decision in the case of the C.I.T., West Bengal, II, Calcutta Vs. M/s. Electro House, (1972) 82 ITR 824 (SC), wherein it was held and observed that a breach of principles of natural justice effects the legality of the order. Any contravention of the principles of natural justice vitiates the order passed by the authority. Accordingly, the Hon’ble Apex Court has ruled that it is mandatory to provide an opportunity to the assessee to be

Respectfully following the aforesaid judicial pronouncements, on this legal premises on the same parity of reasoning, even without going into the merits of the matter, the appeal of the assessee is allowed.

In the result, appeal of the assessee is allowed.