CHOLOROCHEM INDUSTRIES vs. ASSISTANT COMMISSIONER OF INCOME TAX

Facts

The petitioner, Chlorochem Industries, is challenging directions to deposit 20% of a demand raised during the pendency of their appeal before the Commissioner of Income Tax (Appeals). A survey was conducted on the petitioner's premises on January 11, 2018, followed by a reiterated statement on January 25, 2018. This led to an assessment order dated June 30, 2021, creating a demand of Rs. 2,18,05,696/-. The appeal has been pending since 2021. The petitioner has already deposited Rs. 10 Lakh and undertakes to deposit another Rs. 10 Lakh within four weeks.

Held

The High Court, without commenting on the merits of the case, disposed of the writ petition. It directed that in the event the petitioner deposits Rs. 10 Lakh within four weeks from the date of the order, the Commissioner of Income Tax (Appeals) shall decide the appeal on merits within three months thereafter. The Court also directed that no coercive measures shall be taken against the petitioner during the pendency of the appeal before the CIT(A), subject to the deposit of Rs. 10 Lakh within the stipulated four weeks. The Court acknowledged the issue involved and the fact that the appeal has been pending since 2021. No specific finding was given on the validity of the assessment order or the interpretation of Section 133A.

Key Issues

1. Whether the assessment order, framed solely on a reiterated statement not made on oath, is without jurisdiction and violative of Section 133A of the Income Tax Act, 1961? (Question of law and fact) Assessee's contentions: The assessment was framed solely relying upon the statement which was reiterated. The assessment is without jurisdiction and is violative of Section 133A of the Income Tax Act, 1961, as the recorded statement is not a statement on oath. Revenue's contentions: The petitioner was given the benefit of an installment for depositing 20% of the demand.