High Court, which quashed the assessment order and directed a fresh assessment, ensuring due consideration of the petitioner’s deduction claim under Section 80IB(10).
In a recent ruling, the Bombay High Court emphasized the importance of avoiding over-analysis by the Income Tax Authority to prevent paralysis of justice. Justices KR Shriram and Neela Gokhale highlighted the necessity for the authority to grasp the essence of Supreme Court orders, particularly concerning the condonation of delays.
The case revolved around an assessee who failed to file their return of income (ROI) for the assessment year 2011-2012, leading to an appraisal order. The petitioner’s claim for deduction under Section 80IB of the Income Tax Act was denied due to the delayed filing.
Despite the dismissal of the petitioner’s appeal by the Commissioner of Income Tax (Appeals) and subsequent rejection of their application by the Central Board of Direct Taxes (CBDT), the High Court intervened on August 23, 2022, to condone the delay. The court emphasized that the Income Tax Authority should treat the claim as if there had been no delay in filing the return.
However, the Income Tax Appellate Tribunal (ITAT) failed to align with the spirit of the High Court’s order, leading to further legal battles. Eventually, the Tribunal’s decision was overturned by the High Court, which quashed the assessment order and directed a fresh assessment, ensuring due consideration of the petitioner’s deduction claim under Section 80IB(10).
In light of the court’s directive, the Assessing Officer (AO) has been instructed to issue a fresh assessment order by August 31, 2024. The AO must conduct a thorough review, addressing all relevant points raised by the petitioner and ensuring a fair hearing process.
This ruling underscores the importance of a balanced approach by tax authorities, avoiding excessive scrutiny that could impede the delivery of justice. By adhering to the principles of law and respecting court directives, the Income Tax Authority can ensure a smoother and more equitable resolution of tax disputes.
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