TMI Blog2022 (6) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... cation dated 11.07.2016 bearing reference F.No.225/162/2016/ITA.II. Though the petitioner has not specifically requested for a personal hearing, the fact remains that where the books of accounts have to be examined for arriving at a proper conclusion, a personal hearing is mandatory. We are inclined to quash the impugned orders and the case is remit back to the respondent to pass an appropriate order preferably within a period of three months from the date of receipt of copy of this order. The impugned order which stands quashed shall now be treated as a show cause notice for the purpose of completing the assessment. WP allowed. - W.P(MD).No.6728 of 2021 And W.M.P(MD).Nos.5181 and 5184 of 2021 - - - Dated:- 7-4-2022 - Honourable Mr.Justice C.Saravanan For the Petitioner : Mr.R.Sivaraman For the Respondent : Mr.N.Dilipkumar Senior Standing Counsel ORDER The petitioner has challenged the impugned assessment order, dated 18.02.2021 for the assessment year 2018-2019. 2.The specific case of the petitioner is that a survey was conducted on 06.03.2018 in the premises of the petitioner and hard disk of the computer containing Tally software details, was tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erated by another instruction, dated 11.07.2016 in CBDT Circular in F.No. 225/162/2016/ITA.II. A specific reference was made to another instruction dated 20.08.2018, bearing Instruction No.03/2018 [No.225/249/2018-ITA.II]. 7.It is therefore submitted that the impugned order has to go. 8.The learned counsel for the petitioner has also drawn the attention of this Court to the instruction of the Central Board of Direct Tax addressed to the Principal Chief Commissioner of Income Tax, Chennai, in the case of eShakti.com Private Limited Vs The Assistant Commissioner of Income Tax in W.P.Nos.1260 and 1264 of 2020, wherein in Paragraph 4 in response to Paragraph 14 of the affidavit filed in support of W.P.Nos.1260 and 1264 of 2020, it was categorically stated as follows:- ''(iv) However, by following the principles of natural justice, it is expected that an opportunity of being heard is given to the assessee before making any addition/disallowances which are prejudicial to the interests of the assessee. To give effect to the legislative intent as enshrined in Section 143(2) and 143(3) of the Act, CBDT in its guidelines for conduct of assessment proceedings provides for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this preliminary ground. That apart, it is submitted that there is no violation of principles of natural justice inasmuch as the petitioner was issued with a notice under Section 143 (2) of the Income Tax Act, 1961 on 26.09.2019. However, the petitioner has failed to reply the same. Thereafter, the show cause notice issued to the petitioner on 06.02.2021, wherein, the basis on which the proposed assessment was to be completed was articulated. 14. The learned Senior Standing Counsel for the respondent submits that the show cause notice, dated 06.02.2021 specifically refers to the statement of the Managing partner of the petitioner and the documents and evidences recovered during the course of survey held under Section 133 A of the Income Tax Act on 06.03.2018 and 07.03.2018. It is submitted that the petitioner has also replied to the allegations in the said notice and it is only thereafter the impugned assessment order has been passed on 18.02.2021. It is therefore submitted that there is no irregularity committed by the Assessing Officer, while passing the assessment order, dated 18.02.2021. 15. The learned Senior Standing Counsel for the respondent further submits that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Act, 1961. 19. I have considered the arguments advanced by the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondent. I have also perused the decisions of the learned Single Judge of this Court in eShakti.com Private Limited Vs The Assistant Commissioner of Income Tax . I have also pursued the documents filed in support of the present writ petition and circulars issued by the CBTD and instructions of the CBTD in connection with the eShakti.com Private Limited Vs The Assistant Commissioner of Income Tax. 20. The facts are not in dispute. A survey under Section 133 A of the Income Tax Act took place on 06.03.2018 and 07.03.2018. At that time there was a verification and information were retrieved from the petitioner s books of accounts. The Managing partner also appears to have given certain statements to the effect that the net profit of the petitioner s company was around Rs.5,65,98,598/- and few other entries were to made that the net profit would be around Rs.4,00,00,000/-for the Assessment Year 2018-2019. However, the petitioner filed the returns of income under Section 139 of the Income Tax Act, the petitioner declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituations: i. Where books of account have to be examined; ii. Where Assessing Officer invokes provisions of Section 131 of the Act; iii. Where examination of witness is required to be made by the concerned assessee or the Department; iv Where show-cause notice contemplating any adverse view is issued by the Assessing Officer and assessee requests through their 'E-filing' account for personal hearing to explain the matter. 23. The facts on record seems to indicate that the department has proceeded to conclude that the income in book of account as the net profit as on date of survey. Thereafter, few more weeks were there before the period came to an end. The facts on record also indicates that the value of the stock that was determined on the date of survey was Rs.13,95,97,064/- on the MRP and the book value of the stock maintained by the petitioner as on date was Rs.9,99,08,215/-. The value of the physical stock was arrived by deducting the G.P. ratio at 21.53% and thus the excess stock of RS.96,63,062/- was arrived as detailed below: (iii) A comparison of the actual physical stock available at your premises with the stock as per books revealed e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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