Cryptic assessment orders passed by the assessing officers of the Income Tax department without touching upon the queries of the assessees have led to several cases in high courts and the Supreme Court challenging such orders, the Madras high court has said.

“It would be fatal to the assessee as well as a huge loss to the exchequer,” Justice Krishnan Ramaswamy said.

It would not be out of place to mention here that the real intention of Section 144 B of the Income Tax Act is to provide an opportunity of being heard to the assessees before passing any orders, which are prejudicial to their rights/ interests, the judge said.

“It is with such motive that law has been enacted to safeguard the interest of the assessee, but, it is very unpleasant to see that in umpteen number of petitions, the assessment orders were assailed on the very ground of violation of principles of natural justice, audi alteram partem,” the judge added.

If the real thoughts and intention of the assessing officer is to provide fair opportunity of hearing to the assessees to put forth their defence, the same should be extended in a real nature and it should not be a nominal one, the court said.

“This court would like to point out that under the guise of providing opportunity, the assessee should not be called to file a reply within a short span of time. If done so, the object behind which the provisions of the act was enacted will not be achieved and the same would lead to depriving the legal rights of the assessees,” the court said.

The court made the observations while allowing a plea moved by Gemini Film Circuit challenging an assessment order passed by the department without providing adequate opportunity and personal hearing for the firm.
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