Madras High Court’s Judgement on Section 143(3) of the Income Tax Act: Salem Sree Ramavilas Chit Company vs DCIT

COURT: Madras High Court

CORAM: C Saravanan J

SECTION(S): 143(3)

GENRE: Domestic Tax

CATCH WORDS: Assessment, E-Assessment

COUNSEL: G. Baskar

DATE: February 4, 2020 (Date of pronouncement)

DATE: February 19, 2020 (Date of publication)

AY: 2017-18


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Section 143(3): While E-Assessment without human interaction is laudable, such proceedings can lead to erroneous assessment if officers are not able to understand the transactions and accounts of an assessee without a personal hearing. Assessment proceeding under the changed scenario would require proper determination of facts by proper exchange and flow of correspondence between the assessee and the AO. The AO should at least call for an explanation in writing before proceeding to conclude that the amount collected by the assessee was unusual. Also, since the assessment proceedings no longer involve human interaction and is based on records alone, the assessment proceeding should have commenced much earlier so that before passing assessment order, the AO could have come to a definite conclusion on facts after fully understanding the nature of business of the assessee.

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