Allahabad HC Quashes Reassessment Proceedings for Not Sharing Evidence Used to Reopen Case

The Allahabad High Court has set aside an income tax reassessment order after finding that the tax department failed to comply with its earlier directions and did not provide the taxpayer with the material forming the basis for reopening the assessment.

The petitioners, Arjun Sahu, Syed Quamer Abbas Zaidy, Shashi Kiran, and Nikhil Nirwal, filed a writ before the Allahabad High Court claiming that the Income Tax Department had not properly followed the earlier directions issued by the High Court regarding the reassessment proceedings.

They argued that the tax authorities started reassessment without sharing the information based on which their cases were reopened. They said that their replies and objections were rejected without proper consideration. Further, authorities allegedly stated that the material would be shown during the assessment stage, which, according to the petitioners, suggests that the AO had prejudged the issue.

On the other hand, the revenue requested the court to allow them to correct their error by ensuring full compliance with the high court’s earlier order.

Considering this, the High Court set aside the order and directed the tax authorities to share the material forming the basis of the reassessment with the petitioners within one week.

After receiving the documents, the taxpayers will have two weeks to submit fresh objections, and the authorities must pass a clear and reasoned order within another two weeks.