The Madras High Court on Wednesday set aside four assessment orders passed by the Income Tax Department on September 30, 2021, rejecting the declared income of ₹384.55 crore by SRS Mining, owned by J. Sekar Reddy and two other partners, for the assessment years 2014-15 to 2017-18 and instead assessing its income to be a whopping ₹4,442.13 crore for which it was liable to pay tax to the tune of ₹2,682.16 crore.
Chief Justice Munishwar Nath Bhandari and Justice N. Mala disposed of the writ petitions filed by the private firm, involved in lending excavators for mining, with a direction to the I-T Department to reconsider the issue and pass the assessment orders afresh after taking into account the findings recorded by them in their judgment. They also said the petitioner firm could make all its submissions before the Department.
The judges held that the Department ought not to have relied upon the statements of witnesses, who were not cross-examined by the petitioner firm, while passing the assessment orders, especially after having given an undertaking before a single judge of the High Court on September 28, 2021, that those statements would not be relied upon. “Such an act of the assessing authority is contemptuous in nature,” they observed.
