The court emphasized the necessity for Assessing Officers to consider all relevant documents in assessment proceedings, as failure to do so violates principles of natural justice.

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr. Deepak R. Shah for the petitioner and learned senior standing counsel Mr. Karan Sanghani for the respondent. Having regard to the controversy involved in this matter, which is in a narrow compass, with the consent of learned advocates for the respective parties, the matter is taken up for hearing.

2. Rule returnable forthwith. Learned advocate Mr. Sanghani waives service of notice of rule.

3. This Court passed the following order on 29.11.2021:

“1. The petitioner is a partnership firm carrying on the business of processing and trading in tobacco. The case of the petitioner was selected for scrutiny on 22.09.2019. After issuance of notice and calling for the particulars, a draft assessment order was proposed by the respondent for making addition under Section 68 of the Income Tax Act. A request also had been made by the petitioner for providing Video Conferencing link by the petitioner. The notice and draft assessment order proposing the variations have been issued, which have been replied to by the petitioner.

1.1 It is a grievance of the petitioner that the respondent has passed the order adding the receipt of loans under Section 68 of the Act in complete disregard to the documents substantiated by the petitioner therein proceedings. Assessment order has been passed on 28.09.2021 and that has aggrieved the petitioner, who has approached this Court with following prayers:

“6. The petitioner accordingly prays that this Hon’ble Court may be pleased to issue a writ of Certiorari or any other writ in the nature of certiorari or a writ of Mandamus or any other writ in the nature of Mandamus:

(a) To quash and set aside the impugned order dated 28.09.2021 and the demand notice at “Annexure-I colly.”

(b) Pending admission and final hearing, stay the implementation of the impugned order dated 28-09- 2021 and the demand notice at “Annexure-I colly.”

2. We have heard the learned Advocate Mr. Tej Shah, who depending on the pleadings & materials on record has urged that once new addition of acceptance of the loan to the tune of Rs. 2.6 Crores (rounded off) had been requested by the petitioner, non-recognition of the testimonials which had been furnished along with the proceedings of hearing, would necessitate interference from this Court.

He has relied upon the decision of this Court rendered in Special Civil Application No. 7662 of 2021 and also the decision of the Bombay High Court in the case of Mantra Industries Ltd. Vs. National Faceless Assessment Center (NFAC Or NeAC), (2021) 131 taxmann.com 165 (Bombay).

3. Notice for final disposal returnable on 14.12.2021.

3.1 Interim relief in terms of Para 6(b) is granted till returnable date.”

4. The brief facts of the case are as under:

The petitioner, a partnership firm, is engaged in the business of manufacture and sale of Tobacco. The petitioner filed the Return of Income for the Assessment Year 2018-19 on 02.10.2018 declaring income of Rs. 4,10,940/-.

4.1 The case of the petitioner was selected for scrutiny and Notice u/s. 142(1) of the Income Tax Act, 1961 (for short “the Act”) was issued on 17.01.2020 seeking various details, which was followed by further Notice dated 20.01.2021. The petitioner filed reply dated 01.02.2021 in response to the Notice.

4.2 The petitioner, thereafter, received Notice dated 19.03.2021 in the form of a Draft Assessment Order proposing to make an addition of Rs. 1,16,98,952/- u/s. 68 of the Act on the ground that the petitioner had repaid the loan during the year under consideration.

4.3 The petitioner, by reply dated 23.03.2021, submitted documents in respect of each of the deposits/loan accounts where fresh funds were received/repaid, which contained details of (i) confirmation with PAN No. (ii) copy of ledger account from the books (iii) copy of bank statements of respective parties from where the funds have been received and where the payments are credited and (iv) copy of ITR for A.Y. 2018-19 in cases where the