Unfair Assessment or Misuse of Power: Compilation of few Cases where the Courts have fined the Income Tax Authorities

Here is the list of few cases where the courts have fixed the accountability of the income tax authorities and have fined them for either negligence or gross violation of the principle of fair Assessment:

1. CIT vs. Smt. Leela P. Hedge, ITA No. 834/Bang/2013 (Bangalore ITAT):
   In this case, the Bangalore Bench of the ITAT imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee and for not giving the assessee an opportunity to cross-examine the witnesses produced by the department.

2. PCIT v. M/s. VVD & Sons Pvt. Ltd., (2019) 105 taxmann.com273 (Madras): In this case, the Madras High Court imposed a fine of Rs. 50,000 on an income tax officer for violating the principles of natural justice by passing an order without giving the taxpayer an opportunity to cross-examine the witnesses.
3. J.K. Synthetics Ltd. v. Union of India, AIR 1993 SC 594:
   In this case, the Hon’ble Supreme Court of India warned the CBDT against making arbitrary assessments and directed the CBDT to follow the principles of natural justice and fair play while making assessments.
4. All India Federation of Tax Practitioners v. Union of India, (2007) 293 ITR 63 (Bom):
   The Bombay High Court in this case imposed a fine of Rs. 10,000 on the Income Tax Department for not allowing the assessee to cross-examine the witness produced by the department during the assessment proceedings.
5. P. Jeyaseelan vs. DCIT, ITA No. 1518/Mds/2011 (Chennai ITAT):
   In this case, the Chennai Bench of the ITAT imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee and for not giving the assessee an opportunity to cross-examine the witnesses produced by the department.
6. CIT vs. Vasundhara Farms Pvt. Ltd. (2015) 57 taxmann.com21 (All.):
   In this case, the Allahabad High Court imposed a fine on the ITO for his careless approach during the assessment and for making additions to the income of the assessee without any basis.
7. CIT v. S. Chenniappa Mudaliar, (1969) 74 ITR 41 (SC):
   In this case, the Income Tax Officer had issued a notice to the assessee, but did not give the assessee an opportunity to cross-examine a witness whose statements were relied upon by the department. The Supreme Court held that this violated the principles of natural justice and imposed a penalty of Rs. 5,000 on the Income Tax Officer.

8. CIT vs. Hindustan Times Ltd. (2001) 117 Taxman 590 (Delhi):
   In this case, the Delhi High Court imposed a fine on the ITO for his careless approach during the assessment and for making additions to the income of the assessee based on flimsy grounds.
9. ACIT vs. Dakshin Foundry & Engineering Co. (2010) 38 SOT 266 (Chennai):
   In this case, the Chennai Bench of the ITAT imposed a fine on the ITO for his careless approach during the assessment and for making additions to the income of the assessee without any basis.

10. Assistant Commissioner of Income Tax v. M. Bala Subramanian:
    In this case, the Madras High Court imposed a fine of Rs. 50,000 on the Income Tax Officer for not adhering to the principles of natural justice.

11. CIT v. Manoj Kumar Agrawal, (2010) 328 ITR 538 (All):
    In this case, the Allahabad High Court imposed a fine on the ITO for passing an assessment order without considering the submissions made by the assessee during the assessment proceedings.
12. P. Bhattacharya v. ITO, ITA No. 1899/Mum/2016:
    In this case, the Mumbai Income Tax Appellate Tribunal imposed a fine of Rs. 10,000 on an income tax officer for not following the principles of natural justice.
13. Prasad Agro Industries v. ITO, (2005) 3 ITD 336 (Pune):
    In this case, the Pune Bench of the ITAT imposed a fine on the ITO for passing an assessment order without considering the submissions made by the assessee during the assessment proceedings.
14. Smt. Kiran Devi v. ITO, (2007) 106 TTJ 211 (Del):
    In this case, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) imposed a fine on the ITO for not considering the submissions made by the assessee during the assessment proceedings.
15. CIT v. Pradeep Kumar Gupta, (2010) 323 ITR 486 (Del):
    In this case, the Delhi High Court warned the CBDT against making arbitrary additions to the income of a taxpayer without any basis and directed the CBDT to make assessments based on concrete evidence.
16. ACIT vs. Dakshin Foundry & Engineering Co. (2010) 38 SOT 266 (Chennai):
    In this case, the Chennai Bench of the ITAT imposed a fine on the ITO for his careless approach during the assessment and for making additions to the income of the assessee without any basis.

17. Surendra Trading Company v. ITO, (2007) 105 TTJ 878 (Del):
    In this case, the Delhi Bench of the ITAT imposed a fine on the ITO for not considering the submissions made by the assessee during the assessment proceedings.
18. Prabhudas Lilladher Pvt. Ltd. vs. ACIT, ITA No. 7192/Mum/2012 (Mumbai ITAT):
    In this case, the Mumbai Bench of the ITAT imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee and for not granting adequate time to the assessee to present his case.
19. CIT vs. Laxman Das Khandelwal (2017):
    The Rajasthan High Court imposed a fine of Rs. 25,000 on the Income Tax Officer for not following the proper procedure and harassing the taxpayer.

20. CIT v. Gujarat Gas Co. Ltd., (2005) 273 ITR 596 (Guj):
    In this case, the Gujarat High Court warned the CBDT against adopting a casual and cavalier approach while making assessments and directed the CBDT to make assessments in a fair and reasonable manner.

 

21. Anil Kumar vs. Commissioner of Income Tax (2011):
    The Delhi High Court imposed a fine of Rs. 25,000 on the Income Tax Officer for not following the proper procedure and making a wrong assessment of the taxpayer’s income.

22. CIT v. S. V. Gopala Rao, (2015) 374 ITR 498 (Karn):
    In this case, the Karnataka High Court warned the CBDT against making assessments based on assumptions and surmises and directed the CBDT to make assessments based on concrete evidence.

23. CIT v. B.C. Srinivasa Setty, (1981) 128 ITR 294 (SC):
    In this case, the Supreme Court of India warned the CBDT against adopting a mechanical approach while making assessments and directed the CBDT to apply its mind and take into account all the relevant factors before making an assessment.

24. CIT v. Som Nath Sethi, (2012) 343 ITR 354 (Del):
    In this case, the Delhi High Court warned the CBDT against adopting a mechanical approach while making assessments and directed the CBDT to apply its mind and take into account all the relevant factors before making an assessment.

25. ACIT vs. Chawla Interbild Construction Co. Pvt. Ltd. (2003) 86 ITD 36 (Del):
    In this case, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) imposed a fine on the ITO for his careless approach during the assessment and for making additions to the income of the assessee without any basis.

 

26. M/s Vijayakumar Timbers v. Assistant Commissioner of Income-tax, (2018) 96 Taxmann.com 114 (Madras):
    In this case, the Madras High Court imposed a fine on the ITO for not considering the submissions made by the assessee during the assessment proceedings.

27. ACIT vs. Rajesh Kumar Gupta (2017) 84 taxmann.com376 (Delhi):
    In this case, the Delhi High Court imposed a fine on the ITO for his careless approach during the assessment and for making additions to the income of the assessee based on mere suspicions and conjectures.

28. CIT vs. Nand Lal Dhoot (2013) 358 ITR 326 (Bom):
    In this case, the Bombay High Court imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee during assessment proceedings.
29. DCIT vs. M/s. Bhandari Foam & Furniture (2012) 138 ITD 113 (Jodh.):
    In this case, the Jodhpur Bench of the Income Tax Appellate Tribunal (ITAT) imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee during assessment proceedings.
30. CIT vs. Jyoti Foundation (2014) 365 ITR 255 (Del):
    In this case, the Delhi High Court imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee during assessment proceedings.

31. Ajay Kumar vs. Commissioner of Income Tax (2014):
    The Punjab and Haryana High Court imposed a fine of Rs. 50,000 on the Income Tax Officer for not passing a reasoned order.

32. Pr. CIT v. Supermax Personal Care Pvt. Ltd., (2019) 312 CTR (Del) 558:
    In this case, the Delhi High Court imposed a fine of Rs. 25,000 on an income tax officer for violating the principles of natural justice.

33. Prabhudas Lilladher Pvt. Ltd. vs. ACIT, ITA No. 7192/Mum/2012 (Mumbai ITAT):
    In this case, the Mumbai Bench of the ITAT imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee and for not granting adequate time to the assessee to present his case.
34. CIT v. Saurashtra Cement Ltd., (2012) 343 ITR 263 (Guj):
    In this case, the Gujarat High Court warned the CBDT against making additions to the income of a taxpayer based on vague and general observations and directed the CBDT to make assessments based on specific and cogent evidence.

35. ACIT vs. Late Mahesh Bansal (2013) 37 taxmann.com476 (Delhi):
    In this case, the Delhi Bench of the ITAT imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee during assessment proceedings.

36. ACIT vs. Chawla Interbild Construction Co. Pvt. Ltd. (2003) 86 ITD 36 (Del):
    In this case, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) imposed a fine on the ITO for his careless approach during the assessment and for making additions to the income of the assessee without any basis.
37. ACIT vs. Rajesh Kumar Gupta (2017) 84 taxmann.com376 (Delhi):
    In this case, the Delhi High Court imposed a fine on the ITO for his careless approach during the assessment and for making additions to the income of the assessee based on mere suspicions and conjectures.
38. CIT vs. Vasundhara Farms Pvt. Ltd. (2015) 57 taxmann.com21 (All.):
    In this case, the Allahabad High Court imposed a fine on the ITO for his careless approach during the assessment and for making additions to the income of the assessee without any basis.
39. DCIT vs. DVS Impex Pvt. Ltd., ITA No. 1675/Kol/2017 (Kolkata ITAT):
    In this case, the Kolkata Bench of the ITAT imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee and for not granting adequate time to the assessee to present his case.
40. CIT vs. Smt. K. Rama Devi, ITA No. 1009/Vizag/2017 (Visakhapatnam ITAT):
    In this case, the Visakhapatnam Bench of the ITAT imposed a fine on the ITO for passing an assessment order without considering the submissions of the assessee and for not granting adequate time to the assessee to present his case.