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sanny (mgr)     04 January 2012

De novo assessment order

Hi All,

  Here is the case in brief :

1. In Dec 2010, the AO framed a high tax demand of Rs. 8 lacs + and then attached my bank a/c in March withdrawing Rs.8 lacs

2. We had applied before the CIT(Admin) ( hoping for  a faster redressal than Appeals). The CIT ( admin) after hearing our side and getting report from AO ( the new one, the earlier one got transferred) decided the case in our favour. He wrote ( and I quote) " Against the above backdrop, I hereby set aside the assessment order dated 27.12.2010 with the direction to the AO to reframe the assessment de novo in the light of the observations made in the preceding paragraphs. It is needless to say that while doing so the AO will afford a reasonable oppurtunity of being heard by the assessee. "

The CIT had made a few ( three to be exact) observations regarding the points which needs to be covered by the AO. Now the AO has sent us a reassessment notice covering 40 points of which a majority have already been completed and some are quite flimsy ( like bonus paid to employees).

Despite notices to the AO and alla concerned, nobody has bothered to give our money back.

In my understanding, 

1. In order to start a de novo assessment, we should first get our seized money back, right ?

2. Can the AO go outside the points which have been marked by the CIT ?

 

 We are planning to move the high court in this regard. Can we approach any other authority ?

Any advice is welcome

 

rgds

Sanny



 1 Replies

C. P. CHUGH (Practicing Lawyer)     09 January 2012

Once an assessment order is set aside for denovo assessment, the incumbent AO is bound to make an assessment afresh.  He is guided by theobservations made by CIT but is not bound and limited to those guidance. He can examine each and every aspect of assessment which to his mind is necessary for the completion of assessment.  So far as the refund is concerned, since the original assessment is set-aside and you have fully paid taxes due as per your return, the AO has no reason to withhold the excess amount paid either by you or on your behalf and he must refund it expediously and that too with interest. You should make an application to AO for refund followed by a reminder and acopy to Addl/Jt CIT of the range, followed by  another reminder and a copy to CIT.  If nothing happens, make applicatiion to ombudsman of your territory. Hope this will solve your problem.


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