The veteran Congress leader termed the development as "politically motivated" and said that he would contest the orders and file an appeal in the High Court or in the Supreme court, if the need arose.
"The Income tax Tribunal had been set up by Union Finance minister Arun Jaitley and in spite of four judges in the tribunal, two special judges were sent from Delhi to hear my case, thus the matter is politically motivated," Singh alleged.
"We fail to comprehend as to how the assessment order accepting the genuineness of carrying out the agricultural operations and earning a huge income in such circumstances can be considered as an order made after proper inquiry, as has been canvassed by the assessee.
"It is a case of a patent non-application of mind by the assessing officer (AO) to the facts, which were loudly calling for in-depth investigation. In our considered opinion, the Commissioner of Income Tax (CIT) was fully justified in setting aside the assessment order and directing the AO to frame a fresh assessment," said the order.
More From This Section
The Himachal Chief Minister and his LIC agent Anand Chauhan had filed appeal against the order of the Income Tax department for reopening his tax returns.
As per the brief facts of the case, the assessee had filed original return of income on July 29, 2010 declaring total income of Rs 44,67,584 plus agricultural income of Rs 15 lakhs.
The assessee filed revised return on March 2, 2012 declaring total income of Rs 44,67,584 plus agricultural income of Rs 2,80,92,500.
The CIT, on perusal of records, observed that the assessment was completed in a routine and casual manner without making any effective inquiry.
After entertaining objections and replies from the assessee, the CIT came to hold that the assessing officer passed an erroneous order prejudicial to the interests of the revenue, inter alia, on the ground that the revision of return was wrongly accepted, accounting principles were wrongly considered and accepted in as much as the agricultural income was not declared on the basis of mercantile system of accounting.
The income tax department had contended that assessee had invested Rs 3,84,92,500 in LIC policies, whereas additional income declared in the revised return was only Rs 2,65,92,500.
The CIT had then directed the assessing officer to frame a fresh assessment in accordance with the law and after making due inquiries.