The Karnataka High Court has held that the response sought by AO to show cause notice, giving less than 24 hours, is arbitrary and against the Principles of Natural Justice.
The petitioner, MMG Constructions claims to be a limited liability partnership [LLP] firm and is a Builder, Developer, and Contractor. It transpires that for the assessment year under consideration i.e., 2018-19, it has filed its return of income under Section 139(4) of the Act, which was processed under Section 143(1) of the Act. Vide notice dated 22.09.2019 issued by the Assistant Commissioner of Income-Tax (e-Verification) under Section 143(2) of the Act, the petitioner was informed that its case has been selected for scrutiny on the issues relating to “income from real estate business” and “investment in immovable property” and the petitioner was instructed to further conduct the proceedings through e-portal. Thereafter by letter dated 15.10.2020 issued by respondent No.4, the petitioner was informed that assessment proceedings pending in the case of the petitioner henceforth shall be completed under Faceless Assessment Scheme, 2019, pursuant to which the notice under Section 142(1) of the Act was issued. The jurisdictional Assessing Officer issued the notice dated 28.09.2021 under section 142(1) of the Act, calling upon the petitioner to furnish the documents and information on or before 29.09.2021 at 4.00 p.m.
K.V.Aravind appearing for the Revenue submits that the status of the assessee whether resident or non-resident has resulted in passing the impugned assessment order. However, learned counsel is not in a position to dispute the arguments advanced by the learned counsel for the assessee, inasmuch as, breach of the principles of natural justice in providing less than 24 hours time for giving reply to the notice issued by the Assessing Officer.
The division bench of Justice S.Sujatha and Justice S. Vishwajith Shetty has held that where a response was sought by the Assessing Officer to the show cause notice, giving less than 24 hours, it has been held to be arbitrary resulting in palpable injustice. Thus, without going into merits or demerits of the case, it would be sufficient in restoring the proceedings to the Assessing Officer to provide a reasonable opportunity of hearing to the petitioner with liberty to file an additional reply, annulling the assessment order.
“The petitioner – assessee is at liberty to file an additional reply to the notices issued, along with documents, if any, within a period of four weeks from the date of receipt of the certified copy of the order. The Assessing Officer shall consider the same in accordance with law and conclude the assessment in an expedited manner,” the court said.
MMG CONSTRUCTIONS LLP 617, FIRST FLOOR, NEW KANTHARAJA, URS ROAD, CHAMARAJA MOHALLA, KUVEMPUNAGAR, MYSURU vs UNION OF INDIA THROUGH THE SECRETARY, MINISTRY OF FINANCE
CITATION: 2022 TAXSCAN (HC) 164
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