In a recent judgement, the Madras High Court (HC) held that the assessment order passed before the submission of documents by the assessee is a gross violation of the natural justice principle.
KPL Assets LLP, the petitioner challenged the impugned assessment orders on the ground of violation of the principles of natural justice. A Show Cause Notice was received by the petitioner from the respondent on 10.05.2022 under Section 143(3) of the Income Tax Act.
The petitioner was directed to submit the details and produce the documents and was also directed to submit a reply on or before 17.05.2022. The petitioner submitted a reply on 17.05.2022 to the Show Cause Notice issued by the respondent dated 10.05.2022.
The petitioner has stated that since the documents/records sought by the respondent in the Show Cause Notice are voluminous in nature, they have sought for two weeks to furnish the required details as per the Show Cause notice. Even without waiting for the documents to be submitted by the petitioner, the two assessment orders have been passed.
It was argued by the respondent that since the assessment orders will have to be passed on or before 31.05.2022 being the period of limitation prescribed under Section 153(B) of the Income Tax Act, the respondent had to pass the impugned assessment orders on 31.05.2022.
A Single member Coram comprising Justice Abdul Quddhose observed that since the documents have already been given by the petitioner to the respondent during the pendency of these writ petitions, no prejudice would be caused if the assessments are redone in respect of the assessment years 2019-20 and 2020-21.
The Court quashed the impugned assessment orders have to be quashed and remanded the matter back to the respondent for fresh consideration, on merits and in accordance with law within a time
Further directed the respondent to pass final orders, on merits and by law within a period of eight weeks from the date of receipt of a copy of this order, after adhering to the principles of natural justice.
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