Delhi HC quashes Income Tax Notice against Schneider Electric [Read Order]

The Delhi High Court bench consisting of Justice Manmohan and Justice Manmeet Pritam Singh Arora has quashed the income tax proceedings against M/s Schneider Electric India Pvt. Ltd wherein the department treated IGST Refund as income chargeable to tax has escaped assessment.

The writ petition has been filed by the petitioner, M/S Schneider Electric India Pvt. Ltd challenging the show cause notice under section 148A(b) of the Income Tax Act, 1961, order under Section 148A(d), and the notice issued under section 148 of the Act for the Assessment Year 2018-19.

The Counsel for the petitioner Deepak Chopra, Rohan Khare, and Pratishtha Singh, submitted that in terms of the “information” available with the Respondent No 1, it has been alleged that the Petitioner’s claim for IGST Refund was incorrect and hence, the said amount “is required to be disallowed”. He states that an IGST Refund, being a balance sheet item, is not a claim made in the profit and loss account, and by no stretch of imagination can the same be termed as “income chargeable to tax having escaped assessment” and hence, in terms of Section 147 of the Act as well as the first proviso to Section 148, the show cause notice dated is patently illegal.

The Counsels also submitted that the order passed under section 148A(d) of the Act and notice issued under section 148 of the Act have been passed/issued in gross violation of the principles of natural justice. He stated that the impugned order does not even mention that the petitioner had filed an application seeking an adjournment so as to enable it to file a reply on merits.

The Court observed that “the impugned order under Section 148A(d) and the notice issued under Section 148 of the Act dated 31st March 2022 for the Assessment Year 2018-19 are set aside and the matter is remanded back to the Assessing Officer for a fresh decision. The Petitioner is given liberty to file its additional reply to the show cause notice issued under Section 148A(b) of the Act within two weeks.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.