The Delhi High Court quashed the Income Tax Demand on Mobikwik as the E-Filing portal was dysfunctional.
The petitioner, Mobikwik’s case was picked up for scrutiny, and accordingly, a notice under Section 143(2) of the Act was issued. Thereafter, during the course of the assessment proceedings, several notices were served on the petitioner under Section 142(1) of the Act whereby information was sought from the petitioner. It is the petitioner’s case that, as and when information was sought, the same was furnished.
As per the records as on previous occasions, a show cause notice was served on the petitioner, on 11.06.2021, at about 5:44 P.M. To be noted, 11.06.2021 was a Friday. The said show cause notice, issued under Section 142(1) of the Act, required the petitioner to furnish confirmations and audited financial statements of non-residential investors mentioned therein. The petitioner was also called upon to show cause as to why the foreign remittances received from the investors named therein should not be treated as unexplained income and added to the petitioner’s returned income under Section 68 of the Act. The petitioner was, however, given time only till 11:00 A.M. on 14.06.2021, which was a Monday.
Mr. Deepak Chopra, the counsel for the petitioner claimed that it was unable to respond to the show cause notice as the e-filing portal, maintained by the revenue, was not functional. It is claimed by the petitioner that, even on 15.06.2021, when the impugned assessment order was passed, the e-filing portal was dysfunctional.
The division bench of Justice Rajiv Shakdher and Justice Talwant Singh observed that the timeframe set out in the show cause notice dated 11.06.2021 was extremely narrow, and that the e-filing portal was dysfunctional, these are good enough reasons to set aside the impugned assessment order, with liberty to the AO to continue the assessment proceedings from the stage at which they were positioned when the show cause notice dated 11.06.2021 was issued. The court clarified that the revenue will be at liberty to call for further information, if thought necessary, before proceeding to frame the assessment order. In particular, the petitioner will furnish the FIRC concerning GMO, which is presently not on record.
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