In a major relief to Lulu International Shopping Malls Private Limited, the Kerala High Court quashed an assessment order passed in the absence of consideration of the reply filed by the petitioner.
The present writ petition has been filed seeking to quash the order passed by the third respondent by adding an amount of Rs.21,86,27,050/- to total income under Section 198 of the Income Tax Act, 1961 and losses have been computed at Rs.46,93,51,692/-.
The petitioner company is an assessee under the provisions of the Act, 1961. The Income Tax Authorities initiated proceedings under Section 148 of the Act, 1961 with respect to the assessment year 2016-2017. The third respondent, Assessment Unit Income Tax Department has issued show cause notice asking the petitioner assessee to show cause as to why the proposed variation of Rs.21,86,27,050/- should not be made and directing the petitioner to submit its response through registered e-filing account.
Thereafter, when the petitioner tried to upload the response pointing out its objections and requesting an opportunity of hearing before finalisation of assessment, it could not upload the same, since the window was closed. Accordingly, the petitioner has sent an e-mail pointing out its inability to upload reply and requesting to open the e-proceedings facility in the web portal, and the Delhi Samadhan Faceless Assessment forwarded the said email to the third respondent.
The counsel for the petitioner, Harisankar V Menon submitted that the denial of extension of seven days’ time sought for and the issuance of the impugned assessment order without passing any orders on the request of the petitioner, are in violation of the constitutional rights guaranteed under Article 14 of the Constitution of India.
John Joseph, the Standing Counsel who appeared for the Revenue, submitted that the petitioner was given enough and more opportunities in respect of various notices issued to him and the petitioner has failed to avail those opportunities and it culminated in passing of the assessment order.
A Single Bench of Justice Dinesh Kumar Singh observed that “The liability of the tax is a civil liability. Principles of natural justice ought to be adhered to, while finalizing the assessment proceedings in respect of tax.”
“I am of the view that the assessing officer has proceeded in a hurried manner to some extent, which is in violation of the principles of natural justice. Therefore, the impugned order is set aside and the respondents are directed to open the window for uploading objection to the show cause notice. No further time will be granted to the petitioner for the purpose” the Bench concluded.
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