Income Tax SCNs Missed After Accounts Executive Resigned, but Records Show updated Email Actively Used: Madras HC quashes with Cost of 50k to cancer institute [Read Order]
The Court was inclined to provide one final opportunity to the petitioner to present its case, as the impugned order had been passed without a proper reply
The Madras High Court set aside an ex-parte assessment order but imposed a cost of ₹50,000 on the petitioner, directing the payment to the Adyar Cancer Institute for its recalcitrant conduct.
Wandse Solutions India Private Limited (Petitioner) challenged the assessment order dated 18.03.2025 for the Assessment Year (AY) 2023-2024, arguing that the underlying show cause notices (SCNs) and intimations were missed.
The petitioner's sole explanation for its non-response was that its Accounts Executive, Vishal Raj, had resigned from the company on 10.04.2024. Consequently, the email ID handled by the said executive went unnoticed, leading to the assessment order being passed ex-parte due to non-cooperation. The counter-affidavit filed by the Revenue presented a contradictory fact.
The Department highlighted that the petitioner had subsequently used a different primary email ID for filing the Income Tax Return for the Assessment Year 2024-2025. This indicated that the company was active and had an updated point of contact, undermining the claim that all communications were missed solely due to the executive's resignation.
The bench of Justice C. Saravanan acknowledged that the petitioner's explanation for missing the notices "cannot be countenanced." The Court was inclined to provide one final opportunity to the petitioner to present its case, as the impugned order had been passed without a proper reply.
Considering the petitioner’s failure to cooperate, which culminated in the ex-parte order, the Court noted that the company had been "recalcitrant." The Court quashed the assessment order subject to strict conditions.
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The Court directed the petitioner to pay a sum of ₹50,000/- (Rupees Fifty Thousand only) by way of Demand Draft directly to the Dean, Adyar Cancer Institute (WIA), East Canal Bank Road, Adyar, Chennai, within a period of 15 days.
The Court further directed the petitioner to file a complete reply to the Show Cause Notice, along with all documents called for, within a period of 30 days, both offline and by uploading them in the web portal.
The court directed that upon compliance with these conditions, the Assessment Unit was directed to pass a fresh order on merits within nine months. The writ petition disposed of and the miscellaneous petition were closed.
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