ARYAN PUMPS AND ENVIRO SOLUTIONS PVT. LTD. vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT AND ORS

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WP/13200/2022HC BombayHCBM01045540202213 January 2023Author: HON'BLE SHRI JUSTICE DHIRAJ SINGH THAKUR,HON'BLE JUSTICE KAMAL KHATA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the assessment order was unsustainable and violated the principles of natural justice. The Court agreed with the petitioner's argument that the opportunity granted to respond to the show cause notice would be illusory if the reply and supporting documents were not considered in their entirety. The Court reasoned that if the documents were indeed illegible, the Assessing Officer should have sought legible copies from the petitioner before passing the assessment order. The Court acknowledged that the Assessing Officer might be constrained by limitation periods but emphasized that this cannot justify a violation of natural justice. Consequently, the Court set aside the impugned assessment order and all consequent actions. The Assessing Officer was directed to pass fresh orders after considering the petitioner's reply and legible copies of the documents, which the petitioner was to furnish within one week. The fresh assessment order was to be passed preferably within four months.

What were the facts?

The petitioner, Aryan Pumps & Environment Solution Pvt. Ltd., challenged an order of assessment dated September 19, 2022, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961. The primary ground for challenge was that the assessment order was passed without considering the petitioner's reply to a show cause notice dated March 17, 2022. The petitioner had submitted a response along with 527 documents. However, the Assessing Officer noted in the assessment order that certain pages of the submitted compilation (pages 11-45 and 253-516) were not legible and could not be reviewed. The petitioner argued that the assessment order was unsustainable due to the non-consideration of these documents.

What were the issues?

1. Whether the order of assessment passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, is unsustainable due to the Assessing Officer's failure to consider the petitioner's reply and supporting documents submitted in response to the show cause notice dated March 17, 2022. Assessee's Contention: The petitioner argued that the assessment order is unsustainable because the Assessing Officer did not properly consider the documents filed in support of its response to the show cause notice. The petitioner contended that if documents were illegible, the Assessing Officer should have requested legible copies instead of proceeding with the assessment. The petitioner asserted that a failure to consider the entire reply violates the principles of natural justice. Revenue's Contention: The judgment does not record any specific arguments made by the revenue.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

13-WP-13200-2022.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURI ICTION WRIT PETITION NO. 13200 OF 2022 Aryan Pumps & Environment Solution Pvt. Ltd. A company having its address at : Survey No.38/2/2, Narhe Road, Narhe Gaon, Haveli, Pune 411 041. … Petitioner Versus

1.

Assessment Unit, Income Tax Department, National Faceless Assessment Centre, Through the Principal Chief Commissioner of Income Tax (National Faceless Assessment Centre, Delhi) 2 The Assistant Commissioner of Income-Tax, Circle 1(1), Pune 3 The Union of India Through the Principal Secretary, Department of Revenue, Ministry of Finance, New Delhi …Respondents ***** Mr.Mihir Naniwadekar a/w. Mr.Rohan Deshpande i/b Ms.Farzeen Khambatta, Advocate for petitioner. Mr.Suresh Kumar, Advocate for respondents. CORAM : DHIRAJ SINGH THAKUR &

KAMAL KHATA, JJ. DATE : 13th JANUARY, 2023. P C :

1.

The petitioner challenges the order of assessment, dated 19th Shraddha Talekar, PS 1/4 SHRADDHA KAMLESH TALEKAR SHRADDHA KAMLESH TALEKAR Date: 2023.01.18 18:29:51 +0530

13-WP-13200-2022.doc September 2022 passed under section 143 (3) read with section 144B of the Income Tax Act, 1961 (‘the Act’).

2.

The challenge, primarily, is on the ground that the order of assessment was passed, without considering the reply submitted by the petitioner to the show cause notice, dated 17th March 2022. It appears that by virtue of the show cause notice, dated 17th March 2022, the petitioner was required to show cause as to why the proposed variations, as suggested in the said show cause notice, be not made. The petitioner was required to submit its response, by 19th March 2022. 3. The petitioner appears to have submitted its response along with the documents, all numbering 527. Some of the documents so fled, were found to be not legible, which fact is even refected in the order of assessment passed by the Assessing Offcer.

4.

The Assessing Offcer, in the order of assessment, has clearly held that pages 11 to 45 and 253 to 516 of the compilation, totaling 35+264 pages could not be gone through by the said Assessing Offcer as the same were not legible. It is in the light of Shraddha Talekar, PS 2/4

13-WP-13200-2022.doc the aforementioned facts that learned counsel for the petitioner urged that in absence of a proper consideration of the documents fled in support of its response to the show cause notice, dated 17th March 2022, the order of assessment would be unsustainable.

5.

We have no reason to disagree with the arguments so advanced, as the reply to the show cause notice, unless and until, considered in its entirety, would render the opportunity so granted to the petitioner, quite illusory. Principles of natural justice would certainly be said to have been violated, if a proper consideration was not accorded to the documents, and the response in its correct perspective. It goes without saying that in case, the documents fled by the petitioner were not legible, the petitioner could have been asked to furnish legible copies of the same, instead of rushing through the matter for purposes of passing the order impugned.

6.

We understand that the Assessing Offcer might be constrained to pass the orders of assessment, keeping in view the period of limitation for passing such orders, yet the same cannot Shraddha Talekar, PS 3/4

13-WP-13200-2022.doc be upheld, in violation of principles of natural justice, writ large on the face of such order of assessment.

7.

Be that as it may, we set aside the order impugned and all consequent actions based thereupon. The Assessing Offcer will pass fresh orders, after considering the reply and the documents, legible copies whereof would be furnished by the petitioner within one week from today. The order of assessment be passed preferably, within a period of four months. Legible copies be fled within a period of one week from the date, the assessee is given access to the concerned portal.

8.

The writ petition stands disposed of. [ KAMAL KHATA, J. ] [DHIRAJ SINGH THAKUR, J.] Shraddha Talekar, PS 4/4

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