ARG CG DEVELOPERS LLP vs. ASSISTANT COMMISSIONER OF INCOME TAX

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CW/6290/2021HC RajasthanRJHC02035780202120 March 2025Author: AVNEESH JHINGAN,MANEESH SHARMA2 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the assessment order was passed without providing a reasonable opportunity to the petitioner to defend their case. It was an undisputed fact that a lockdown was imposed due to the second wave of the COVID-19 pandemic. The petitioner's request for an extension to file their reply until the lockdown was lifted was not considered, leading to an ex-parte assessment order. The Tribunal noted that while the petitioner was denied a reasonable opportunity, the limitations for finalizing proceedings were extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Consequently, the impugned order was set aside, and the matter was remitted back to the Assessing Officer for decision in accordance with the law. The writ petition was allowed.

What were the facts?

The petitioner, Arg Cg Developers Llp, filed an income tax return declaring nil income for Assessment Year 2018-19. A show-cause notice (SCN) was issued on 08.01.2021 regarding an advance of Rs. 3,50,00,000/- for land purchase. The petitioner replied on 19.02.2021, stating the transaction was through banking channels. A subsequent SCN dated 10.05.2021 asked why this amount should not be added to total income, with a response due by 12.05.2021. The petitioner requested an adjournment via email on 11.05.2021, citing the COVID-19 pandemic and statewide lockdown in Rajasthan, which was in effect until 31.05.2021. The Assessing Officer (AO) passed an ex-parte assessment order on 20.05.2021, which is under challenge.

What were the issues?

1. Whether the assessment order dated 20.05.2021 was passed without providing a reasonable opportunity to the petitioner to respond to the show-cause notice dated 10.05.2021, in light of the COVID-19 pandemic and lockdown, turning on Section 142(1) of the Income Tax Act, 1961. Assessee's Contention: The petitioner argued that the assessment order was passed without granting a reasonable opportunity to respond to the SCN dated 10.05.2021. They contended that due to the prevailing pandemic situation and lockdown, filing a reply and producing documents was not feasible. Revenue's Contention: The revenue contended that multiple opportunities were granted to the petitioner, and apart from the response to the first SCN, no further documents or replies were filed.

Which sections of the Income-tax Act were involved?

Section 142(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JP:12628-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 6290/2021 Arg Cg Developers Llp, E-52, Chitranjan Marg, C-Scheme Jaipur 302001 Rajasthan Through Its Authorised Signatory Atma Ram Gupta, (Designated Partner) S/o Late Sh. Ladhu Ram Gupta, Aged About 62 Years, R/o Flat No. 72, Madho Vilas Apartment, Modho Singh Circle, Bani Park, Jaipur-302016. ----Petitioner Versus Assistant Commissioner Of Income Tax, Ministry Of Finance, Income Tax Department, National E- Assessment Centre, Room No. 401, 2Nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi-110003. ----Respondent For Petitioner(s) : Mr. Prakul Khurana with Mr. Rajat Sharma For Respondent(s) : Mr. Sandeep Pathak HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE MANEESH SHARMA

Order 20/03/2025 AVNEESH JHINGAN, J:-

1.

This petition is filed seeking quashing of assessment order dated 20.05.2021 pertaining to Assessment Year 2018-19. 2. The brief facts are that the petitioner filed income tax return and declared nil income. On 08.01.2021, show-cause notice (for short ‘SCN’) under Section 142(1) of Income Tax Act, 1961 (for brevity ‘the Act’) was issued seeking the details and documents with regard to advance of Rs.3,50,00,000/- towards purchase of the land. The reply to the SCN was filed on 19.02.2021 stating that transaction was made through banking channels, thereafter SCN dated 10.05.2021 was issued as to why the amount of Rs.3,50,00,000/- be not added in the total income and response was to be filed by 12.05.2021. The petitioner on 11.05.2021 through E-mail requested for an adjournment. It was stated that due to second wave of COVID-19 pandemic and lockdown

[2025:RJ-JP:12628-DB] (2 of 2) [CW-6290/2021] throughout the State of Rajasthan the office of the counsel is closed and the reply will be filed as soon as the office is allowed to be opened. It was also pointed out that the lockdown in the state was upto 31.05.2021. The Assessing Officer (for short ‘the AO’) passed the impugned order on 20.05.2021 hence, the present petition.

3.

Learned counsel for the petitioner submits that the order was passed without providing reasonable opportunity to respond to the SCN dated 10.05.2021. Contention is that in view of the prevailing pandemic situation filing of reply and producing of document was not possible.

4.

As per contra, number of opportunities were granted and except for response to the first SCN, no document and reply were filed thereafter.

5.

It is an undisputed fact that the due to second wave of COVID-19 pandemic lockdown was imposed. On the request made by the petitioner for extending the time to file reply from 12.05.2021 till the lockdown is lifted was not considered and ex- parte assessment order was passed. The petitioner was denied reasonable opportunity to defend the case. On the other hand, the limitations for finalizing the proceedings were extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. 6. The impugned order is set-aside and the matter is remitted back to the AO to decide the assessment in accordance with law.

7.

The writ petition is allowed. (MANEESH SHARMA),J (AVNEESH JHINGAN),J Chandan/164 Whether Reportale: No

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