M/s. Suryamitra Exim Private Ltd. vs. The Income Tax Officer

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WP/22567/2021HC TelanganaHBHC01036704202122 April 2026Bench: P.SAM KOSHY,NARSING RAO NANDIKONDA10 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the impugned assessment order dated August 21, 2021, was passed in clear violation of the principles of natural justice. The Court noted that the assessment order repeatedly referred to a show cause notice dated August 08, 2021, and recorded the absence of a response, while conspicuously remaining silent about the department's communication dated August 16, 2021, and the petitioner's request for an extension. Crucially, the Court found it incomprehensible how the petitioner could upload a reply on August 23, 2021, if the order had indeed been passed on August 21, 2021, after which the portal is expected to close. This indicated that the order was likely passed without considering the petitioner's reply submitted on August 23, 2021. Consequently, the Court set aside the assessment order and remitted the matter back to the Assessing Officer to pass a fresh order, taking into account the petitioner's reply of August 23, 2021, and affording an opportunity of personal hearing. The Assessing Officer was directed to pass the fresh order within three months.

What were the facts?

The petitioner, M/s. Suryamitra Exim Private Ltd., filed a writ petition before the High Court of Telangana challenging an assessment order dated August 21, 2021, for Assessment Year 2018-19. The petitioner contended that the assessment order was passed in violation of principles of natural justice and without affording a fair opportunity of representation. The petitioner highlighted a series of communications and requests for time to respond to notices, including a show cause notice dated August 08, 2021, for which they sought an extension. Despite uploading a detailed reply on August 23, 2021, the assessment order, purportedly passed on August 21, 2021, made no reference to this reply and stated that no response was submitted. The petitioner also pointed out that the portal would have been closed if the order was passed on August 21, 2021, making the August 23, 2021 upload impossible.

What were the issues?

1. Whether the assessment order dated August 21, 2021, for AY 2018-19 was passed in violation of the principles of natural justice by denying the petitioner a reasonable opportunity of representation? (Question of law and fact, concerning Section 143(3) of the Income Tax Act, 1961). Assessee's Contentions: - The petitioner cooperated with the authorities and responded to notices, seeking time for detailed replies. - Despite a show cause notice requiring a response by August 11, 2021, and a subsequent communication granting time until August 20, 2021, the department passed the assessment order on August 21, 2021, without considering the petitioner's detailed reply uploaded on August 23, 2021. - The assessment order incorrectly stated that no response was submitted. - The portal's closure after August 21, 2021, contradicts the possibility of uploading a reply on August 23, 2021, suggesting potential antedating of the order. - The time granted for responding to show cause notices (three to four days) was less than the minimum seven working days stipulated in the department's Standard Operating Procedure (SOP). Revenue's Contentions: - The petitioner was issued a notice under Section 143(2) on September 22, 2019, and proceedings continued for nearly two years, providing sufficient opportunity. - The SOP regarding seven working days for response came into force after the impugned order was passed and is therefore not applicable.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 143(3)

AI-generated summary — verify with the full judgment below

134471 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY SECOND DAY OF APRIL TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITION NO: 22567 OF 2021 Between: M/s. Suryamitra Exim Private Ltd., Rep. by its Managing Director Mr. lrrinki Surya Rao S/o. l.Gangaram Aged about 60 years, 12-2-831/80' S.V. Residency, Flat No.201, Mehadipatnam, Hydrabad, R.R. District - 500 028, Telangana, lndia. .....PET]TIONER AND 't. The lncome Tax Officer, National e-Assessment Centre, lncome Tax Department, Ministry of Finance, Room No. 401, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi - 'l 10 003. 2. The Assistant Commissioner of lncome Tax' Circle - 3(1), Signature towers, Hyderabad-500004. .....RESPONDENTS Petition Under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue a wRlT oF CERTIORARI or any other writ, direction or order in the nature of a writ calling for the records pertaining to the assessment order with DIN.ITBA/AST/51143(3)|2O21- 2211035016574(1) dated 2110812021 on the file of the 1st Respondent relating to A.Y. 2018-19 and quash the same as being passed arbitrarily and in gross violation of principles of natural lustice. .€@:e

|.A.NO:1 OF 2021 Petition Under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the operation of the assessment order with DIN.ITBA/AST/S 1143(3y2O21- 2211035016574(1) dated 2110812021 relating to A.Y. 2018-1Sr and all consequential proceedings thereto including the collection of disputed taxes ;rnd levy of penalties. Counsel for the Petitioner : SRI A.V.A.SIVA KARTIKEYA Counsel for the Respondents: SMT B.SAPNA REDDY, SENIOR STANDING COUSNEL FOR INCOME TAX The Court made the following ORDER

IN THE HIGH COURT FOR'[TIE STATB OF TELANGANA AT I{YDERABAD THE HONOURABI,E SRI JUSTICE P.SAM KOSHY AND THE HONOURABI,E SRI JUSTICE NARSING RAO NANDIKONDA W.P.No.22567 OF 2021 22.04.2026 Between: M/s Suryarnitra Exim Privatc- Ltd ANT) . . Petitioner The Incorne Tax Oftlcer National E-Assessment Centre Income 1'ax Departrnent, Ministry of Finance. Room No.40l, 2"d Floor, L-r'arrr1r, JawaharlaI Nehru Stadium, Delhi-110003 &rnother . . Respondents 9BDE&, @er Hon'ble Sri .lu.vrit'e l'.Sun Ko:'ht') I-Ieard Sri A. V. A. Siva Kartikeya, learned counsel for the petitioner and Smt B. Sapna Reddy, learned Senior Standing Counsel for the Income 1-ax Department appearing for respondents. Perused the record

2 2. 'I'[re instant rvrit peririon has been f-ile<J. heir g aggrieved by the assessment order dated 11.0g.202 I lor thc asscssnlent year 20 I8 19, passed under.Section 143(j)olrhe lnconre T.ax Act (tbr short. "r he Acr"). 3, Though the inrpugned order is an appcalable ,rne, rhe present rvrit petition has becn filed invoking the writ.lurisdiction of this Court on the ground of denial ol fair opportunitl, o [. representation befbre the authorities concerned. 4. Leamed counsel fbr. the petitioner:, rel.crring to various dates cornmencing from thc first nolice issued uncler Section 143(2) of the Act on 22.09.2019, subrnits that the pcrit,oner had been cooperating with the respondent_Assessing Otficer. and had been responding to all notices_ Wherever a comprchensive response could not be furnished, the petitioner sought tirnc ro submit detailed replies. It is lurther submitted that subsequent to thc notice undcr Section 143(2) of the Acr ar.rd also under Section I42( I ) ol the Act, a show cause notice dated, 19.04.202 t was issucc, to which the petitioner responded on 2g.04.2021 and again on 06.05.202 I. Thercafter, another shorv cause notice dated 0i.0g.102 I was

3 issued, requiring a response within three (03) days, i.e., by I1.08.2021. The petitioner entered appearance and sought ten (t0) days' time. Vide communication dated 10.08.2021' the department, by letter dated 16.08.2021, grar-rted four (04) days' tirne to file a cornprehensive repty by 20.08.202 1. lhc petitioner sought lurther tirne to subrnit a detailed response: horvever, there was no response from the department. Nonetheless. the petitioner uploaded a detaited reply along u'ith relevarrt dt'curnettts on 2i'08'2021, fbr rvhich an acknowledgment numbcr r'i'as gctlerated. However. the impugned order is stated to have been passed on 21.08'2021' 5. ln the irnpugned order, there is no reference to the inter se correspondence between the Assessing Ofllcer and the assessee dated 10.08.2021, 16.08.2021, etc- On the contrary, the Assessing Officer, at several places, records that no response was submitted by the petitioner. 6. lt is further contended that if the irnpugned order had indeed been passed on 21.08.202 l. the portl would have been closed, and the petitioner could not have uploaded the reply on 23.08.2021 . According to the petitioner'. this gives rise to a

'l I 4 presuntption that the order nlay have been antcdlted. It is also contended that as per the SOp issued by the department, a rninirnum of seven (07) working days' tinte ought to be granted tbr responding to a show cause noticc, wher.cas in thc pr.esent case only three or four days' tirne was granted, which is in contravention of the said SOP. 7. -fhus, Icarned counseI lbr the petitiouer srrbmits that tho irnpugned order. having been passed in violation of principles ol natural justice and withotrt altbrding reasonable opponunity of hearing. deserves to be interfered with. 8. Per contra, leaured Senior. Standiug Counsel, opposing the writ petition, subrnits tltat the petitioner was issue.d notice under Section 143(2) of rhe Acr as early as on 22.0!r.2019 and the proceedings continued fbr nearl-r,two years, during rvhich sulficient opportunity was afforded. J'herefore, it cannot be said that there was denial of opportunity. 9. With regard to the contcntion relating [o grant of seven *111", days under the SOp. leamed Standing Counsel submirs

5 that the said SOP came into force subsequent to the passing of the impugned order and hence cannot be made applicable to the present case 10. On a query put by the Bench, learned Standing Counsel fairly accepts that upon passing of the assessment order, the portal would ordinarily be closed. However, she is unable to explain how the petitioner was able to upload the reply on 23.08.2021 after the alleged passing of the assessment order on 21.08.202 l. There is also no dispute that the petitioner uploaded a detailed reply along with supporting documents on 23.08.2021. The said reply was submitted pursuant to the communication dated 16.08.2021, whereby time was granted till 20.08.2021 Though the petirioner could not submit the reply within the said time, it was uploaded within three days thereafter. 11. The impugned order repeatedly relers to the show cause notice dated 08.08.2021 and records absence of response from the petitioner. However, the order is conspicuously silent regarding the communication dated 16.08.2021 issued by the Assessing Olficer and the request for extension made by the petitioner on I 8.08.2021. -i.i:-. .,-ffi;

6 This Court is also unable to comprehend how the petitioner coulci upload the reply on 23.08.2021 if the order had indeed been passed on 21.08.2021, after which the portal is expected to lre closed. 12, In the circumstances, the impugned order acpears to have been passed without taking into consideration the reply submitted by the petitioner on 23.08.2021.In the opinion olr.his 6orn,,n.. constitutes a clear violation ol principles of natu:al justice and indicates non-consideration of relevant material on record. 13. For the aforesaid reasons, the impugned assiessment order dated 21.08.2021 is set aside. The matter is remitt,:d back ro the Assessing Officer to pass a fresh order, taking intc, conside.ation the reply submitted by the petitioner on 23.0g.2021. The Assessing Officer shall also afford an opportunity of personal hearing to the petitioner and thereafter pass a reasoned order in accordance with law. 14. Considering that the assessment year pertains to 20lg_19, the Assessing Officer shall pass a fresh order within a period of three (03) months from the date of receipt of a copy of this order. I i I ! i I I I I

1 To 15. Accordingly, this writ petrtron stands allowed. No order as to costs. Consequently, rniscellaneous pctitions pending' il any' shall stand closecl SD/.MOHD. ISMAIL DEPUW REG TRAR //TRUE COPY// SECTION FFlCER SA BS 1. The lncome Tax Officer, National e-Assessm.ent Centre' lncome Tax Department, Ministry oi iln'n"", Room No 4O1 ' 2nd Floor' E-Ramp' Jawaharlal Nehru Stadium, Delhi - 110 003' z inl eiiittunt Commissioner of lncome Tax' Circle - 3(1)' Signature towers' Hvderabad-500004. 3. o;; cci;snin.v.n.srvn KARTIKEYA, Advocate [oPUCl 4. ONE CC tO SMT B.SAPNA HCOOi' SENIOR STANDING COUSNEL FOR INCOME TAX, Advocate [OPUC] 5. Two CD CoPies W

HIGH COURT DATED: 2210412026 ORDER WP.No.22567 ot 2021 ALLOWING THE W.P WITHOUT COSTS. , ..) \I rD .i /. \\. ? ".. .# \. :... 20 flAr 206 I'jrr.,i.l:;?1, oa -; rrl; a.*:: si; xq v^' ;. . l.,i:, \.. , lr' , "4. / t 4

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