MM WONDER PARK PRIVATE LIMITED V. UNION OF INDIA

WPT/172/2022

AI Insights

The case involves MM Wonder Park Private Limited, a company engaged in the hospitality industry, which challenged the notices and orders issued for re-assessment of the assessment year 2015-16. The petitioner argued that the notices provided an unreasonably short time to respond, violating the principles of natural justice. Additionally, the petitioner contended that the necessary prior approvals for the re-assessment were not obtained as required under Section 148A of the Income Tax Act, 1961. The respondents opposed the petition, but the court found merit in the petitioner's arguments, leading to the quashing of the impugned order and notice.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 685940 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 17-06-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SUMIT SINGH; AJAY KUMRANI
• Assessee Lawyers: SIDDHARTH DUBEY
• Keywords: Income chargeable to tax escaped assessment; Natural Justice; Re-assessment
• Section: 148; 148A(b); 148A(d)

Judgement Text

"NAFR HIGH COURT OF CHHATTISGARH, BILASPUR Writ Petition (T) No.172 of 2022 MM Wonder Park Private Limited, a company registered under the Companies Act having its registered office at Village Bakhtara, Godhi Road, Tahsil Arang, District Raipur, 492101, Chhattisgarh through its Director, Shri Rajesh Thourani, aged about 46 years, son of Late Shri Mansharam Thourani, Resident of MM Niwas, 6 Bungalow, Godriwala City, Baba Gelaram Nagar, Opposite Godriwala Dham, Deopuri, Raipur, Chhattisgarh, 492015 ---- Petitioner versus 1. Union of India through Secretary Ministry of Finance, Department of Revenue, North Block, New Delhi, 110001, India 2. Assistant Commissioner of Income Tax, Circle 1(1), Raipur, Office of Assistant Commissioner of Income Tax, Circle 1(1), Raipur, Central Revenue Building Civil Lines, Raipur, Chhattisgarh, 492001, India 3. Chief Commissioner of Income Tax, Raipur, Office of Chief Commissioner of Income Tax, Raipur, Central Revenue Building, Civil Lines, Raipur, Chhattisgarh, 492001, India --- Respondents ------------------------------------------------------------------------------------------------------- For Petitioner : Shri Siddharth Dubey, Advocate For Respondent No.1 : Shri Sumit Singh, Advocate For Respondents No.2&3 : Shri Ajay Kumrani, Advocate on behalf of Shri Amit Chaudhary, Advocate ------------------------------------------------------------------------------------------------------- Hon'ble Shri Justice Arvind Singh Chandel Order on Board 17.6.2022 1. With the consent of Learned Counsel appearing for the parties, the matter is heard finally. 2. The instant petition has been preferred by the Petitioner being aggrieved by the notice dated 25.3.2022 (Annexure P1) issued under Section 148A(b) of the Income Tax Act, 1961 (henceforth ‘the Act), order dated 4.4.2022 (Annexure P2) passed under Section 148A(d) of the Act and notice dated 5.4.2022 (Annexure P3) issued under Section 148 of the Act. 2 3. It is submitted by Learned Counsel appearing for the Petitioner that the Petitioner is a private limited company registered under the Companies Act involved in rendering services in various sectors of hospitality industry. The Petitioner was issued a show-cause notice under Section 148A(b) of the Act as per Annexure P1 as to why re- assessment proceeding should not be initiated in case of the Petitioner for assessment year 2015-16 (financial year 2014-15). The aforesaid show-cause notice gave just 7 days’ time to the Petitioner to file its reply. The Petitioner was unable to file reply to the notice as the transaction in question related to the financial year 2014-15 and the time was short. Thereafter, order dated 4.4.2022 (Annexure P2) was passed under Section 148A(d) of the Act and a notice was issued under Section 148 of the Act initiating re- assessment proceeding on 5.4.2022 (Annexure P3). Learned Counsel further submits that giving mere 7 days’ time to the Petitioner/assessee to file reply with respect to the transaction which occurred in the financial year 2014-15 is unreasonable short and the assessee cannot be blamed for not being able to file reply within such a short period. There is a violation of the principle of natural justice. Learned Counsel further submits that if any inquiry is to be conducted with respect to the information which suggests that the income chargeable to tax has escaped assessment, the same is to be done under Section 148A(a) of the Act by seeking prior approval of the specified authority which has not been done in the present case. Furthermore, a separate approval from the specified authority had to be obtained by Respondent No.2 as per Section 148A of the Act before issuance/passing of the notice/order 3 under Section 148A(b), Section 148A(d) and Section 148 of the Act in the present case, but the same has not been done. Therefore, it is prayed by the Learned Counsel that the order dated 4.4.2022 (Annexure P2) and the notice dated 5.4.2022 (Annexure P3) be quashed and the Respondents be directed to afford proper opportunity of hearing to the Petitioner and thereafter decide the matter afresh in accordance with law. 4. Learned Counsel appearing for Respondent No.1 and Learned Counsel appearing for Respondents No.2 and 3 oppose the above arguments raised on behalf of the Petitioner. 5. I have heard Learned Counsel appearing for the parties and perused the above referred to documents/Annexures and other material available with due care. 6. From perusal of the documents/Annexures, it appears that the order dated 4.4.2022 (Annexure P2) passed under Section 148A(d) of the Act has been passed with regard to a transaction which occurred in the financial year 2014-15 after serving a notice dated 25.3.2022 (Annexure P1) and giving a mere 7 days’ time to the Petitioner/assessee to furnish a reply to the said notice. The time granted to the Petitioner/assessee to submit reply to the said notice appears to be unreasonable short and the Petitioner/assessee cannot be blamed for not being able to file the reply within such a short period. Thus, it appears that there is a violation of principle of natural justice. Therefore, the prayer made on behalf of the Petitioner/assessee appears to be reasonable. Thus, the order dated 4.4.2022 (Annexure P2) passed under Section 148A(d) of the 4 Act and the notice dated 5.4.2022 (Annexure P3) issued under Section 148 of the Act are quashed and the Respondents are directed to afford proper opportunity of hearing to the Petitioner/assessee and thereafter decide the matter afresh in accordance with law. 7. Accordingly, the instant writ petition is allowed. Sd/- (Arvind Singh Chandel) JUDGE Gopal "