MM WONDER PARK PRIVATE LIMITED V. UNION OF INDIA

WPT/95/2023

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The case involves Mm Wonder Park Private Limited, a company registered under the Companies Act, which challenged the notices and orders issued by the Income Tax authorities under various sections of the Income Tax Act, 1961, related to the assessment year 2016-17. The petitioner argued that the show-cause notice issued under Section 148A(b) of the Act provided an unreasonably short time of only 7 days to respond, which was insufficient for a transaction dating back to the financial year 2015-16. The petitioner sought the quashing of the subsequent order and notice, citing a violation of the principle of natural justice. The court, referencing a similar case (W.P.(T) No.172 of 2022), found merit in the petitioner's arguments and ruled in favor of the petitioner.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 735091 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 18-04-2023
• Assessment Year: misc
• Other Referred Cases: W.P.(T) No.172 of 2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AJAY KUMRANI
• Assessee Lawyers: SIDDHARTH DUBEY
• Keywords: Natural Justice; Re-assessment; Show cause notice; Financial year 2015-16
• Section: 148; 148A(b); 148A(d)

Judgement Text

"1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 95 of 2023 Mm Wonder Park Private Limited A Company Registered Under The Companies Act Having Its Registered Office At Village - Bakhtara, Godhi Road Tehsil - Arang, District - Raipur - 492101, Chhattisgargh Through Its Director Shri Rajesh Thourani Aged About 47 Years Son Of Late Shri Mansharam Thourani Resident Of M M 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 Central Circle 1, Raipur, Office Of Assistant Commissioner Of Income Tax, Central Circle 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. 4. Director General Of Income Tax (Investigation) Bhopal, Office Of Director General Of Income Tax (Investigation), Bhopal Aayakar Bhawan, 48, Area Hills, Bhopal - 462011 ---- Respondents For Petitioner : Mr. Siddharth Dubey, Advocate For State-respondent No.2 to 4 : Mr. Ajay Kumrani, Advocate on behalf of Mr. Amit Chaudhari, Advocate 2 Hon'ble Shri Justice Parth Prateem Sahu Order On Board 18/04/2023 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 22.3.2023 (Annexure P1) issued under Section 148A(b) of the Income Tax Act, 1961 (henceforth ‘the Act’), order dated 1.4.2023 (Annexure P2) passed under Section 148A(d) of the Act and subsequent notice dated 01.4.2023 (Annexure P3) issued under Section 148 of the Act. 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 2016-17 (financial year 2015-16). The aforesaid show-cause notice gave just 7 days’ time to the Petitioner to file its reply. The Petitioner could not file reply to the notice as the transaction in question is related to the financial year 2015-16 and the time was short. Thereafter, order dated 1.4.2023 (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 1.4.2023 (Annexure P3). Learned Counsel further submits that giving mere 3 7 days’ time to the Petitioner/assessee to file reply with respect to the transaction which occurred in the financial year 2015-16 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. 4. It is further contended that in W.P.(T) No.172 of 2022, similar grounds was raised by petitioner therein, which was allowed by the Court and quashed the order passed under Section 148A(d) and the notice issued under Section 148 of the Act directing respondents to grant proper opportunity of hearing to petitioner and thereafter to pass appropriate orders. He submits that the order dated 1.4.2023 (Annexure P2) and the notice dated 1.4.2023 (Annexure P3) be quashed and the Respondents be directed to afford proper opportunity of hearing to the Petitioner and thereafter to pass order afresh in accordance with law. 5. Learned Counsel appearing for Respondents No.2 to 4 oppose the above arguments raised on behalf of the Petitioner. 6. I have heard Learned Counsel appearing for the parties and perused the above referred documents/Annexures and other material available. 7. From perusal of the documents/Annexures, it appears that the order dated 1.4.2023 (Annexure P2) passed under Section 148A(d) of the Act has been passed with regard to a transaction which occurred in the financial year 2015-16 after serving a notice dated 22.3.2023 (Annexure P1) and giving mere 7 days’ 4 time to the Petitioner/ assessee to furnish reply to the said notice. The time granted to the Petitioner/assessee to submit reply to the said notice prima-facie 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, there is violation of principle of natural justice. Therefore, the prayer made on behalf of the Petitioner/assessee appears to be reasonable. 8. For the above discussion the order dated 1.4.2023 (Annexure P2) passed under Section 148A(d) of the Act and the notice dated 1.4.2023 (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. 9. Accordingly, the instant writ petition is allowed. 1. 2. Sd/- (Parth Prateem Sahu) Judge Balram "