Sharanam Square LLP Vs Assessment Unit (Gujarat High Court)
The writ petition before the Gujarat High Court challenged an assessment order dated 26 March 2024 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 for Assessment Year 2022–23. The petitioner contended that the assessment order, which resulted in a tax demand of ₹38,13,93,748, was passed in gross violation of the principles of natural justice as the detailed reply dated 25 March 2024 to the show cause notice had not been considered at all.
The petitioner, engaged in the business of construction and incorporated during the year under consideration, had filed its return of income on 31 July 2022 declaring income of ₹23,200. The case was selected for scrutiny through notice under Section 143(2) dated 1 June 2023, followed by a notice under Section 142(1) dated 9 October 2023 seeking details, which were furnished on 24 October 2023. After a gap of several months, another notice under Section 142(1) dated 10 March 2024 sought further details regarding investments and unsecured loans. Subsequently, by a notice dated 18 March 2024, the compliance date was advanced due to impending limitation. A show cause notice dated 22 March 2024 proposed an addition of ₹39,43,27,000 under Section 69 in respect of property purchased by the petitioner.
