Case Law Details
Shopping Zone India Pvt. Ltd., Vs Additional/Joint/Deputy/Assistant Commissioner of Income Tax (Madras High Court)
The Madras High Court, in a recent decision, set aside an assessment order issued to Shopping Zone India Pvt. Ltd. The court found that the opportunity provided to the petitioner was not realistic, leading to a violation of principles of natural justice. This article delves into the case’s background, the court’s analysis, and the implications of the decision.
1. Background of the Case: The petitioner, a Private Limited Company engaged in marketing consumer products through television shopping, challenged the notice under Section 148 dated 31.03.2021, reopening the assessment for AY 2015-16. The subsequent assessment order dated 30.03.2022 triggered the Writ Petition.
2. Lack of Realistic Opportunity: The petitioner argued that the show cause notice provided only two days to file a reply, and a video conferencing hearing, lasting a mere six minutes, took place on the very day of filing. The court emphasized that a fair opportunity must be realistic, citing a recent decision in M/s. Gemini Film Circuit Vs. Additional/Joint/Deputy/Assistant Commissioner of Income Tax, which established a minimum of 21 days for effective communication.
3. Violation of Natural Justice: Referring to its recent decision, the court concluded that the petitioner’s opportunity was nominal and an empty formality. The violation of natural justice was evident as the petitioner was unable to present their case effectively within the short span between the show cause notice and the assessment order.
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