Case Law Details
Imperial Shipping Service Vs Assessment Unit (Madras High Court)
The Madras High Court recently delivered a significant judgment regarding an Income Tax assessment order challenged on grounds of breaching principles of natural justice. The case pertains to Imperial Shipping Service versus the Assessment Unit.
The petitioner filed their income tax return for the assessment year 2022-23, declaring an income of Rs. 1,19,06,850/-. Subsequently, notices were issued under Section 143(2) and Section 142(1), initiating scrutiny. The crux of the matter lies in a show cause notice dated 19.03.2024, proposing a variation in the petitioner’s GSTR 1 statement. Despite the petitioner’s request for further time, only a day’s extension was granted. Within this limited timeframe, the petitioner responded and provided relevant documentation.
However, the assessment order issued by the Income Tax Department treated the entire expenses of Rs. 16,20,67,647/- as unexplained expenditure, citing the petitioner’s failure to provide invoices and income statements. The petitioner argued that the lack of reasonable time for submission constituted a breach of natural justice.
The High Court examined the sequence of events and concluded that the petitioner was not afforded adequate time for response. As the limitation period was nearing its end, further opportunities were denied, resulting in the confirmation of the proposed variation without due process.
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