Tamil Nadu Viswakarma Mutual Benefit Nidhi Limited Vs ACIT (Madras High Court)
In the case of Tamil Nadu Viswakarma Mutual Benefit Nidhi Limited versus ACIT, the Madras High Court examined the repercussions of inadequate responses to notices issued by the Income Tax department.
The petitioner, a financial company, received multiple notices from the Income Tax department regarding its returns. However, it failed to provide satisfactory responses, leading the Assessing Officer to pass an adverse order due to the perceived lack of cooperation.
The Madras High Court noted the importance of proper communication between taxpayers and tax authorities. In this case, the failure to furnish relevant documents within the stipulated period resulted in adverse inference and an unfavorable order.
Recognizing the petitioner’s right to present its case, the High Court remitted the matter back to the Assessing Officer. It directed the petitioner to provide a comprehensive reply to the show cause notice and instructed the respondent to reconsider the case within a specified timeframe.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mr. N. Dilip Kumar, learned Standing Counsel takes notice for the respondent.
2. The petitioner is a Financial Company, who has business of receiving deposits from the depositors and lending of amounts to its depositors on interest. The petitioner had filed regular return of income under Section 139 of Income Tax Act, 1961 on 18.10.2022. Thereafter, the petitioner was issued with a show cause notice dated 18.03.2024. The above notice preceded the notices under Section 142(3) of the Income Tax Act, 1961 on 03.11.2023 followed by a notice dated 02.06.2023 and thereafter, two notices under Section 142(1) of the Income Tax Act, 1961 on 27.10.2023 and on 03.11.2023.
