Case Law Details
Nitin Life Sciences Limited Vs PCIT & another (Himachal Pradesh High Court)
In the case of Nitin Life Sciences Limited vs. Principal Commissioner of Income Tax (PCIT) & Another, the Himachal Pradesh High Court addressed the issue of an unreasoned order and notice of reassessment issued by the tax authorities. The petitioner, Nitin Life Sciences Limited, challenged the order dated April 13, 2023, and the accompanying notice which concluded that an amount of ₹2,73,28,43,663 had escaped assessment for the Assessment Year 2019-2020. The notice required the petitioner to undergo assessment or reassessment of the stated income within 30 days of receiving the notice.
The petitioner submitted a copy of the notice served upon them (Annexure P-4) along with their response and supporting documents (Annexure P-5). Additionally, an extra reply dated April 3, 2023 (Annexure P-6), was also presented by the petitioner. The core grievance of the petitioner was that despite providing detailed responses and documents, which demonstrated that the income/transactions in question were already accounted for in their financial records, the tax authorities did not consider these materials. The supplementary reply was also reportedly ignored.
The respondents, representing the tax authorities, contended that the petitioner’s reply had been considered, as mentioned in the impugned order. They further claimed that the supplementary reply dated April 3, 2023, was not received by the concerned authority. However, upon examining the impugned order (Annexure P-7), it was evident that there was no reference to the specific replies and documents submitted by the petitioner. Furthermore, there was no consideration of the supplementary reply dated April 3, 2023.
The court observed that the respondents’ plea that the supplementary reply was not received was contradicted by their own document (Annexure R-1), which listed the receipt of the supplementary reply from the petitioner on April 3, 2023. This established that the concerned authority had indeed received the supplementary reply but failed to take it into account.
The High Court noted that the tax authority’s decision-making process lacked a reasoned and speaking order. It underscored that the authority did not provide any rationale for concluding that the stated amount had escaped assessment. The absence of consideration of the detailed replies and documents submitted by the petitioner rendered the order and notice legally unsound.
Consequently, the High Court quashed the order dated April 13, 2023, and the accompanying notice. The court directed the concerned tax authority to reassess the matter afresh, taking into account the petitioner’s initial reply, supplementary reply, and all supporting documents. The court emphasized the need for the tax authority to pass a speaking and reasoned order, providing clear justification for their conclusions. Additionally, the court instructed that the petitioner should be afforded an opportunity for a personal hearing if they so desired. The tax authority was ordered to communicate the decision to the petitioner promptly after reassessment.
FULL TEXT OF THE JUDGMENT/ORDER OF HIMACHAL PRADESH HIGH COURT
Petitioner has assailed order dated 13.04.2023 (Annexure P-7) and notice dated 13.04.2023 (Annexure P-8) whereby it has been concluded that income/transactions of the petitioner to the extent of `2,73,28,43,663/- has escaped assessment in the Assessment Year 2019-2020 and notice has been issued for assessment/reassessment of such income within 30 days of the service of the notice.
2. Alongwith petition, petitioner has placed on record copy of notice served upon him as Annexure P-4. Response thereto alongwith annexure submitted on behalf of the petitioner has also been placed on record as Annexure P-5. An additional reply stated to have been filed by petitioner on 03.04.2023 has also been placed on record as Annexure P-6.
3. Main grievance of the petitioner is that details furnished along with reply (Annexure P-5), indicating that income/transactions shown in notice Annexure P-4 have already been accounted for in the Books of Account of the Company including profit and loss account and Balance Sheet, have not been taken into consideration by the respondent-authority and supplementary reply (Annexure P-6) filed on 03.04.2023 has also not been considered.
4. Learned counsel for the respondents has contended that reply of the assessee has been considered as reflected in the impugned order itself and, further that, supplementary reply stated to have been filed on 03.04.2023 has not been received by the concerned authority.
5. Perusal of the impugned order Annexure P-7 indicates that though it has been recorded in it that reply of the assessee has been considered, but there is no reference with respect to reply and documents filed by the petitioner and there is no consideration with respect to supplementary/additional reply filed by the petitioner on 03.04.2023.
6. So far as plea of the respondents that supplementary reply filed by the petitioner on 03.04.2023 was not received by the concerned authority, is falsified from the document (Annexure R-1) filed by the respondents themselves with their reply wherein at Sl.No.13 it has been clearly reflected that on 03.04.2023 reply from the assessee was filed.
7. In aforesaid facts and circumstances, it is apparently clear that concerned authority has neither considered reply filed alongwith documents nor supplementary reply filed on 03.04.2023 by the petitioner. There is no speaking order assigning reason for conclusion arrived at that income/transactions to the extent of `2,73,28,43,663/- has escaped assessment in the Assessment Year 2019-2020.
8. In view of above discussion, order dated 13.04.2023 (Annexure P-7) and notice dated 13.04.2023 (Annexure P-8) are quashed and set aside and matter is relegated to the concerned authority for deciding afresh by taking into consideration reply as well as supplementary reply alongwith documents filed therewith, by passing a speaking and reasoned order, after affording opportunity of personal hearing to the petitioner, if desired so. Order shall be communicated to the petitioner immediately thereafter.
9. Petition is disposed of in aforesaid terms, so also pending application(s), if any.
Notes:
1 Whether reporters of the local papers may be allowed to see the judgment?
Author Bio
