TPL – HGIEPL Joint Venture Vs Union of India (Bombay High Court)
Bombay HC on AI-generated order by the CPC or the computer portal – Return was declared invalid for non-filing a compulsory audit report u/s 44AB
Bombay High Court recently addressed a petition filed by TPL – HGIEPL Joint Venture challenging an order issued by the Centralized Processing Centre (CPC) of the Income Tax Department. The order, generated by an artificial intelligence (AI) system, declared the petitioner’s income tax return for the Assessment Year 2022-23 as invalid. The reason cited for the invalidation was the alleged non-filing of a compulsory audit report under Section 44AB of the Income Tax Act, 1961, based on the premise that the petitioner’s turnover exceeded ₹10 crores.
The petitioner contested this, asserting that its gross receipts from business amounted to only ₹6.15 crores, falling below the threshold requiring a tax audit. Despite the petitioner’s explanation provided in response to an earlier defects notice, the CPC issued an order on December 13, 2023, declaring the return invalid. Crucially, this AI-generated order lacked any reasoning, simply stating that the petitioner’s response was “not acceptable.” Aggrieved by this decision, the petitioner approached the Bombay High Court, arguing that the CPC’s order violated the fundamental principles of natural justice due to the absence of reasons and indicated a mechanical application of AI without human consideration.
