MM Wonder Park Private Limited Vs Union of India (Chhattisgarh High Court)
In the case of MM Wonder Park Private Limited vs Union of India, the Chhattisgarh High Court addressed a writ petition filed by the petitioner challenging reassessment proceedings initiated by the Income Tax Department. The reassessment was based on a notice issued under Section 148A(b) of the Income Tax Act, 1961, concerning the assessment year 2015-16. The petitioner, a private limited company engaged in the hospitality sector, argued that it was given only seven days to respond to a show-cause notice regarding transactions that took place in the financial year 2014-15. The petitioner contended that this limited time was insufficient to gather and present a meaningful response, especially considering the age of the transactions. Further, the petitioner claimed that statutory procedures under Section 148A(a), including prior approval from a specified authority before initiating an inquiry, had not been followed.
The Court examined the sequence of notices and orders issued by the Income Tax Department: the notice under Section 148A(b) on 25.03.2022, the order under Section 148A(d) on 04.04.2022, and the reassessment notice under Section 148 on 05.04.2022. After reviewing the submissions and records, the Court concluded that granting only seven days to respond was unreasonably short and amounted to a violation of the principles of natural justice. The Court held that the assessee could not be faulted for failing to respond adequately within the constrained timeframe. Observing procedural irregularities and the lack of opportunity for the petitioner to present its case, the Court ruled in favor of the petitioner.
