The absence of reasons in administrative orders violates natural justice, necessitating adherence to fair play and the exhaustion of alternate remedies before judicial intervention.

JUDGMENT :

M. S. Sonak, J.

1. Heard learned counsel for the parties.

2. Rule. The rule is returnable immediately at the request and with the consent of the learned counsel for the parties.

3. The Petitioner challenges the order dated 13 December 2023 (Exhibit-C) passed under Section 139(9) of the Income Tax Act, 1961 (“IT Act”), declaring the Petitioner’s return as invalid. Though the impugned order contains no reasons, the Respondent’s reply states that the Petitioner’s return was declared invalid for non-filing a compulsory audit report under Section 44AB of the IT Act.

4. The brief facts in which this challenge arises need to be mentioned. This petition concerns Assessment Year 2022-23, for which the Petitioner filed its income tax return on the department’s portal on 27 July 2022. On 14 December 2022, the Petitioner received a notice, possibly generated by the CPC/Portal, raising defects in the return. This notice stated that the taxpayer, i.e. the Petitioner, had claimed gross receipt or income under the head “Profits and Gains of Business or Profession” of more than Rs.10 Crore, exceeding the threshold limit under Section 44AB of the IT Act. However, no tax audit report was filed as required under Section 44AB of the IT Act.

5. The Petitioner responded to the defects notice by pointing out that it had claimed gross receipts or income under the head of “Profits and Gains of Business or Profession” amounting to Rs.6.15 crores only, which was much less than the threshold limit of Rs.10 crores. Hence, the Petitioner submitted that there was no requirement to obtain and e-file a tax audit report.

6. The Petitioner heard nothing further in the matter for quite some time. Therefore, by communications dated 14 August 2023 and 22 August 2023, the Petitioner raised its grievances through the department’s online grievance portal, requesting that its return be processed and refund, as permissible under the law, be granted.

7. The Petitioner’s case is that the Respondents, by completely ignoring the Petitioner’s plea and reasoning vide the impugned order dated 13 December 2023, declared the Petitioner’s return invalid. There was no compliance with the principles of natural justice, and the impugned order was entirely non-speaking. Hence, this Petition.

8. Mr. Shah, the learned counsel for the Petitioner, submitted that the impugned order is computer generated or made by the CPC without any application of mind or considering the cause shown by the Petitioner. He submitted that the impugned order contains no reasons whatsoever. He submitted that all this vitiates the impugned order for violating the principles of natural justice and fair play.

9. Mr. Shah submitted that the gross turnover or receipts under the head “Profits and Gains of Business or Profession” were only Rs.6.15 crores, which was less than the threshold limit of Rs10 Crores prescribed under Section 44AB. Therefore, there was no requirement for any tax audit, and this crucial aspect was not even considered before making the impugned order.

10. Mr. Shah submitted that the tax returns and the documents accompanying the tax returns declare income of Rs.16.82 crores, which arises from liabilities no longer required to be written back at Note 19 of such statements. He submitted that these receipts do not amount to Total Sales, Turnover or Gross Receipts of the Business. He relied on Guidance Note on Tax Audit under Section 44AB (Revised 2023) issued by ICAI. He submitted that the accounts were prepared in terms of these Guidance Notes and should have been accepted by the Respondents.

11. Mr. Shah submitted that the ICAI Guidance Note could be relied upon, and adjustments for discounts, write-backs, or other non-operational receipts should not be considered in the turnover for audit requirements. He relied on M/s. Rohtak Panipat Tollway Private Limited vs. Dputy Director of Income Tax, CPC and Anr., SCA/5727/2024 in support of his arguments.

12. Mr. Shah submitted that the Guidance Notes i