IMPORTANT POINT
Excess provisions written back do not constitute 'gross receipts' under Section 44AB, thus not necessitating a Tax Audit Report.

ORDER :

Bhargav D. Karia, J.

1. Heard learned advocate Mr. Dhinal Shah for the petitioner and learned advocate Mr. Dev D. Patel for learned Senior Standing Counsel Mr. Varun Patel for the respondents.

2. Rule returnable forthwith. Learned advocate Mr. Patel waives service of notice of Rule for the respondents.

3. Having regard to the controversy in the narrow compass arising in this petition and with the consent of the respective learned advocates appearing for the parties, the matter is taken up for hearing.

4. The brief facts of the case are that the petitioner a Private Limited company registered under the provisions of the Companies Act filed return of income for the Assessment Year 2022-23 declaring total income of loss amounting to Rs.1,84,28,30,407/-.

4.1 It is the case of the petitioner that the petitioner received a notice under Section 139(9) of the Act on 14th December 2022 from the respondent No.1 – Deputy Director of Income Tax, CPC, Bengaluru raising defects namely non-submission of Tax Audit Report under Section 44AB of the Act with the Income Tax Return on the ground that Total Sales, Turnover or Gross Receipts exceed the thresholds specified under the Act i.e. Rs.10,00,00,000/- (Rupees Ten Crore) subject to the conditions specified in proviso to Section 44AB(a) of the Act.

4.2 In response to the aforesaid notice, the petitioner submitted reply on 22nd December 2022 contending that there no turnover or gross receipt exceeding the prescribed limit to get Tax Audit done under section 44AB the Act and other income in the audited accounts includes Rs.4,713.55 Lakh comprising interest of Rs.3.12 Lakh and excess provision of unwinding of discount on NHAI premium written back of Rs.4,710.33 Lakh which is not the revenue from the business operations.

4.3 The petitioner received Order dated 13th December 2023 stating therein that the response filed by the petitioner is not acceptable and the return of income has been deemed invalid in accordance with the provisions of Section 139(9) of the Act.

5. Being aggrieved, the petitioner has preferred this petition with the following prayers :

“B. Your Lordships may be pleased to quash and aside the Defective Order dated 13/12/2023 and 15/12/2023 marked as Annexure – A declaring the return of Income tax filed on 02.11.2022 as invalid by the petitioner along with all the consequential and incidental proceedings,

C. Your Lordships may be pleased to issue a writ of certiorari or in the nature of certiorari or any other appropriate writ, orders or directions to call for the record of proceedings, look into them and be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing the impugned Defective Order dated 13.12.2023 and Defective Order dated 15.12.2023 along with all the incidental proceedings thereby validating the return submitted on 02.11.2022 as the valid return under Section 139 of the Act.”

6. Learned advocate Mr. Dhinal Shah for the petitioner submitted that on perusal of the impugned order dated 13th December 2023 passed under Section 139(9) of the Act, the return of income filed by the petitioner is declared invalid for non-compliance of the provisions of Section 44AB of the Act.

6.1 It was submitted that such an order is without giving any opportunity of hearing and it is without jurisdiction and therefore, the petitioner has preferred this petition under Article 226 of the Constitution of India.

6.2 Learned advocate Mr. Shah invited the attention of this Court to the audited profit and loss account for the year ended on 31st March 2022 appearing at page No.25 (Annexure : “C”) and more particularly Note No.17 (at page : 64) beings Notes to Financial Statements of the paper book, to point out that there was no revenue from operations and other income includes of Rs.4,713.55 Lakh comprising interest of Rs.3.12 Lakh and excess provision of unwinding of discount on NHAI premium written back of Rs.4,710.33 Lakh.

6.3 It was submitted that the responde