The court reinforced the necessity of considering all submitted evidence in tax assessments, emphasizing the principles of natural justice.

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr. Hardik Vora for the petitioner and learned Senior Standing Counsel Ms. Maithili Mehta for the respondent.

2. Having regard to the controversy involved which is in narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing.

3. Rule returnable forthwith. Learned Senior Standing Counsel Ms. Mehta waives service of notice of rule on behalf of the respondent-State.

4. By this petition under Article 227 of the Constitution of India, the petitioner has prayed for quashing and setting aside the Assessment Order passed under section 144 read with section 144D of the Income Tax Act, 1961 [for short ‘the Act’] for Assessment Year 2023-24 passed on 14.03.2025 making addition of Rs. 20,31,39,614/- without considering the submissions and documentary evidence filed by the petitioner.

5. Brief facts of the case are as under:

5.1 The Petitioner is a Partnership Firm engaged in the business of Import and Export of Agro-products and manufacturing of various types of sesame seeds. It had filed its Return of Income for A.Y. 2023-24 on 09.09.2023 declaring total income at Rs. 31,85,240/-. The return of income was duly processed u/s 143(1) of the Act.

5.2 The case of petitioner-company was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued on 19.06.2024. Thereafter, notices u/s 142(1) of the Act were issued on 30.09.2024 and 06.11.2024 asking the assessee to furnish various details and documents in response to which, the Petitioner filed reply along with supporting documents on 18.11.2024.

5.3 Subsequently, notice u/s 142(1) of the Act was issued on 06.12.2024 asking the assessee-petitioner to furnish documents and clarifications regarding difference in sales and purchases as per books of accounts and GST returns. In response to the same, the petitioner duly submitted a detailed reply on 13.12.2024.

5.4 Thereafter, notices u/s 142(1) of the Act were issued on 26.12.2024 and 11.02.2025 directing the petitioner to clarify certain discrepancies in sales and purchases as compared to the details furnished in the GST returns. Additionally, the respondent contended that while the petitioner had claimed TDS on sales made to parties where individual sales were less than Rs. 50 lakhs, the petitioner had allegedly failed to deduct TDS under Section 194Q of the Act on the purchases amounting to Rs. 60,66,36,517/-. In light of these observations, the petitioner was called upon to provide an explanation, along with documentary evidence, regarding non-deduction of TDS under Section 194Q of the Act on the purchases, particularly in the context of the claimed deduction of TDS on sales of less than Rs. 50 lakhs.

5.5 In response, the petitioner filed a detailed submission on 04.01.2025 and 24.02.2025, providing a comprehensive explanation regarding the discrepancies raised in the notice. With respect to the alleged non-deduction of TDS under Section 194Q of the Act on purchases, the petitioner clarified that TDS was not deducted only on the amount of Rs. 54,17,90,067/-, rather than Rs. 60,66,36,517/- as alleged by the respondent. The petitioner further explained that out of the total purchases of Rs. 54,17,90,067/- on which TDS was not deducted, the breakdown is as follows:

a. Rs. 46,64,01,413/- pertains to import purchases, and since Section 194Q of the Act applies only to resident sellers, TDS was not applicable.

b. Rs. 2,47,90,395/- comprises purchases where the individual transaction value was less than Rs. 50 lakhs, thereby falling outside the purview of TDS deduction under Section 194Q.

c. Rs. 1,84,31,280/- relates to purchases where TCS had already been collected by the sellers, and hence, TDS was not required to be deducted by the Petitioner.

d. Rs. 1,56,19,6