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2025 Supreme(Online)(Cal) 2576
CALCUTTA HIGH COURT
RAJA BASU CHOWDHURY, J
DREAMZ VANIJYA PRIVATE LIMITED – Appellant
Versus
UNION OF INDIA – Respondent
CONSTITUTIONAL WRIT, WPO NO.355 OF 2025
For the Appellants/Petitioners: Mr. Subash Agarwal, Adv., Mr. Rajarshi Chatterjee, Adv., Mrs. Suman Sahani, Adv., Mr. Amit Shaw, Adv.
For the Respondents: Mr. Amit Sharma, Adv., Mr. Abhishek Kumar Agrahari, Adv.
Assessment orders must afford adequate opportunity for response to variations proposed, failing which such orders may be set aside.
Headnote:(A) Income Tax Act, 1961 - Section 147, 254 - Assessment order challenged for lack of adequate opportunity for response before issuance - The petitioner was not given a fair chance to respond to the proposed variation, as demonstrated by the quick demand raised prior to circulating the draft assessment order. (Paras 1, 3, 6)
(B) Tribunal's Direction - Importance of providing sufficient time for response in assessments as directed by the Appellate Tribunal must be adhered to, ensuring that the assessing officer is open-minded. (Paras 6)
Facts of the case:
The petitioner challenged the assessment order citing insufficient time to respond and prior demands raised improperly before draft orders were circulated.
Findings of Court:
The court set aside the assessment order for lack of opportunity and remanded the matter for fresh consideration by a new assessing officer.
Issues: Centrally addressed issues included the adequacy of the opportunity provided to the petitioner during the assessment process.
Ratio Decidendi: The court ruled that failing to consider the petitioner's response indicated a closed mind on the part of the assessing officer, necessitating a remand for a fair decision.
Result: The assessment order dated 31st March, 2025 was set aside and remanded.
| Table of Content |
|---|
| 1. importance of adequate opportunity in tax assessment. (Para 1 , 3) |
| 2. arguments regarding the context of response times. (Para 4 , 5) |
| 3. court's direction for remand due to unfair process. (Para 6) |
| 4. final decision to dispose based on previous findings. (Para 7) |
Heard on : 3.07.2025 Judgment on : 3rd July, 2025 RAJA BASU CHOWDHURY, J:
1. The petitioner seeks to challenge the assessment order dated 31st March, 2025 passed under Section 147 read with Section 254 of the Income Tax Act, 1961 (hereinafter referred to as ‘the said Act’) for the assessment year 2011-12 on the ground that the said assessment order was passed without affording appropriate opportunity to the petitioner to respond to the proposed variation and without considering the response filed by the petitioner.
2. Records would reveal that challenging the previous assessment order dated 17th December, 2018 in respect of the self-same assessment year, an appeal was filed before the Commissioner of Income Tax (Appeal). Such appeal was disposed of by an order dated 31st March, 2022. Being aggrieved, the petitioner had approached the Income Tax Appellate Tribunal, Kolkata. By an order dated 8th February, 2024, the Appellate Tribunal taking note of the case made out by the petitioner was of the view that the petitioner should be provided with one more opportunity to submit all details and, accordingly, while setting aside the assessment order as also the order passed by the Commissioner of Income Tax (Appeals) dated 31st March, 2022, restored the assessment proceeding to the file of the assessment officer for re-adjudication with a specific direction that the assessing officer shall grant sufficient time to the assessee for submitting requisite details and also commence investigation, if any, well in advance.
3. Pursuant to the above, a notice under Section 142(1) of the said Act was issued on 8th January, 2025. In furtherance to the above, on 13th January, 2025, the petitioner had submitted its response and disclosed additional documents. Subsequently on 21st March, 2025, a further notice under Section 142(1) of the said Act was issued calling upon the petitioner to produce all documents on or before 24th March, 2025. On the following date, the petitioner had sought for an adjournment and, accordingly, the petitioner was allowed time to submit reply till 27th March, 2025. In furtherance to the same, on 27th March, 2025, the petitioner had submitted several documents whereupon the Assessing Officer had circulated the draft assessment order to the assessee by notice dated 29th March, 2025 and called upon the petitioner to respond to the same on the following day at 6:00 P.M. According to the petitioner, the following day was a Sunday. The aforesaid time offered to the petitioner was not adequate for the petitioner to respond. Notwithstanding the above, the petitioner had duly responded to the same on the following working day being a Monday i.e. on 31st March, 2025. The Assessing Officer without considering such response had passed the assessment order on 31st March, 2025 by recording that the petitioner had not offered any response to the proposed variation.
4. Mr. Agarwal, learned Advocate representing the petitioner has brought to the notice of the Court that a demand for a sum of Rs.38,79,98,944/- has been generated and raised on 28th March, 2025 even prior to the Assessing Officer circulating the draft order proposing variations. According to Mr.
Agarwal, the order stands vitiated on such ground and should be set aside.
5. Mr. Sharma, learned Advocate representing the department acknowledges the facts that though the demand was raised, the same was not by the Assessing officer. On the issue of short time provided for affording response to the proposed variation, he would submit that considering the fact that the time to conclude the proceedings was till 31st March, 2025, a short period was offered. There is no irregularity in affording such short perio
