ORAL JUDGMENT

(PER : HONOURABLE MS. JUSTICE NISHA M. THAKORE)

1. The writ applicant has invoked extraordinary writ jurisdiction of this Court under Article 226 of the Constitution of India and has thereby prayed for the following reliefs:

“7(A)The Hon’ble Court may be pleased to quash and set aside the impugned assessment order dated 07.04.2021 and consequent proceedings / notices;

(B)Pending the hearing and final disposal of this application, this Hon’ble Court be pleased to stay the implementation of assessment order dated 07.04.2021;

(C)This Hon’ble Court may be pleased to grant any further or other relief as this Hon’ble Court deems just and proper in the interest of justice;

(D)The Hon’ble Court may be pleased to quash and set aside demand notice u/s. 156 and initiation of penalty proceedings u/s. 270A, consequent to assessment order dated 07/04/2021.”

2. The facts in brief giving rise to this writ application are summarized as under:

2.1 The writ applicant is a Cooperative Society registered under the Gujarat State Cooperative Societies Act, 1960. The writ applicant Society is engaged in the business of providing Credit facility to its members and collecting deposit from its members for the purpose of lending finance. The writ applicant society also make investments in Scheduled Bank and other Cooperative Bank.

2.2 The writ applicant Society is thus assessed as ‘Association of Persons’ and claimed to have filed return of income accordingly. The writ applicant had filed its return of income for annual A.Y. 2018-19 on 09.09.2018 declaring total income of Rs.44,79,940/-. The assessee had claimed refund of Rs.2,62,830/- in the return of of income.

2.3 The respondent had selected the case of the writ applicant for limited scrutiny vide notice dated 22.09.2019 under Section 143(2) of the Act. Thereafter, the respondent had issued further notice under Section 142(1) of the Act on 13.11.2020 calling for various information and clarifications, more particularly, with regard to the deduction under Section 80P of the Income Tax Act.

2.4 It is the case of the writ applicant that the respondent had not issued any show cause notice seeking clarifications as regards the claim of deduction under Section 80P(2)(a)(i) of Rs.2,08,05,240/- to be disallowed and further to be treated as income from other source.

2.5 In absence of such opportunity and without providing draft assessment order, the respondent Authority straightway passed the assessment order on 07.04.2021, whereby the Assessing Officer disallowed the claim of deduction under Section 80P(2)(a) (i) and had treated an amount of Rs.2,08,05,240/- as an income from other source.

2.6 In such circumstances, the writ applicant being aggrieved has approached this Court seeking relief as prayed for.

3. The principal ground pressed by the writ applicant is with regard to non-compliance of provisions, more particularly, Section 144B(xiv), Section 144B(xvi)(b) and Section 144B(xxii) of the Act. The assessment order impugned is passed without issuing notice cum draft assessment order upon the writ applicant.

4. Mr. Jaimin Gandhi, learned advocate appearing for the writ applicant has taken us through the impugned assessment order and has emphasized on the aforesaid provisions. Mr. Gandhi has drawn attention of this Court to the notice dated 22.09.2019 issued under Section 143(2) of the Act read with Rule 12E of Rules framed thereunder and has submitted that the Assessing Officer mainly raised three issues which include deduction under Section 80P. He further drew attention of this Court to the fact that no clarification was sought for regarding disallowance of deduction under Section 80P(2)(a)(i) of the Act. He further relied upon contents of notice dated 13.11.2020 issued under Section 142(1) of the Act whereby the writ applicant was called upon to submit response by 27.01.2020. He submitted that necessary details were furnished along with explanation by way of reply dated 25.11.2020 which was uploaded on