SHREE SARKHEJ KELAVANI MANDAL V. ADDITIONAL/JOINT/DY. ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER & ANR. [2025 (4) TMI 1457]
Background: The Petitioner filed its return of income for the A.Y. 2018-19 om 30.03.2019 declaring Nil Income, claiming exemption under section 11 & 12 of the Income Tax Act. The Petitioner submitted an audit report in Form No. 10 but later found errors and submitted a revised report. The Assessing Officer (AO) denied the exemption under section 11, stating that the Petitioner had violated section 12A by not filing the return and Form No. 10B within the prescribed time limit. The Petitioner requested an adjournment to respond to the Show Cause Notice, but the Assessing Officer passed the final Assessment Order rejecting the request. The petitioner filed the Petition challenging the Assessment Order.
Decision: The court found that the AO action of passing the Assessment Order without considering the Petitioner adjournment request violated the principles of natural justice. The court quashed the Penalty Order and Demand Notice. The Court directed the Income Tax Department to pay costs of Rs. 500 in each petition to The Gujarat High Court Advocates Library. The Court also addressed systemic deficiencies in the Income Tax Department and issued directions for future handling of cases, including the mandatory involvement of the CIT (Judicial) in income tax petitions.
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