Gujarat High Court
Shraddha Developers vs The National Faceless Assessment ... on 7 July, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 1833 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
✔
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SHRADDHA DEVELOPERS
Versus
THE NATIONAL FACELESS ASSESSMENT CENTRE & ANR.
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Appearance:
MR. TUSHAR HEMANI, SR. ADV. WITH MS VAIBHAVI K PARIKH(3238) for
the Petitioner(s) No. 1
KARAN G SANGHANI(7945), SR. STANDING COUNSEL for the
Respondent(s) No. 2
NOTICE SERVED for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 07/07/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Heard learned Senior Advocate Mr. Tushar Hemani with Ms. Vaibhavi K. Parikh for the petitioner and learned Senior Standing Counsel Page 1 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025 NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined Mr. Karan G. Sanghani for the respondents.
2. Rule, returnable forthwith. Learned Senior Standing Counsel Mr.Karan Sanghani waives service of notice of rule for and on behalf of the respondents.
3. Having regard to the controversy involved in this petition, with the consent of the learned advocates for the respective parties, the matter is taken up for final hearing.
4. By this petition under Article 226 of the Constitution of India, the petitioner has challenged and prayed for quashing and setting aside of impugned assessment order issued under Section 147 r.w.s 144 & 144B of the Income Tax Act (for short 'the Act') and demand notice issued under Section 156 of the Act, both dated 26.03.2022 for Assessment Year Page 2 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025 NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined 2013-14.
5. Brief facts of this case are that the:
5.1 Petitioner is a partnership firm. On 29.12.2022, the petitioner received an email from the department regarding an outstanding demand of Rs. 27,26,08,265/- which the petitioner was directed to pay within a period of 7 (seven) days from service. Subsequently upon checking the Income Tax Portal, the petitioner found that an assessment order, three penalty orders and various notices were uploaded by the department which are as follows:
➤ Assessment Order dated 26.03.2022 under section 147 r.w.s. 144 r.w.s. 144B of the Act pursuant to which, demand of Rs. 20,64,07,097/- has arisen;
Page 3 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025
NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined ➤ Penalty order dated 26.09.2022 whereby penalty of Rs.6,61,56,165/- has been levied under section 271(1)(c) of the Act; ➤ Penalty order dated 21.09.2022 whereby penalty of Rs.40,000/- has been levied under section 271(1)(b) of the Act; ➤ Penalty order dated 15.09.2022 whereby penalty of Rs.5,000/- has been levied by the revenue under section 271F of the Act; 5.2 The petitioner, vide letter dated 03.01.2023, furnished reply against the aforesaid recovery notice. However, it is the case of the petitioner that the department has passed the above orders for the year under consideration in gross violation of principles of natural justice as no notice was ever served upon the petitioner herein prior to Page 4 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025 NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined passing such orders and no opportunity of being heard was provided to the petitioners. 5.3 It is the case of the petitioner that the recovery notice was sent on the email ID [email protected] which was used by the petitioner while filing return of income for AY 2012-13. Whereas the jurisdictional notice dated 31.03.2021 issued under Section 148 of the Act was neither addressed nor communicated to anybody. However, various other notices including penalty proceedings under Sections 271F, 271(1)(b) and 271(1)(c) which were uploaded on the income tax portal were sent via email at [email protected], which neither belongs to the petitioner nor to any of its employees, partners or auditors. Thus, amongst all the notices, assessment proceedings and penalty proceedings only the Page 5 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025 NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined recovery notice dated 29.12.2022 was correctly served to the petitioner.
6. Being aggrieved by the same, the petitioner has preferred the present petition.
7. Learned Senior Advocate Mr. Tushar Hemani with Ms. Vaibhavi K. Parikh for the petitioner submitted that the impugned assessment order under Section 147 of the Act is in gross violation of principles of natural justice as no opportunity of being heard was provided to the petitioner. It was further submitted that personal hearing is necessary in such cases before passing adverse orders.
8. Learned senior advocate for the petitioner submitted that the respondent has made addition of Rs. 21,40,97,624/- in respect of total sales value of the immovable property. Page 6 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025
NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined However, even on merits such amount is incorrect since the petitioner had already completed the project on 31.03.2012 and sold all the units there in during assessment year 2012-13, which was the preceding year then the year in consideration in the present petition. Also, the sale deeds which were executed subsequent to 31.03.2012 in any case do not amount to Rs. 21,40,97,624/-.
9. Per Contra, learned senior standing counsel Mr. Karan G. Sanghani for the respondents submitted that the petitioner could file an appeal before the Appellate Authority as per the provisions of section 249 of the Act. The petitioner assessee could file appeal u/s 249 whenever such order or notice is received. As per section 249 (2) of the Act, an appeal can be filed within 30 days from the receipt of Page 7 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025 NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined such order/notices. Thus, alternative efficacious remedy is available with the petitioner.
10. Learned Senior Standing Counsel for the respondent submitted that ample opportunities were provided to the petitioner via the e- filing portal before passing the impugned assessment order and it is an admitted fact by the petitioner that the notices and other communications were received on the e-filing portal. Thus, the petitioner could have replied to the same on the e-filing portal.
11. Learned Senior Standing Counsel for the respondent places reliance on Section 144B of the Act which provides for serving of notices and orders to the assessee on the email address available on the ITBA system. Page 8 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025
NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined
12. Learned Senior Standing Counsel for the respondent further submitted that the petitioner challenged the notice u/s 148 issued for the AY 2013-14 and subsequent communications and the Assessment Order dated 26.03.2022 for the AY 2013-14 stating that the e-mail id to which the notice was sent doesn't belong to petitioner. On verification of records of the assessee, it is observed that another notice under section 148 of the Act was sent to the petitioner for the AY 2018-19 dated 31.03.2022 to the same e-mail id and petitioner complied to the notice by filing its ITR in response to the said notice. Therefore, claim of the petitioner that communication wasn't received since it was sent to wrong e mail ID is not tenable.
13. Having heard learned advocates for the parties and perused the material on record, Page 9 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025 NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined certain facts are not in dispute. It is not in dispute that notice under Section 148 of the Act on 31.3.2022 was sent on email:[email protected]. Letter under Section 142(1) of the Act was sent on 18.10.2022 for the Assessment Year 2018-19 on [email protected]. It was at this time that the petitioner realised about the proceedings under Section 147 of the Act. Only when a notice was sent on 18.10.022 at the correct email ID of the petitioner, the proceedings were known to the petitioner. This factual aspect and controversy is not disputed by learned Senior Standing Counsel Mr. Karan Sanghani. Therefore, it is fundamental proposition of law that the other side should be heard before any order is passed. The maxim of Audi Alteram Partem is broad enough to include the rule against bias since a fair Page 10 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025 NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined hearing is must for it to be unbiased hearing. The essential ingredients of fair hearing is that a person should be served with a proper notice. That the person has to have right of a proper notice.
14. In the instance case, it is not disputed that notice under Section 148 of the Act on 31.3.2022 was sent on a wrong email address and, therefore, the petitioner was not in a position to controvert the same. In view of the same, the impugned assessment order passed by the respondent in case of the petitioner dated 26.3.2022 under Section 147 read with Section 144B of the Act for the Assessment Year 2013-14 is not tenable and is required to be quashed and set-aside and is accordingly quashed and set-aside.
15. In view of the same, the notice issued Page 11 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025 NEUTRAL CITATION C/SCA/1833/2023 JUDGMENT DATED: 07/07/2025 undefined under Section 156 of the Act dated 26.3.2022 is also required to be quashed and set-aside. The present petition is hereby allowed with no order as to costs.
(BHARGAV D. KARIA, J) (PRANAV TRIVEDI,J) SAJ GEORGE Page 12 of 12 Uploaded by SAJ GEORGE(HC01069) on Wed Jul 09 2025 Downloaded on : Wed Jul 09 21:49:11 IST 2025