Gujarat High Court
Tatvartha Health Private Ltd vs The Assessment Unit, Income Tax ... on 6 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/6741/2024 JUDGMENT DATED: 06/10/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 6741 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting No Yes
✔
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TATVARTHA HEALTH PRIVATE LTD
Versus
THE ASSESSMENT UNIT, INCOME TAX DEPARTMENT
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Appearance:
DARSHAN R PATEL(8486) for the Petitioner(s) No. 1
KARAN G SANGHANI(7945) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 06/10/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Heard learned advocate Mr. Darshan Patel for the petitioner and learned Senior Standing Counsel Mr. Karan Sanghani for the respondents.
2. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule on Page 1 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Mon Oct 13 2025 Downloaded on : Mon Oct 13 21:31:48 IST 2025 NEUTRAL CITATION C/SCA/6741/2024 JUDGMENT DATED: 06/10/2025 undefined behalf of the respondents.
3. Having regard to the controversy involved which is in a narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing.
4. By this petition under Articles 226/227 of the Constitution of India, the petitioner has prayed to quash and set aside the impugned order passed by the respondent under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (For Short "the Act") dated 31.08.2024 along with demand notice dated 23.03.2024 under Section 156 of the Act and notice for penalty under Section 274 read with Section 217AAC of the Act for the Assessment Year 2022-23.
5. The brief facts of the case are as under :-
5.1. The petitioner is a Private Limited Company and filed its return of income for the Assessment Year 2022-23 on 18.10.20222 declaring total income of Rs.3,43,36,165/-.
Subsequently the case of the petitioner was selected for scrutiny of Computer-Assisted Scrutiny Selection (CASS) and Page 2 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Mon Oct 13 2025 Downloaded on : Mon Oct 13 21:31:48 IST 2025 NEUTRAL CITATION C/SCA/6741/2024 JUDGMENT DATED: 06/10/2025 undefined notice under Section 142(1) of the Act was issued on 01.08.2023 requesting to furnish several details. 5.2. In response to the notice dated 01.08.2023, the petitioner filed its reply dated 28.03.2023 along with computation of total income, MAT computation, financial, ITR forms etc. However, the respondent issued another notice on 26.02.2024 under Section 142(1) of the Act which was again replied by the petitioner on 28.02.2024. The petitioner also filed additional reply on 04.03.2024.
5.3. Subsequently, the respondent issued third show cause notice on 13.03.2024 calling for further details from the petitioner. The petitioner filed its reply to the show cause notice on 15.03.2024. It was the case of the petitioner that the last show cause notice was issue to the petitioner on 15.03.2024 calling for several details and also directing the petitioner to file its response on or before 18.03.2024 i.e. within three days. It was further the case of the petitioner that out of three days i.e. 16.03.2024 and 17.03.2024 were Saturday and Sunday and therefore, practically the petitioner was not given any time to Page 3 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Mon Oct 13 2025 Downloaded on : Mon Oct 13 21:31:48 IST 2025 NEUTRAL CITATION C/SCA/6741/2024 JUDGMENT DATED: 06/10/2025 undefined file the reply.
5.4. As the petitioner could not file any reply, the respondent passed the final Assessment Order under Section 143(3) read with Section 144B of the Act on 23.03.2024 as well as raised demand notice under Section 156 of the Act as well as notice for penalty under Section 274 read with Section 271AAC of the Act on the same date i.e. on 23.03.2024, which are not impugned in the present writ petition.
6. Learned advocate Mr. Darshan Patel for the petitioner submitted that the final Assessment Order passed by the respondent is in gross violation of the principles of natural justice. In the show cause notice dated 15.03.2024, the respondent granted time of less than three days to file its reply. Two days out of the three days were Saturday and Sunday and, therefore, practically the petitioner was not granted any time to file its reply and the final Assessment Order was passed on 23.03.2024. It was further submitted that non-granting minimum 15 days time is contrary to the decision of this Court in case of M/s. Advance Reality Developers v. National E- Page 4 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Mon Oct 13 2025 Downloaded on : Mon Oct 13 21:31:48 IST 2025
NEUTRAL CITATION C/SCA/6741/2024 JUDGMENT DATED: 06/10/2025 undefined Assessment Centre, Delhi rendered in Special Civil Application No. 7731 of 2021 dated 20.12.2021 wherein this Court has observed that minimum 15 days' time is a reasonable time.
6.1. It was further submitted by learned advocate Mr. Darshan Patel that if the respondent had not granted sufficient time, the respondent ought to have granted personal hearing through video conference as per Section 144B(6)(vii) of the Act. In wake of such submissions, learned advocate Mr. Darshan Patel has contended that the respondent has violated the basic principles of natural justice and fair play and therefore, the illegality has crept in the final Assessment Order.
7. Per contra, learned Senior Standing Counsel Mr. Karan Sanghani for the respondent could not controvert the submissions made by learned advocate Mr. Darshan Patel. After relying upon the affidavit-in-reply filed on behalf of the respondent, it was submitted that the respondent earlier had granted time on many occasion to file its reply, however, the same were not filed by the petitioner. However, learned Senior Page 5 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Mon Oct 13 2025 Downloaded on : Mon Oct 13 21:31:48 IST 2025 NEUTRAL CITATION C/SCA/6741/2024 JUDGMENT DATED: 06/10/2025 undefined Standing Counsel Mr. Karan Sanghani could not controvert the fact that the final Assessment Order was passed on 15.03.2024 and only three days; time was granted to the petitioner to file its reply, and two days out of three days were Saturday and Sunday. It was therefore submitted that this Court may pass appropriate order.
8. Having heard the learned counsel for the respective parties and having gone through the material placed on record, it is not in dispute that the respondent had given only three days' time to file the reply. It is a 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 hearing is must for it to be unbiased hearing. In the instant case, the fact is not in dispute that the petitioner was not given appropriate time to respond to the notice issued under Section 142(1) of the Act and the final Assessment Order was passed without hearing the petitioner.
9. In view of the same, the impugned Assessment Order Page 6 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Mon Oct 13 2025 Downloaded on : Mon Oct 13 21:31:48 IST 2025 NEUTRAL CITATION C/SCA/6741/2024 JUDGMENT DATED: 06/10/2025 undefined passed by the respondent under Section 143(3) read with Section 144B of the Act, dated 23.03.2024 along with demand notice dated 23.03.2024 under Section 156 of the Act and notice for penalty under Section 274 read with Section 217AAC of the Act for the Assessment Year 2022-23 are not tenable and the same are required to be quashed and set-aside.
10. Considering the facts of the case, the petition succeeds and is accordingly allowed. The impugned Assessment Order dated 23.03.2024 passed by the respondent under Section 143(3) read with Section 144B of the Act, and notice for demand under Section 156 of the Act and penalty under section 274 read with Section 217AAC of the Act, of the same date are hereby quashed and set aside.
11. The matter is remanded to the respondent - Assessing Officer to pass a fresh de novo order, in accordance with law after considering the reply of the petitioner as well as after providing an opportunity of hearing to the petitioner.
12. Such exercise shall be completed within 12 weeks from the date of receipt of copy of this order. Page 7 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Mon Oct 13 2025 Downloaded on : Mon Oct 13 21:31:48 IST 2025
NEUTRAL CITATION C/SCA/6741/2024 JUDGMENT DATED: 06/10/2025 undefined
13. Rule is made absolute to the aforesaid extent. No order as to costs.
(BHARGAV D. KARIA, J) (PRANAV TRIVEDI,J) phalguni Page 8 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Mon Oct 13 2025 Downloaded on : Mon Oct 13 21:31:48 IST 2025