The Bombay High Court quashed the assessment order dated March 27, 2024, passed against Cheftalk Food and Hospitality Services Pvt. Ltd. under Section 144 read with Section 144B of the Income Tax Act, 1961. The court held that the Assessing Officer's failure to grant a mandatory seven-day response time to the petitioner before passing the order constituted a breach of the Standard Operating Procedure (SOP) and the principles of natural justice. The case was remanded for a fresh assessment after giving the petitioner a proper opportunity to respond.

1. Background:

The petitioner, Cheftalk Food and Hospitality Services Pvt. Ltd., challenged the assessment order passed by the Income Tax Department, citing that the order was issued without granting sufficient time to respond to the Show Cause Notice, thereby violating the principles of natural justice.

2. Grievance of the Petitioner:

The petitioner was issued a Show Cause Notice on March 22, 2024, and was given less than 24 hours to respond. The petitioner objected, arguing that such a short timeframe did not allow a fair opportunity to present their case, referencing a prior Karnataka High Court judgment that deemed similar practices as a violation of natural justice.

3. Court’s Observation:

The court noted that under the SOP, a mandatory seven-day response period should have been granted to the petitioner. The Assessing Officer's decision to provide only a two-day extension was arbitrary and insufficient.

4. Judgment:

• The impugned assessment order was quashed.
• The case was remanded for fresh assessment, with directions to reopen the portal within two weeks and allow the petitioner seven days to submit a detailed response.
• The consequential computation sheet and demand notice were also set aside.

5. Conclusion:

The judgment reinforced the importance of adhering to procedural fairness and the principles of natural justice in tax assessment processes.