No Violation of Principles of Natural Justice if No Relevant Docs Were Produced in Response to SCN | HC

Case Details: St. Alphonsa Trust vs. Assessment Unit - [2025] 172 taxmann.com 235 (Madras)

Judiciary and Counsel Details

• K. Kumaresh Babu, J.
• T.V. Muthu Abirami, for the Petitioner.
• K. Parekh Kumar, Sr. Standing Counsel for the Respondent.

Facts of the Case

The assessee, a charitable trust, was running a Medical College and Hospital. During the assessment proceedings, the Assessing Officer (AO) issued a show cause notice proposing to make additions in respect of the loan taken and the loan repaid. In response, the assessee filed a detailed reply and attended the hearing through video conferencing.

However, the AO made additions to the income of the assessee without calling for any further documents. The assessee contended that the assessment order was passed in violation of the principles of natural justice and should be set aside.

High Court Held

The Madras High Court held that the assessee was given a show cause notice, to which it had replied, and a hearing through video conferencing had taken place. The assessee had clearly averred that it had appeared through video conferencing and explained in detail the way in which the loans were taken and repaid. This itself would mean that the said video conferencing was not an empty formality.

Further, it was the case of the assessee that had the AO called upon the assessee to produce the documents to substantiate their claim, the same would have been produced. When a show cause notice had been issued on certain allegations, it was the duty of the recipient of such a show cause notice to assail the same by producing relevant and necessary documents.

In the present case, the assessee had not produced such relevant and necessary documents. The assessee cannot expect the AO to call upon the assessee to produce further documents, as the AO will not be aware of what documents are available with the assessee to substantiate the same.

Hence, the assessee’s contention that the video conferencing was an empty formality was not tenable. Therefore, the writ petition was to be dismissed.

List of Cases Reviewed

• Assistant Commissioner of State Tax and others v. Commercial Steel Limited reported in 2021 SCC Online SC 884 (Para 12) followed.