The Bombay High Court has admonished the tax department for using AI generated order to reject the contentions of the assessee without giving any reasons.
“The principles of natural justice and fairness are too valuable to be sacrificed at the altar of AI and automation expediency,” the court remarked, underscoring that the duty to provide reasons for an adverse order is an established facet of natural justice. The HC advised the revenue department to create a system in which the Centralised Processing Center (CPC) or demonstrates ‘thoughtful consideration’ and that the essence of orders is not like the “inscrutable face of sphinx.”
A taxpayer had filed a petition against a non-speaking order (an order without explanation) issued by the Tax Department, which had declared return filed as invalid due to the non-filing of a tax audit report. The rejection of the taxpayer’s contentions came without explanation, leaving them with little recourse except to challenge the decision in court.
