High Court of Kerala sets aside income tax assessment order due to violation of natural justice

Case Name:

WP(C) No. 34046 of 2023 - Anna Aluminium Company (P) Ltd. v. Assistant Commissioner of Income Tax and others

Key Takeaways:

1. The petitioner filed an appeal against an income tax assessment order.
2. The petitioner requested a personal hearing through video conferencing but was not given the opportunity.
3. The court found that there was a violation of the principles of natural justice.
4. The assessment order was set aside, and the case was remanded for a fresh hearing.
5. The Commissioner of Income Tax (Appeals) was directed to provide a new hearing date and time to the petitioner.
6. If the petitioner does not avail this opportunity, no further opportunities will be given, and the Commissioner of Income Tax (Appeals) can pass the order in accordance with the law.

Case Synopsis:

This is a judgment from the High Court of Kerala at Ernakulam, delivered by Justice Dinesh Kumar Singh on November 3, 2023. The case is WP(C) No. 34046 of 2023.

The petitioner in this case is Anna Aluminium Company (P) Ltd., represented by its Managing Director Mr. Bobby M. Jacob. The respondents are:

1. The Assistant Commissioner of Income Tax, Corporate Circle 1(1), Kochi.
2. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), New Delhi.
3. The Commissioner of Income Tax, National Faceless E-Assessment Centre, New Delhi.
4. Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, represented by its Secretary.

The petitioner had filed an appeal under Section 250 (of Income Tax Act, 1961) of the Income Tax Act, 1961 against the assessment order dated March 31, 2016, for the assessment year 2013-14. The petitioner was given an opportunity to request a personal hearing through video conferencing facility. The petitioner then submitted a request for a personal hearing through video conferencing, but despite this, the petitioner was not afforded an opportunity for a hearing, and the impugned order (Exhibit P-8) was passed.

The court found that there has been a violation of the prescribed principles of natural justice in passing the impugned order. Therefore, the court allowed the writ petition, set aside the impugned order, and remanded the matter back to the file of the second respondent (Commissioner of Income Tax (Appeals)) to decide the appeal afresh after affording an opportunity of hearing to the petitioner. The second respondent is directed to send a communication to the petitioner intimating the date and time for the personal hearing. If the petitioner does not avail this opportunity, no further opportunities shall be afforded, and the second respondent would be free to pass the order in accordance with the law.

FAQ:

Q1: What was the petitioner’s appeal about?

A1: The petitioner filed an appeal against an income tax assessment order.

Q2: Did the petitioner request a personal hearing?

A2: Yes, the petitioner requested a personal hearing through video conferencing.

Q3: Was the petitioner given the opportunity for a hearing?

A3: No, despite the petitioner’s request, they were not given the opportunity for a hearing.

Q4: What did the court find regarding the assessment order?

A4: The court found that there was a violation of the principles of natural justice in passing the assessment order.

Q5: What was the court’s decision?

A5: The court set aside the assessment order and remanded the case for a fresh hearing. The Commissioner of Income Tax (Appeals) was directed to provide a new hearing date and time to the petitioner.

1. The petitioner had filed appeal under Section 250 (of Income Tax Act, 1961) against the assessment order 31.03.2016 in respect of the assessment year 2013-14. Vide Exhibit P-6 communication dated 26.07.2023, the petitioner was given an opportunity to request for personal hearing to make oral submission in respect of his case through video conferencing facility. The petitioner was directed to submit his request for personal hearing through video conferencing facility through the registered e-mail www.incometax.gov.in by 11.00 am of 28.07.2023. It was also made clear that if no request for personal hearing would be received by the given time and date, the appeal would get finalised as per materials available on record.

2. After receiving the said communication, the petitioner responded vide the communication dated 28.07.2023 seeking hearing through video conferencing. Despite this communication, the petitioner was not afforded with an opportunity of hearing and the impugned order in Exhibit P-8 came to be passed.

3. Considering the fact that the petitioner had specifically requested for personal hearing in response to the communication in Exhibit P-6 and the petitioner was not afforded with an opportunity of hearing and the the appeal got finalised vide Exhibit P-8 order, I find that there has been violation of the prescribed principles of natural justice in passing the Exhibit P-8 order.

4. In view thereof, the present writ petition is hereby allowed, the impugned order in Exhibit P-8 is set aside and the matter is remanded back to file of the 2nd respondent to decide the appeal afresh after affording an opportunity of hearing to the petitioner for which a communication should be sent to the petitioner intimating him the date and time for personal hearing. If the petitioner does not avail this opportunity, it is made clear that no further opportunities shall be afforded to the petitioner and the 2nd respondent would be free to pass the order in accordance with the law.

With the above directions, the present writ petition stands allowed.

Sd/-

DINESH KUMAR SINGH

JUDGE