High Court Quashes Income Tax Notice and Order Due to Non-Service and Violation of Natural Justice

Case Name:

Nilam Mantri vs. Income Tax Officer, Ward-2(1), Faridabad

Key Takeaways:

1. The respondent’s failure to file a para-wise written statement to specifically controvert the averments regarding the non-service of the notice prejudiced the petitioner.
2. The notice dated 19th March 2022 not having been specifically served and the order having been passed thereafter on 4th April 2022 without giving an opportunity violated the principles of natural justice and the procedure required under the law.
3. Sufficient material was presented by the petitioner to show that the notice and the subsequent order were served thereafter upon the petitioner.
4. The court allowed the writ petition, quashed the notice and order dated 4th April 2022, and imposed costs of Rs. 10,000 upon the respondent-Revenue to be paid to the petitioner.
5. The petitioner was directed to file a reply to the notice within 15 days from the date of the judgment, and it was open to the Revenue to proceed in accordance with the law thereafter.

Case Synopsis:

A judgment from the High Court of Punjab and Haryana at Chandigarh, with the case number 104 of 2023 and the neutral citation number 2023:PHHC:148355-DB. The case is titled “Nilam Mantri vs. Income Tax Officer, Ward-2(1), Faridabad.”

The judgment was delivered on 22nd November 2023 by Hon’ble Mr. Justice G.S. Sandhawalia and Hon’ble Ms. Justice Lapita Banerji. The petitioner was represented by Mr. Nikhil Goyal and Mr. Rana Gurtej Singh, Advocates, while the respondent, the Income Tax Officer, Ward-2(1), Faridabad, was represented by Mr. Saurabh Kapoor, Sr. Standing Counsel.

The petitioner had filed a writ petition under Articles 226 and 227 of the Constitution of India seeking the quashing of a notice under Section 148A(b) (of Income Tax Act, 1961), dated 19th March 2022 (Annexure P-3), along with a notice dated 4th April 2022 issued under Section 148 (of Income Tax Act, 1961) (Annexure P-1) and the order dated 4th April 2022 passed under Section 148A(d) (of Income Tax Act, 1961) (Annexure P-2).

The court noted that the respondent had not filed a para-wise written statement to specifically controvert the averments made in the writ petition regarding the non-service of the notice dated 19th March 2022. The petitioner claimed that the notice was never served upon them, and therefore, an opportunity was required to be granted under the said section. The court observed that the respondent’s failure to file a para-wise written statement to specifically controvert the said averments regarding the non-service of the notice prejudiced the petitioner.

After considering the facts and submissions, the court held that the notice dated 19th March 2022 not having been specifically served and the order having been passed thereafter on 4th April 2022 without giving an opportunity would violate the principles of natural justice and the procedure required under the law. The court also noted that the petitioner had placed sufficient material to show that apparently the notice and the subsequent order dated 4th April 2022 were served thereafter upon the petitioner.

As a result, the court allowed the writ petition, quashed the notice and order dated 4th April 2022, and imposed costs of Rs. 10,000 upon the respondent-Revenue to be paid to the petitioner. The petitioner was directed to file a reply to the notice within 15 days from the date of the judgment, and it was open to the Revenue to proceed in accordance with the law thereafter.

FAQ:

Q1: What was the outcome of the writ petition?

A1: The writ petition was allowed, and the notice and order dated 4th April 2022 were quashed.

Q2: What was the reason for quashing the notice and order? A2: The court found that the notice was not specifically served, and the order was passed without giving an opportunity, violating the principles of natural justice.

Q3: What action was taken against the respondent-Revenue?

A3: Costs of Rs. 10,000 were imposed upon the respondent-Revenue to be paid to the petitioner.