The main legal point established in the judgment is that the obligation to provide an opportunity of being heard to the assessee under Section 148A of the Income Tax Act includes a right to a personal hearing.

JUDGMENT :

A.K. Jayasankaran Nambiar, J.

The Revenue is in appeal before us impugning the judgment dated 17.10.2023 of a learned Single Judge in W.P.(C).No.12595 of 2023. Since a detailed narration of the facts of the petitioner's case in the writ petition is given in the impugned judgment, we choose not to reiterate those in this judgment since the appeal of the Revenue lies in a very narrow compass.

2. In the writ petition, the challenge of the writ petitioner was to Ext.P5 order passed by the Income Tax Officer Ward-2, Aluva, in terms of Section 148A(d) of the Income Tax Act [hereinafter referred to as the 'IT Act'] and the consequential notice [Ext.P6] issued to the writ petitioner by the said Officer under Section 148 of the IT Act proposing a re-assessment of the income for the assessment year 2019-20.

3. The grievance of the writ petitioner was that while the appellant herein had issued the notice under Section 148A(b) of the IT Act [Ext.P3] calling upon it to show cause as to why a notice under Section 148 should not be issued, and the petitioner had, by Ext.P4 reply, re-iterated that it had no taxable income and was therefore advised not to file a return of income as there was no income that had escaped assessment, the appellant herein proceeded to pass Ext.P5 order without affording the petitioner an opportunity of being heard as mandated under Section 148A(b) of the IT Act. It was therefore contended that Ext.P5 order was vitiated on account of the non-compliance with the rules of natural justice, and consequently, Ext.P6 notice too was vitiated in law.

4. The learned Single Judge found that inasmuch as Section 148A of the IT Act contemplated the provision of an opportunity of being heard to the assessee, the non-providing of a personal hearing to the assessee vitiated the impugned order and consequential notice. The said order and notice were therefore quashed, and the writ petitioner directed to appear before the appellant herein on or before 27.10.2023 with all relevant documents in its possession for being heard. It was further made clear that if the petitioner did not appear on 27.10.2023, no further opportunity needed to be granted to it by the Income Tax Officer.

5. The appeal by the Revenue is premised on the contention that the express provisions of Section 148A speak of providing an opportunity of being heard by serving upon the assessee a notice to show cause within such time as may be specified in the notice being not less than seven days. The contention, in other words, is that so long as the show cause notice envisaged in Section 148A is issued to the assessee, the opportunity of being heard is to be seen as provided. Reliance is placed on the decisions in Union of India (UOI) v. Jyoti Prakash Mitter -[(1971) 1 SCC 396] and Union of India (UOI) and Ors. v. Jesus Sales Corporation -[(1996) 4 SCC 69].

6. Per contra, it is the submission of the respondent/writ petitioner that the object of Section 148A of the IT Act was to enable the assessee to have an effective opportunity of clarifying its position vis-a-vis the allegations in the show cause notice before the authority that issued the said notice, and hence, the providing of a personal hearing was necessary to comply with the object of the statutory provision.

7. We have heard Sri.Jose Joseph, the learned Standing Counsel for the appellant and Sri.Premjit Nagendran, the learned counsel for the respondent/writ petitioner.

8. On a consideration of the rival submissions, we find ourselves unable to accept the contentions of the appellant.

9. Section 148A of the IT Act reads as follows:

“148A. The Assessing Officer shall, before issuing any notice under Section 148,-

(a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment;

(b) provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such ti