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IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
SURYA PRAKASH KESARWANI, JAYANT BANERJI, JJ.
Nabco Products Private Limited – Petitioner
Versus
Union of India and Others – Respondents
Writ Tax No. 997 of 2022
Decided On : 03-08-2022
Income Tax Act, 1961 – Section 148A(d) and 154 – Assessment – Notice - Rectification of mistake - The practice of frequently violating principles of natural justice, non consideration of replies of assessees under one pretext or other or rejecting it with one or two lines orders without recording reasons for rejection, is gradually increasing which needs to be taken care of immediately by respondents at highest level, otherwise prevailing situation of arbitrary approach and breach of principles of natural justice may not only adversely affect assessees who pay revenue to Government, but also may develop a perception amongst people/assessees that it is difficult to get justice from the authorities in statutory proceedings.(Para 7)
Finding of the court :
An order under Section 148-A(d) of Act, 1961 has been passed by the respondent no. 2, prima-facie, without consideration to the reply filed by the petitioner and assessee's application under Section 154 of Act, 1961 has also been rejected in the same manner - The excuse orally being set up usually by the departmental counsels is that there is some problem in computerisation system which is solely controlled by respondent no. 1 i.e.Central Board of Direct Taxes, New Delhi, and they can not, at their own, correct system - Liberty is granted to respondents to pass an order afresh under Section 148A(d) of Act 1961 after affording reasonable opportunity of hearing to the petitioner.
Result: Writ petition is allowed
JUDGMENT :
1. Heard Sri Abhinav Mehrotra, learned counsel for the petitioner, Sri Sudarshan Singh, learned counsel for the respondent no. 1 and Sri Gaurav Mahajan, learned Senior Standing Counsel for the respondent nos. 2 and 3.
2. This writ petition has been filed praying for the following reliefs:
(b) To issue a writ, order or direction in the nature of CERTIORARI quashing the IMPUGNED ORDER Dated 06.06.2022 passed u/s 154 of the Income Tax Act, 1961 by the Respondent No. 2.
(c) To issue a writ, order or direction in the nature of CERTIORARI quashing the IMPUGNED Notice Dated 30.03.2022 u/s 148 of the Income Tax Act, 1961 by the Respondent No. 2.”
3. On 26.07.2022 and 02.08.2022, this Court passed the following orders:
Heard Sri Abhinav Mehrotra, learned counsel for the petitioner, Sri Sudarshan Singh, learned counsel for the respondent No. 1 and Sri Gaurav Mahajan, learned Senior Standing Counsel for the respondent Nos. 2 and 3.
This writ petition has been filed praying for the following relief:
“(a) To issue a writ, order or direction in the nature of CERTIORARI quashing the IMPUGNED ORDER Dated 30.03.2022 passed u/s 148A(d) of the Income Tax Act, 1961 by the Respondent No. 2.
(b) To issue a writ, order or direction in the nature of CERTIORARI quashing the IMPUGNED ORDER Dated 06.06.2022 passed u/s 154 of the Income Tax Act, 1961 by the Respondent No. 2.
(c) To issue a writ, order or direction in the nature of CERTIORARI quashing the IMPUGNED Notice Dated 30.03.2022 u/s 148 of the Income Tax Act, 1961 by the Respondent No. 2.”
Prima-facie, from perusal of Annexure-3 to the writ petition, it appears that the petitioner has submitted a reply to the notice under clause (b) of Section of Section 148A of the Act, 1961 dated 22.03.2022. The reply was submitted on 29.03.2022. However, the impugned order under Section 148A(d) has been passed on the ground that no reply has been submitted. The application for rectification of the mistake submitted by the petitioner under Section 154 of the Act, 1961 has been rejected on the ground that no reply was received.
The petitioner has filed a copy of screen-shot of uploading his reply dated 29.03.2022, which appears at page 25 of the writ petition. Thus, the impugned order passed by the respondents, prima facie appears to be erroneous.
Sri Gaurav Mahajan, learned counsel for the respondent Nos. 2 and 3 prays for and is granted a week's time to file short counter affidavit in which the respondents shall specifically state as to whether petitioner has submitted reply dated 29.03.2022 and whether it is available on the portal.
Put up as a fresh case before the appropriate bench on 02.08.2022. As an interim measure, it is provided that the impugned notice under Section 148 and the impugned order under Section 148A(d) of the Act, 1961, shall be kept in abeyance till the next fixed.
02.08.2022
Heard Shri Abhinav Mehrotra, learned counsel for the petitioner and Shri Gaurav Mahajan, learned Senior Standing Counsel for the respondent nos. 2 and 3.
An order under Section 148-A(d) of the Income Tax Act, 1961 has been passed by the respondent no. 2, prima-facie, without consideration to the reply dated 29.03.2022 filed by the petitioner and the assessee's application under Section 154 of the Act, 1961 has also been rejected in the same manner.
Despite order of the Court dated 26.07.2022, the respondent nos. 2 and 3 are not filing even short counter affidavit.
Therefore, we direct the respondent nos. 2 and 3 to file short counter affidavit by tomorrow, failing which both the respondents shall remain personally present before this Court on 03.08.2022 and shall show cause.
Put up as a fresh case before the appropriate Bench tomorrow, i.e. on 03.08.2022 at 10:00 a.m.”
4. Today, a short counter affidavit on behalf of the respondent no
Prevailing state of affairs clearly reflects that in absence of any effective system of accountability of erring officers, the harassment of the assessees and breach of principles of natural justice ....
Principles of natural justice must be adhered to in administrative proceedings, and failure to do so may result in the setting aside of orders and the requirement for a fair process.
The central legal point established in the judgment is that the failure to consider the petitioner's reply in the assessment proceedings amounted to a breach of principles of natural justice, leading....
Breach of natural justice warrants setting aside impugned orders and necessitates following due process in recommencing the proceeding.
The central legal point established in the judgment is the requirement to adhere to principles of natural justice, including providing a hearing to the petitioner before passing orders under the Inco....
An assessment order passed by violating the principles of natural justice and lacking consistency between the reasons in the initial notice and the show cause notice is liable to be set aside for fre....
Point of Law : No justification for taking the contempt petition off the list of the High Court, albeit with permission granted for its re-listing.
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