A Division Bench of the Kerala High Court emphasized the mandatory nature of providing a personal hearing before issuing an order under Section 148A(d) of the Income Tax Act.
The Revenue appealed the Single Judge’s decision, challenging it before the Division Bench.
As the impugned judgment already contained a comprehensive account of the petitioner’s case, the Bench opted not to repeat these details in their judgment, given the narrow scope of the Revenue’s appeal.
The jurisdictional officer had issued an assessment reopening notice and demand to the petitioner, who argued that the order was passed without granting them the required opportunity to be heard under Section 148A(b) of the Income Tax Act.
The petitioner contended that the absence of a personal hearing violated the principles of natural justice, thereby rendering both the order and the Show Cause Notice legally flawed. The Single Judge found that the failure to provide the assessee with a personal hearing, as envisaged in Section 148A of the IT Act, invalidated the impugned orders and related notices.
Consequently, the court quashed the order and notice, directing the writ petitioner to appear before the appellant by January 15, 2024, with all pertinent documents for a hearing. It was explicitly stated that if the petitioner failed to appear on the specified date, no further opportunity would be granted by the Income Tax Officer.
Representing the appellant, P G Jayashankar, the Standing Counsel, and V P Narayanan, the counsel for the respondent/writ petitioner, were involved in the case. The appellant’s grievance was limited to the Single Judge’s ruling that a personal hearing is mandatory in an inquiry under Section 148A(b) of the IT Act.
In defense of this stance, P G Jayasankar argued that, given the nature of the proceedings, the statutory scheme, and the language of the provisions, the assessee is not obligated to be afforded a personal hearing before the issuance of an order under Section 148A(d) of the Income Tax Act.
The court observed that the necessity of providing a personal hearing to the assessee in an inquiry under Section 148A(b) of the IT Act had recently been considered by the Division Bench in the case of Income Tax Officer v. Asamannoor Service Co-operative Bank Limited.
The Bench concluded that Section 148A of the IT Act mandates granting the assessee an opportunity of being heard, including the right to a personal hearing.
The High Court Bench of Justices Kauser Edappagath and A K Jayasankaran Nambiar affirmed that the precedent from the mentioned judgment applied squarely to the present case. Consequently, they found no merit in the appeal and dismissed the Writ Appeal as devoid of merit.
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