Fixation of Hearing on Very Next Date of Show-Cause Notice violates Natural Justice Principles: ITAT slams Dept for Casual Approach [Read Order]

The Delhi bench of the ITAT comprising Judicial Member Mr. Amit Shukla and Accountant Member Mr. Mr. Pradip Kumar Kedia has recently quashed an order citing the violation of natural justice principles as the hearing was fixed on the very next date of the issuance of show-cause notice.

The bench, while quashing an order against the department, granted relief to the assessee, Sheela Devi and held that “We are constraint to observe that such a casual approach of a very senior functionary of the Department does not augur well in the eyes of public and cannot be countenanced on the touchstone of sacrosanct principle of natural justice explicit in 263 itself.”

“We also simultaneously advert to another plank on behalf of the assessee alleging total lack of opportunity while concluding the proceedings under Section 263 of the Act. It is apparent from the records that solitary show cause notice issued to the assessee was for attendance on the very next date, i.e., 26.03.2021 in substitution of the first show cause notice fixing the hearing beyond limitation period. No other opportunity was given to the assessee. A question would arise as to whether a failure to give a reasonable opportunity to the assessee of being heard was only a procedural irregularity in such gross circumstances and thus curable and did not render the order passed by PCIT void ab initio and nonest in law per se,” the bench said.

“Hence, in the absence of any opportunity to the assessee, for which the fault is attributable squarely to the PCIT is fatal and such defect being incurable, the revisionary order passed under Section 263 of the Act is also required to be quashed independently on this ground also,” the bench said.

To Read the full text of the Order CLICK HERE

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