‘He Who Heard Must Decide Or He Who Decides Must Hear’: Kerala HC quashes Income Tax order passed by Officer who did not Hear the Case [Read Order]

The Kerala High Court has viewed that the doctrine ‘he who heard must decide or he who decides must hear’ applies to statutory authorities.  The court held that if the income tax officer who hears the case does not render the decision which is gross violation of the principles of natural justice.

Sri. Johnson Koomullil Thomas, the petitioner/assessee has filed this writ petition challenging an order passed by the Assessing Officer under Section 148A of the Income Tax Act, 1961.

The Income Tax Assessing Officer issued a show cause notice under Clause (b) of Section 148A of the Income Tax Act to the petitioner, stating that the income chargeable to tax for the assessment year 2017–18 has escaped assessment and why a notice under Section 148 should not be issued.

The assessee submitted a reply. The petitioner was given an opportunity to hear. The petitioner was later served with proceedings under Clause (d) of Section 148A, asking the petitioner to file his return for the year.

The petitioner submitted that the orders had been issued without jurisdiction as they were not passed by the person who heard them. The threshold of Rs. 50 lakhs has not been attained so as to invoke the extended period of limitation under Section 149 of the Income Tax Act.

Section 148A provides that the Assessing Officer shall, before issuing any notice under Section 148, conduct any inquiry, if required, with the prior approval of specified authorities, with respect to the information that suggests that the income chargeable to tax has escaped assessment

The petitioner contended that the order was passed in violation of the principle ‘he who decides must hear’. The single bench of Justice Murali Purushothaman has observed that Section 148A of the Income Tax Act provides for the opportunity to be heard by the assessee. The court quashed the order, which was not passed by the officer who heard the petitioner’s order.

Further, directed the assessing officer to pass fresh orders pursuant to show cause notice.

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