A Division Bench of the Kerala High Court held that affording personal hearing is mandatory prior to issuance of an order Section 148A(d) of the Income Tax Act.
The Revenue preferred the appeal before the Division Bench impugning the judgment of the Single Judge.
Since a detailed narration of the facts of the petitioner’s case in the writ petition is given in the impugned judgment, the Bench chose not to reiterate those in this judgment since the appeal of the Revenue lied in a very narrow compass.
The assessment reopening Notice and demand was issued to the petitioner by the jurisdictional officer. The petitioner contended that the order was passed without affording the petitioner an opportunity of being heard as mandated under Section 148A(b) of the Income Tax Act.
It was therefore contended that order was vitiated on account of the non-compliance with the rules of natural justice, and consequently, the Show Cause Notice too was vitiated in law.
It was noted that, “The 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 orders and consequential notices.
The said order and notice were therefore quashed, and the writ petitioner was directed to appear before the appellant herein on or before 15.01.2024 with all relevant documents in its possession for being heard. It was further made clear that if the petitioner did not appear on 15.01.2024, no further opportunity needed to be granted to it by the Income Tax Officer.
P G Jayashankar, the Standing Counsel for the appellant and V P Narayanan, the learned counsel for the respondent/writ petitioner.
The appellant is aggrieved only to the limited extent wherein the learned Single Judge held that personal hearing is mandatory in an enquiry under Section 148A(b) of the IT Act.
The standing counsel for the appellant P G Jayasankar submitted that considering the nature of the proceedings, the scheme of the statute and the language of the provisions, the assessee is not required to be given an opportunity of personal hearing before passing an order under Section 148A(d) of the Income Tax Act.
It was observed that the question whether affording a personal hearing to the assessee is mandatory in an enquiry under Section 148A(b) of the IT Act came up for consideration recently before the Division Bench of this Court in Income Tax Officer v. Asamannoor Service Co-operative Bank Limited.
The Bench noted that, “It was held that Section 148A of the IT Act contemplates that the assessee should be granted an opportunity of being heard and that opportunity must include the right of personal hearing as well.”
Justice Kauser Edappagath and Justice A K Jayasankaran Nambiar held that, “the dictum laid down in the said judgment squarely applies to the facts of this case. Hence, we find no merit in the appeal. We accordingly dismiss the Writ Appeal as devoid of merit.”
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