Case Law Details
Bhikhabhai Maneklal Patel Vs PCIT (Gujarat High Court)
The Gujarat High Court heard a writ petition involving the rejection of a revision application filed under Section 264 of the Income Tax Act, 1961. The petitioner sought remand of the matter to the Principal Commissioner of Income Tax, Ahmedabad-3 for fresh consideration on merits after an opportunity of hearing. The petitioner relied upon the assessment order dated 30.03.2022, wherein the Assessing Officer had recorded that the assessee had a remedial action available under Section 264 of the Act. Acting on that observation, the petitioner filed a revision application dated 11.05.2022 raising various contentions and requested a personal hearing. A notice dated 01.03.2024 was thereafter issued stating that personal hearing was not compulsory and that written submissions would constitute sufficient compliance. The petitioner filed a reply on 08.03.2024 and again requested permission to appear personally. However, by order dated 22.03.2024, the revision application was rejected on the ground that merely because the Assessing Officer had mentioned the availability of a remedy under Section 264, such application could not be accepted.
The petitioner relied upon the decisions of the Punjab and Haryana High Court in Sahil Machines India (P.) Ltd. v. Union of India and the Calcutta High Court in Vikas Nagelia v. CIT. During the hearing, the High Court queried whether the petitioner had been granted an opportunity of personal hearing before rejection of the revision application. The Revenue was unable to dispute that no such opportunity had been given. The Court also noted that the Assessing Officer had specifically recorded in the assessment order that the petitioner had a remedy under Section 264, following which the petitioner filed the revision application. The Court further observed that although the petitioner had raised various contentions in the reply, those contentions had been dealt with only cursorily by the Principal Commissioner of Income Tax. The revision application was ultimately rejected merely by observing that the Assessing Officer’s reference to Section 264 did not make the application acceptable.
The Court observed that it was undisputed that the petitioner had availed the statutory remedy under Section 264 as indicated by the Assessing Officer. Accordingly, the High Court quashed and set aside the order dated 22.03.2024 passed under Section 264 along with all consequential orders. The matter was remanded to the competent authority for fresh consideration. The Court directed the authority to decide the revision application by dealing with all the contentions raised by the petitioner through a reasoned order in accordance with law. It further observed that, if the competent authority so desired, an opportunity of hearing should be given to the petitioner. The writ petition was partly allowed, and the rule was made absolute to that extent.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
Since a very short issue is involved, with consent of learned advocates appearing for the respective parties, the matter is taken up for final hearing.
2. RULE. Learned Senior Standing Counsel Mr. Aaditya D. Bhatt waives service of notice of rule on behalf of respondent no.1.
3. At the outset, learned advocate Mr. Sudhir M. Mehta for the petitioner has submitted that the matter may be remanded to the respondent authorities, i.e. Principal Commissioner of Income Tax, Ahmedabad-3 (for short ‘PCIT- Ahmedabad-3’) for deciding the application on merits after affording an opportunity of hearing to the petitioner. He has referred to the Assessment Order dated 30.03.2022, wherein the Assessing Officer has made a remark that the assessee has a remedial action under the provision of Section 264 of the Income Tax Act,1961 (for short ‘the Act’). It is submitted that accordingly, the petitioner filed a revision application under Section 264 of the Act, raising various contentions dated 11.05.2022 and also requested for personal hearing. It is further submitted that a Notice for the hearing dated 01.03.2024 was also issued to the petitioner, stating that personal hearing is not compulsory to and a written submission or a reply shall be treated as sufficient compliance. Thereafter, the petitioner filed reply on 08.03.2024 also intimating the competent authorities to allow the petitioner to appear in person. However, by the impugned order dated 22.03.2024 the application filed by the petitioner under Section 264 of the Act is rejected by recording that merely because the Assessing Officer has mentioned in its order to file an application under Section 264 of the Act, such application cannot be accepted. Thus, it is urged that the matter may be remand to the competent authority for fresh consideration.
4. Reliance is placed on the judgment passed by Punjab and Haryana High Court in the case of Sahil Machines India (P.) Ltd. v. Union of India (Punjab & Haryana) as well as the judgment passed by the High Court of Calcutta in the case of Vikas Nagelia v. CIT (Calcutta).
5. Upon query raised by this Court, learned Senior Standing Counsel Mr. Aaditya Bhatt, as to whether any opportunity of personal hearing was given to the petitioner or not before rejecting the application under Section 264 of the Act, he is unable to controvert the same. The aforesaid facts are not denied and we have specifically noted that the Assessing Officer in its order dated 30.03.2022, has specifically recorded that the petitioner has a remedial action under Section 264 of the Act and accordingly the petitioner pursued the said observation and filed an application under Section 264 of the Act, which has been rejected by the PCIT Ahmedabad-3 without giving personal hearing to the petitioner though the petitioner has requested for the same. We have also noted that petitioner has raised various contentions in his reply, which have been very cursorily dealt with by the respondent- PCIT, Ahmedabad-3. Finally, the application has been rejected by merely recording that the Assessing Officer has stated that order passed by him is subject to provision of Section 264 of the Act and such application cannot be accepted.
6. It is not in disput that the petitioner has availed the remedy available to file the revision application under Section 264 of the Act as suggested by the Assessing Officer. Accordingly, we quash and set aside the impugned order dated 22.03.2024 passed under Section 264 of the Act along with all the consequential orders. The matter is remanded to the competent authorities to decide the same after dealing all the contentions raised by the petitioner in the revision application by a reasoned order, in accordance with law. If the competent authorities so desires shall give an opportunity of hearing to the petitioner. Accordingly, the present writ petition is partly allowed. Rule is made absolute to the aforesaid extent.
Author Bio
