Case Law Details
Durga Trading Company & Anr. Vs Deputy Director of Income Tax & Ors. (Calcutta High Court)
Introduction: In the case of Durga Trading Company & Anr. v. Deputy Director of Income Tax & Ors., the Calcutta High Court examined the validity of an income tax assessment order, focusing on the violation of natural justice. This article provides an in-depth analysis of the case and the court’s ruling.
Case Background: The core issue revolved around whether the Central Processing Centre (CPC) could propose adjustments in the Intimation under Section 143(1)(a) of the Income Tax Act, 1961, and subsequently pass an order under Section 154 without granting the petitioner an opportunity for a hearing, as stipulated in Section 154(3).
The case is relevant in scenarios where individuals are not given a reasonable opportunity for a hearing. Such instances of natural justice violation often form strong grounds for challenging orders.
Challenges and Facts: The petitioner challenged an adjustment proposed in the Intimation under Section 143(1)(a). When objections were raised against this adjustment, an intimation containing the adjustment was sent without addressing the objections. Subsequently, when the petitioner sought rectification under Section 154, the CPC not only upheld the adjustment but also increased the amount, resulting in a substantial demand.
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