Case Law Details
ITO Vs Abdul Majeed (Kerala High Court)
Introduction: In a recent judgment, the Kerala High Court addressed the necessity of a personal hearing prior to issuing orders under Section 148A(d) of the Income Tax Act. The case, ITO Vs Abdul Majeed, involved an appeal by the Revenue against a judgment passed by a learned Single Judge.
Detailed Analysis: The appeal arose from a writ petition filed by Abdul Majeed, challenging orders (Exts.P6 and P7) passed by the Income Tax Officer Ward-2, Tirur, under Section 148A(d) of the Income Tax Act, and the consequential notices (Exts.P8 and P9) proposing a re-assessment of income for the assessment years 2016-17 and 2019-20.
The petitioner’s contention was that the orders were passed without affording him a personal hearing, as mandated under Section 148A(b) of the IT Act. The learned Single Judge concurred, ruling that failure to provide a personal hearing vitiates the orders and consequential notices, thereby directing the petitioner to appear for a hearing.
The appellant argued that personal hearing is not mandatory for an inquiry under Section 148A(d) of the IT Act. However, a recent judgment by the Division Bench (Income Tax Officer v. Asamannoor Service Co-operative Bank Limited) held that the assessee must be granted an opportunity of being heard, including the right of personal hearing.
Conclusion: The Kerala High Court upheld the judgment of the learned Single Judge, affirming that personal hearing is mandatory before issuing orders under Section 148A(d) of the Income Tax Act. This decision emphasizes the importance of adhering to principles of natural justice and ensuring fairness in income tax proceedings. It reinforces the rights of taxpayers to present their case and be heard before any adverse actions are taken by tax authorities.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The Revenue is in appeal before us impugning the judgment dated 21.12.2023 of a learned Single Judge in W.P.(C).No.14993 of 2023. Since a detailed narration of the facts of the petitioner’s case in the writ petition is given in the impugned judgment, we choose not to reiterate those in this judgment since the appeal of the Revenue lies in a very narrow compass.
2. In the writ petition, the challenge of the writ petitioner was to Exts.P6 and P7 orders passed by the Income Tax Officer Ward-2, Tirur, in terms of Section 148A(d) of the Income Tax Act [hereinafter referred to as the ‘IT Act’] and the consequential notices [Exts.P8 and P9] issued to the writ petitioner by the said Officer under Section 148 of the IT Act proposing a re-assessment of the income for the assessment years 2016-2017 and 2019-20.
3. The grievance of the writ petitioner was that the appellant herein proceeded to pass Exts.P6 and P7 orders without affording the petitioner an opportunity of being heard as mandated under Section 148A(b) of the IT Act. It was therefore contended that Exts.P6 and P7 orders were vitiated on account of the non-compliance with the rules of natural justice, and consequently, Exts.P8 and P9 notices too were vitiated in law.
4. The learned 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 orders and notices were therefore quashed, and the writ petitioner was directed to appear before the appellant herein on or before 10.01.2024 with all relevant documents in its possession for being heard. It is challenging the said judgment of the learned Single Judge; the appellant is before us.
5. We have heard Sri. P. G. Jayashankar, the learned Standing Counsel for the appellant and Sri.K.J.Abraham,the learned counsel for the respondent/writ petitioner.
6. 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 learned standing counsel for the appellant Sri.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 IT Act. 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 (2024 KHC OnLine 28). 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. 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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