Case Law Details
Johnson Koomullil Thomas Vs ITO (Kerala High Court)
In a significant ruling, the Kerala High Court addressed procedural fairness in tax assessments under Section 148A of the Income Tax Act, 1961. The case of Johnson Koomullil Thomas vs Income Tax Officer (ITO) highlights the importance of adherence to principles of natural justice in administrative proceedings.
The petitioner, Johnson Koomullil Thomas, challenged the validity of Ext.P6 order issued by the Assessing Officer (AO) under Section 148A(b) of the Act. This section mandates that before initiating proceedings for escaped income assessment, the AO must afford the taxpayer an opportunity to respond to a show-cause notice.
The crux of the petitioner’s argument was that Ext.P6 and the subsequent Ext.P7 notice were issued by an AO who did not conduct the initial hearing. This procedural discrepancy raised concerns about the application of the “he who decides must hear” principle, a cornerstone of natural justice.
Section 148A of the Act explicitly requires the AO to conduct necessary inquiries, if any, and decide on the basis of material available whether to issue a notice under Section 148. The court acknowledged that failing to adhere to these procedural safeguards could undermine the fairness of the assessment process.
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