Case Law Details
Glance Care Private Limited Vs Union of India and 4 others (Allahabad High Court)
Allahabad HC quashes two Section 154 tax orders, citing laconic reasoning and violation of natural justice. Fresh hearing ordered.
The Allahabad High Court quashed two orders passed under Section 154 of the Income Tax Act, 1961, against Glance Care Private Limited. The court’s decision centered on procedural improprieties and a violation of the principles of natural justice. Glance Care had initially filed a writ petition challenging a notice under Section 148, an order under Section 148A(d), and an order under Section 154. During the initial hearing, the High Court, noting a pending Section 154 application, directed the respondent to decide the application within four weeks.
Following this directive, an order dated December 30, 2024, was passed under Section 154. Glance Care, aggrieved by this order, filed the present writ petition, arguing that the order was “laconic” and did not address the points raised in their application. The High Court, upon reviewing the December 30th order, agreed with the petitioner’s contention.
Subsequently, the respondent produced a new order dated February 6, 2025, also under Section 154. This order, the respondent claimed, was passed in response to the High Court’s observations on January 22, 2025, and therefore, no further hearing was necessary. The High Court strongly criticized this procedure. It emphasized that a fresh order could not be passed without formally recalling the previous order. Furthermore, the court clarified that its previous order had merely noted the petitioner’s contentions regarding the December 30th order and had not directed the passing of a fresh order. The court also pointed out that the filing of the writ petition did not obviate the need to provide the assessee with an opportunity to be heard before passing a fresh order.
The Allahabad High Court quashed both the December 30, 2024, and the February 6, 2025, orders. It directed Glance Care to appear before the concerned authority on a specified date, February 19, 2025, and mandated the authority to provide the petitioner with a hearing before passing a fresh order under Section 154. The court clarified that its decision to quash the previous orders should not influence the authority’s fresh decision, which should be made fairly and in accordance with the law. The writ petition was disposed of with these directions.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. This writ petition has been filed by the petitioner aggrieved of the notice dated 26.03.2024 issued under Section 148 of the Income Tax Act, 1961 (for short, ‘the Act’), order dated 26.03.2024 passed under Section 148A (d) of the Act and order dated 30.12.2024 passed under Section 154 of the Act.
2. When the petition earlier filed by the petitioner came up before this Court on 11.12.2024 in Writ Tax No. 2216 of 2024, on noticing that application filed by the petitioner under Section 154 of the Act was pending before the authority, the petition was disposed of directing the respondent no.2 therein to decide the pending application under Section 154 of the Act within a period of four weeks. Pursuant to the said order, the order dated 30.12.2024 (Annexure-9) was passed. Inter alia feeling aggrieved of the said order, the present petition was filed before this Court.
3. When the matter came up before this Court on 22.01.2025, noticing the contention of counsel for the petitioner that the order dated 30.12.2024 passed under Section 154 of the Act, after passing of the order by this Court, was wholly laconic and did not deal with any of the aspects raised in the said application, counsel for the respondents was granted time to complete instructions on the said aspect of the matter.
4. Today, counsel for the respondents has produced order dated 06.02.2025 passed by Joint Commissioner, Income Tax (OSD), Circle-1, Varanasi inter auia passing a fresh order under Section 154 of the Act, rejecting the said application and it has further been observed that the order is being passed taking into consideration the directions given by the High Court on 22.01.2025 and for that reason, no opportunity of hearing was given to the assessee.
5. We have gone through the order which has been passed by the Joint Commissioner of Income Tax. The procedure said to be adopted by the respondents, is not known to jurisprudence of any nature. When already application under Section 154 of the Act has been decided on 30.12.2024, without recalling the said order, a fresh order on 06.02.2025 could not have been passed. Further, the Court had only noted the contention in its order dated 22.01.2025 pertaining to the order being laconic and there was no direction to pass a fresh order and the indications made that as the order is being passed on the directions of the Court, no opportunity of hearing was required is, to say the least, most unwarranted and factually incorrect. Neither there was any direction nor the requirement of providing opportunity before passing a fresh order stood obviated only on account of filing of the writ petition before this Court.
6. In the overall fact situation of the case, it is apparent that the challenge laid in the writ petition regarding the order passed on 30.12.2024 being laconic, stands admitted and, therefore, the said order cannot be sustained and is accordingly quashed.
7. So far as the order dated 06.02.2025 is concerned, the same having been passed without recalling the earlier order and in violation of principles of natural justice, also cannot be sustained.
Consequently, the order passed on 06.02.2025 is also quashed.
8. The petitioner shall appear before the authority on 19.02.2025 and it would be required of the authority to provide opportunity of hearing to the petitioner and thereafter pass a fresh order on application under Section 154 of the Act in accordance with law.
9. The very fact that the two orders dated 30.12.2024 and 06.02.2025 passed by the authority have been quashed, would not influence his decision and he would deal with the petitioner fairly.
10. With the above directions, the petition stands disposed of.
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