Beyond Research And Development Limited Vs ITO (Allahabad High Court)
The Allahabad High Court has quashed a penalty order issued by the Income Tax Department against Beyond Research And Development Limited, holding that the lack of a hearing violated the principles of natural justice.
The company had challenged an ex-parte order for the Assessment Year 2022-23, which imposed a penalty under Section 271D of the Income Tax Act, 1961. The petitioner’s counsel argued that a requested hearing under the Faceless Penalty Scheme was not granted, making the order invalid. The Income Tax Department’s counsel disputed this claim, leading to a factual confusion before the court.
Without resolving the dispute, the court found the ex-parte nature of the order to be a violation of procedural fairness. The judgment underscored that a party’s right to be heard is a fundamental legal principle that must be upheld.
Consequently, the court set aside the impugned order and directed the tax authorities to provide a new opportunity for a hearing. The court also mandated that the petitioner must attend the hearing without seeking any adjournment. To ensure timely resolution, the entire process must be completed within eight weeks. This ruling emphasizes the judiciary’s role in ensuring administrative actions, even under automated schemes, adhere to due process.
