Usha Martin Telematics Ltd Vs ACIT (Calcutta High Court)
The Calcutta High Court has overturned an order issued by the Assistant Commissioner of Income Tax against Usha Martin Telematics Ltd., citing a violation of natural justice principles. The court was hearing a writ petition challenging a notice under section 148A(3) and a subsequent notice under section 148 of the Income Tax Act for the assessment year 2019-20.
Usha Martin Telematics had responded to a notice under section 148A(1) on March 31, 2025, and requested a personal hearing. Despite this request, the assessing officer proceeded to issue the order without providing the company with an opportunity to be heard. The petitioner’s counsel argued that this failure to grant a hearing was a procedural lapse.
During the proceedings, the department’s advocate acknowledged that a personal hearing had not been afforded to the petitioner. The court observed that the scheme of the Income Tax Act, specifically section 148A, mandates that an assessee be given a right to show cause and be heard before an adverse order is passed. The failure to comply with this requirement, in the court’s view, “vitiates the order itself.”
The court did not delve into the merits of the case but focused on the procedural defect. The judicial precedent set in this case reaffirms the importance of natural justice in tax proceedings. Consequently, the court set aside the order dated April 29, 2025, and directed the respondents to complete the proceedings by providing Usha Martin Telematics with a personal hearing within 12 weeks.
