Aircel Limited Vs DCIT (Madras High Court)
Conclusion: Income tax penalty proceedings initiated against the company under Section271(1)(c) was quashed as no sufficient time was given for reply and a personal hearing rendered the proceedings procedurally unfair and legally unsustainable.
Held: In the instant case, show cause notice dated 27.03.2024 (for FY 2016–17) was uploaded on GST portal at 08:29 p.m., requiring reply with supporting documents by 06:09 p.m. next day (28.03.2024). Assessee contended that hardly 24 hours for reply; no opportunity of personal hearing was given before passing of order and hence, there was violation of principles of natural justice. Respondent’s stand was that penalty notice arose from earlier assessment proceedings for the financial year 2016-17 therefore, prayed for appropriate orders. It was held that the issuance of the impugned order without sufficient time for reply and without affording a personal hearing rendered the proceedings procedurally unfair and legally unsustainable. Accordingly, the Court set aside the impugned penalty order dated 30th March 2024 and remanded the matter back to the Income Tax Department for fresh consideration. The Court directed Aircel Ltd. to file its detailed reply with supporting documents within two weeks of receiving the order and instructed the department to grant a minimum 14-day notice before conducting a personal hearing and deciding the matter afresh.
