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Case Law Details

Case Name : Hyundai Heavy Industries Ltd VS The Union of India and others (Uttarakhand High Court)
Appeal Number : Civil Writ Petition No. 1778 of 2010 (M/S)
Date of Judgement/Order : 21/07/2011
Related Assessment Year :
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Hyundai Heavy Industries Ltd VS Union of India (Uttarakhand High Court)- The petitioner consequently orally objected to the constitution of the collegium and submitted that there was a conflict of interest if the DIT-II continues to sit in the collegium since he was involved in the reassessment proceedings. In-spite of the oral objection, the DIT-II did not recuse himself and participated in the proceedings and finalised the draft assessment order. The Panel without considering the objection of the petitioner issued orders to the Assessing Officer by its order dated 30th September, 2010 for the assessment year 2002-03, 2004-05, 2005-06 and 2007-08. The petitioner, being aggrieved by the aforesaid orders, has filed the present writ petition challenging the vires of Section 144C of the Act as well as Rule 3 (2) of the Rules and has also prayed for the quashing of the order dated 30th September, 2010 passed by the Panel. In the alternate, the petitioner has prayed that the provision of Section 144C should be read down so that there is no conflict of interest. on Appeal Honourable High Court held that :-

Court finds that the doctrine of nemo judex in causa sua is subject to the doctrine of necessity. Bias cannot be established merely because one of the members of the Panel is also a jurisdictional Commissioner. In the present case, there is nothing to indicate that the jurisdictional Commissioner was interested in his personal capacity in the outcome of the assessment order. Further, there is nothing to indicate that the directions issued by the Panel to the Assessing Officer was based on extraneous considerations. The Commissioner is required to discharge certain functions under the Act. He exercises his power impartially and with an independent mind. Such exercise of statutory functions does not get coloured when a member of a Panel issues directions to the Assessing Officer.

Court Further noted that the DIT-II is exercising supervisory functions and has a hand in the reopening of the assessments u/S 147/148 of the Act and is also a member of the Panel considering the draft assessment which has been made pursuant to the reopening of the assessment. Therefore, real likelihood of bias cannot be ruled out. Even if the officer is impartial and there is no personal bias or malice, nonetheless, a right minded person would think that in the circumstances, there could be a likelihood of bias on his part.

Court directs the CBDT to ensure that a jurisdictional Commissioner is not nominated as a member of the DRP under Rule 3 (2) of the Rules. By doing this, the principle that justice must not only be done but seen to be done would be ensured.


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