Kerala HC quashes Re-Assessment Order for Denial of Virtual Hearing

Chakkunnath Gopi Vs ITO (Kerala High Court)

The case of Chakkunnath Gopi Vs Income Tax Officer (ITO) brought before the Kerala High Court revolves around the denial of a virtual hearing due to a procedural formality. This article delves into the details of the case, the judgment delivered by the court, and its implications.

The petitioner, Chakkunnath Gopi, contested an assessment order under Section 143(3) of the Income Tax Act, 1961, through an appeal. Opting for a virtual hearing, the petitioner followed due procedure, providing necessary details including the authorized representative’s credentials. However, despite compliance, the petitioner’s request for virtual hearing was denied on the grounds of non-compliance with the prescribed form.

The crux of the matter lies in the denial of virtual hearing based solely on procedural grounds. The court’s ruling emphasized that while procedures are essential, they should not impede the substantive rights of individuals, especially when it comes to fundamental rights such as the right to be heard. Denying a virtual hearing based on procedural formality without considering the petitioner’s eligibility for substantive right goes against principles of natural justice.

The judgment of the Kerala High Court sets a precedent by highlighting the importance of ensuring procedural fairness while adjudicating matters under the Income Tax Act. It underscores the need for authorities to exercise discretion judiciously, ensuring that procedural requirements do not overshadow the substantive rights of individuals.

FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT

This writ petition has been filed seeking the following reliefs:

“i) call for the records leading to issuance of Exhibit P5 order and quash the same by issuing a writ of certiorari:

ii)Pending hearing and final disposal of the writ petition, this Hon’ble Court be pleased to grant stay of all recovery proceedings pursuant to Exhibit P1.

iii)Issue such other and further reliefs as this Hon’ble Court may deem fit and proper in the interest of justice.”

2. Heard Sri. Anil D. Nair, learned Senior Counsel assisted by Sri. Adithya Unnikrishnan and Sri. Chirstopher Abraham, learned Central Counsel for the Income Tax Department.

3. The present writ petition has been filed impugning Ext.P5 order passed by the 2^nd respondent in an appeal instituted by the petitioner against the assessment order dated 27.12.2018 passed under Section 143(3) of the Income Tax Act, 1961. The petitioner was issued notice who opted for the virtual hearing in the appeal by notice dated 19.02.2023. The said notice has been placed on record by the standing counsel on behalf of the respondent by Ext.R1(a).

4. In pursuance to the said notice, the petitioner opted for personal hearing and also intimated the authorised person who will attend the virtual hearing through video conference. However, no link was generated for availing the said opportunity of virtual hearing to the petitioner and he had not subscribed to the personal hearing through video conferencing in the prescribed form.

5. It is not in dispute that the petitioner had made the request, also the credential of authorised representative along with his e-mail ID while intimating to the Department, but the virtual hearing has been denied only on the ground that it was not in the prescribed form.

6. The form in which the virtual hearing has to be subscribed is a matter of procedure and not a substantive law. The procedure is always handmade for doing the complete justice between the parties. Procedure cannot take away the substantive right of a person, if the person is otherwise eligible for substantive right of personal hearing. Considering this aspect, the petitioner was not afforded an opportunity of being heard. The present writ petition is allowed and the impugned order is set aside and the matter is remanded back to the 2^nd respondent to issue fresh notice to the petitioner for availing the opportunity of personal hearing and this time, the petitioner should not commit any mistake. He should opt for personal hearing in prescribed form.

With the afore said direction, the present writ petition stands allowed.