Case Law Details
Thirukochi Motor Vehicle Owner’s Credit Cooperative Society Ltd Vs ITO (Kerala High Court)
In a significant ruling, the Kerala High Court recently addressed the issue of procedural fairness under Section 148A(b) of the Income Tax Act, 1961. The case, Thirukochi Motor Vehicle Owner’s Credit Cooperative Society Ltd vs Income Tax Officer, revolves around the denial of an opportunity of hearing to the petitioner before passing an order under Section 148A(b).
The petitioner, Thirukochi Motor Vehicle Owner’s Credit Cooperative Society Ltd, challenged the validity of Ext.P6 order issued by the Income Tax Officer. The crux of the matter was the failure to provide a hearing, which is explicitly mandated under Section 148A(b) of the Income Tax Act. This section requires that the assessee be served a notice to show cause within a specified time frame, allowing them an opportunity to present their case before any adverse action is taken.
The High Court examined the provisions of Section 148A(b), emphasizing that the opportunity of being heard is a fundamental aspect of natural justice. It noted that the petitioner was not afforded this opportunity before the issuance of Ext.P6 order. As a result, the court held that Ext.P6 order was passed in violation of the principles of natural justice and, accordingly, set it aside.
The court’s decision underscores the importance of procedural fairness in administrative actions, especially in matters involving taxation. By nullifying Ext.P6 order, the Kerala High Court reaffirmed the right of an assessee to be heard before any adverse decision is made affecting their tax liabilities.
In conclusion, the Kerala High Court’s ruling in Thirukochi Motor Vehicle Owner’s Credit Cooperative Society Ltd vs Income Tax Officer serves as a reminder of the constitutional guarantee of fair procedure. The court’s directive to the 1st respondent to pass fresh orders after affording the petitioner a proper hearing reflects a commitment to upholding principles of natural justice in the realm of taxation.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner has filed this writ petition challenging Ext.P6 order issued by the 1st respondent under Section 148A (b) of the Income Tax Act, 1961 contending that the petitioner was not given an opportunity of hearing before passing the said order.
2. Section 148 A (b) of the Income Tax Act reads as follows:-
“Provide an opportunity of being heard to the assessee, 1[xxxx] by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);
3. Opportunity of personal hearing is explicit in Section 148A (b) of the Act. It is not disputed that the petitioner was not given an opportunity of hearing before passing Ext.P6 order. Ext.P6 order is set aside, being one passed in violation of the principles of natural justice. The 1st respondent shall pass fresh orders pursuant to Ext.P4 notice after hearing the petitioner, expeditiously.
The writ petition is disposed of.
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