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.
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