Show Cause Notice Isn’t a Denial of Hearing: Madras HC

Lakshmi Jalladianpettai Lakshmanan Vs ITO (Madras High Court)

Introduction: The Madras High Court recently addressed a crucial aspect related to income tax proceedings in the case of Lakshmi Jalladianpettai Lakshmanan vs. ITO. The court dismissed a writ petition challenging a show cause notice issued under Section 148(A) of the Income Tax Act, 1961.

Detailed Analysis: The petitioner received the notice due to non-filing of the income tax return for the Assessment Year 2016-17. The primary contention was regarding the sale of land, specifically an irrigation land measuring 29 cents located beyond the city limits. The petitioner responded to the notice, highlighting the nature of the land sold.

The petitioner’s grievance centered around the issuance of the notice under Section 148(A) without considering their response. The petitioner argued that the assessing authority had not provided an opportunity for a personal hearing and had not taken into account the nature of the land sold.

In response, the standing counsel for respondents 1 & 2 clarified that the order in question was merely a show cause notice. The counsel assured that the petitioner would have a proper opportunity for a personal hearing before any final order was passed.

The High Court, after considering arguments from both sides and examining the available records, affirmed that the impugned order was indeed a show cause notice. The court emphasized that the petitioner had not availed the opportunity to file a response before approaching the court. The dismissal of the writ petition was accompanied by granting the petitioner the liberty to submit a proper response to the show cause notice.

Conclusion: In conclusion, the Madras High Court clarified that a show cause notice does not imply a denial of hearing. The dismissal of the writ petition signifies that the petitioner has the opportunity to address the concerns raised in the notice by filing a proper response. The court directed the assessing authority to pass final orders within twelve weeks after affording the petitioner an opportunity for a personal hearing in accordance with the law. This decision underscores the importance of exhausting available remedies within the statutory framework before seeking judicial intervention.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

Aggrieved by the show cause notice issued under Section 148A of the Income Tax Act, 1961, the petitioner is before this Court.

2. Mr. Dr .B. Ramasamy, learned standing counsel takes notice on behalf of respondents 1 & 2.

3. The case of the petitioner is that the petitioner has received the notice on the ground that the petitioner is has not filed return of income for the Assessment year 2016-17 and has not returned the income from sale of The assessee has responded to to the notice stated that the land sold was an irrigation land admeasuring 29 cents, situated beyond the city limit. The grievance of the petitioner is the without considering the response of the petitioner, the 1^st respondent has issued notice under Section 148(A) of the Act as to why the petitioner should not be chargeable to the tax for the escaped assessment. Aggrieved by the same, the petitioner has filed this Writ Petition challenging the said notice.

4. Learned counsel for the petitioner submits that the respondent has passed an order without affording an opportunity of personal hearing to the petitioner to put forth his case. Further, the respondent has not considered the case of the assessee which indicates that the land sold was an irrigation land situated beyond the city limit.

5. Per contra, learned standing counsel appearing for respondents 1&2 submits that it is only a show cause notice that has been issued. The impugned order is only a show cause notice and the petitioner will be provided sufficient opportunity of personal hearing before passing any final order. However, the petitioner has hurriedly approached this Court.

6. This Court heard the learned counsel appearing on either side and perused the materials available on record.

7. Admittedly, the impugned order is only a show cause notice granting the petitioner a time to file a response or reply. Without filing any response to the notice, the petitioner has approached this Court on the assumption that the respondents will not provide any opportunity of personal hearing to the petitioner.

8. Hence, this Writ Petition stands dismissed granting liberty to the petitioner to approach the 1^st respondent by filing a proper response to the show cause notice. Upon receipt of such response, the 1^st respondent is directed to pass final orders within a period of twelve weeks after affording an opportunity of personal hearing to the petitioner in accordance with law. There shall be no order as to Consequently, connected Miscellaneous Petitions are closed.