Violation of principle of Natural Justice: Calcutta High Court Sets Aside Tax Order

Anuj Bakshi Vs ACIT (Calcutta High Court)

Introduction: The Calcutta High Court recently set aside an order passed under Sections 143(3) and 144B of the Income Tax Act of 1961, citing the violation of principles of Natural Justice. The petitioner, Anuj Bakshi, was denied the opportunity to participate in a hearing concerning his tax assessment. This article delves into the details and implications of this case, exploring how the court’s decision may set a precedent for future cases involving similar issues.

The Background: Anuj Bakshi challenged an impugned tax assessment order dated December 26, 2022, on the grounds that he was denied the opportunity to participate in the assessment hearing. Despite receiving a notice and a link for a video conference hearing, Bakshi was unable to access the conference due to technical issues. The court took into account the evidence presented by Bakshi, including screenshots showing a blank screen during the time of the hearing.

The Ruling: The Hon’ble Court decided to set aside the impugned order solely based on the violation of the principle of Natural Justice. It was observed that Bakshi was not at fault for his inability to participate in the hearing. The Court directed that the matter be sent back to the assessing officer for reconsideration, emphasizing that a new order should be passed after giving Bakshi or his authorized representative an opportunity to be heard.

Legal Implications: The decision has significant implications for the broader legal landscape. It reinforces the importance of the principle of Natural Justice in legal proceedings, especially those concerning individuals’ financial matters.

Without Going Into Merit: It’s important to note that the Court explicitly stated that it was setting aside the order without going into the merit of the original assessment order, indicating that the assessing officer should reconsider the case strictly according to the law.

Conclusion: The Calcutta High Court’s decision in Anuj Bakshi Vs ACIT serves as a noteworthy reminder of the importance of upholding principles of Natural Justice in legal proceedings. The Court set aside the Income Tax assessment order, emphasizing that every individual has the right to be heard. While the Court refrained from commenting on the merits of the original assessment, the case has nevertheless laid down an important marker for future legal proceedings of a similar nature.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

The Court: Heard learned Advocates appearing for the parties. By this writ petition, petitioner has challenged the impugned order dated 26^th December, 2022, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, on the ground of violation of principles of Natural Justice by denying to participate in the proceeding for hearing in the impugned assessment proceeding. It appears from record that notice of hearing through video conference was fixed at 12.30 p.m. on 22ⁿd December, 2022 and a link was sent on 22ⁿd December, 2022, to the petitioner which appears from pages 102 and 103 of the writ petition. It is the case of the petitioner that in spite of fixing the time of hearing and providing the link by the Department, no access could be made for video conference and in support of such allegation by the petitioner, petitioner has annexed screenshot copies from his computer which appears at pages 105,106 and 107 of the writ petition showing the blank screen at the time of hearing.

Considering the facts and circumstances of the case, as appears from record that admittedly petitioner could not participate in the hearing for the assessment in question for no fault of him, in the interest of Justice, aforesaid impugned order dated 26^th December, 2022 is set aside and the matter is remanded back to the assessing officer concerned to pass a fresh speaking order after giving opportunity of hearing to the petitioner or his authorised representative.

It is clarified that this Court is setting aside the impugned order only on the ground of violation of principle of Natural Justice without going into the merit of the impugned assessment order which shall be reconsidered by the assessing officer strictly in accordance with law.

With this observations and directions the writ petition being WPO/151/2023 stands disposed of.