2003 (7) TMI 40 - HC - Income Tax

Commissioner of Income-tax disposed of revisions filed under section 264 against the assessment order passed on March 12, 1997, for the assessment year 1988-89 - Seizure of cash - CIT deciding the revisions ex parte in the absence of the petitioners or their counsel as on the date fixed, i.e., November 30, 1999, as none appeared before the Commissioner of Income-tax - petitioners have come forward with specific allegation that an adjournment was sought on November 30, 1999 - At the most November 30, 1999, was the second date fixed for hearing. In this view of the matter, it is in the interest of justice that a fresh opportunity of hearing should be afforded to the petitioners. Order of commissioner is not correct

Summary

Issues involved:
Challenge to order of Commissioner of Income-tax under section 264 of the Income-tax Act, 1961 for assessment year 1988-89 based on lack of proper hearing and adjournment denial.

Analysis:
The judgment pertains to a writ petition seeking to quash the order passed by the Commissioner of Income-tax concerning five revisions filed under section 264 of the Income-tax Act, 1961 for the assessment year 1988-89. The revisions were disposed of ex parte on November 30, 1999, in the absence of the petitioners or their counsel. The petitioners contended that they were not given a fair opportunity as the adjournment application was not entertained, leading to the decision being made ex parte. The petitioners highlighted that they sought an adjournment due to inadequate time for case preparation and engaged a chartered accountant for this purpose. However, the Commissioner refused the adjournment request and proceeded to decide the matter on its merits. The petitioners emphasized that they were not prepared to argue the case on the merits and, therefore, were deprived of a proper hearing.

The court examined the conflicting claims regarding the adjournment sought by the petitioners on November 30, 1999. The petitioners asserted that an adjournment was requested, supported by affidavits filed by the chartered accountant and one of the petitioners. On the other hand, the Department's counter affidavits denied the adjournment application on that date. The court noted discrepancies in the Department's version, questioning how an Income-tax Inspector could claim personal knowledge of events before the Commissioner. Considering the lack of mala fides and the petitioners' potential prejudice due to the delay, the court deemed it just to grant a fresh opportunity of hearing to the petitioners.

The judgment emphasized the importance of deciding disputes on their merits after providing a fair hearing to all parties. Citing relevant legal precedents, the court advocated a liberal and justice-oriented approach in such matters. Consequently, the court allowed the writ petition, quashed the impugned order of November 30, 1999, and directed the Commissioner to rehear and decide the revisions after affording the petitioners a proper opportunity of hearing. The court cautioned the petitioners against seeking unnecessary adjournments and instructed them to cooperate for the timely resolution of the revisions, empowering the Commissioner to take appropriate action in case of unwarranted delays.