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Issues: Violation of principles of natural justice regarding opportunity of hearing; Commissioner of Income-tax's directive leaving no discretion to Income-tax Officer.
In this judgment delivered by Justice T. S. Doabia of the High Court of Madhya Pradesh, the primary issue revolves around the violation of principles of natural justice concerning the opportunity of hearing. The petitioner contended that the Commissioner of Income-tax, Bhopal, directed the Income-tax Officer to pass an order in a specific manner without leaving any discretion to the Officer, which was deemed contrary to natural justice and the procedure followed by quasi-judicial Tribunals. The petitioner also argued that not being afforded a personal hearing further exacerbated the situation, despite submitting written submissions. Justice Doabia acknowledged that the mere filing of written submissions did not absolve the need for a personal hearing, which prejudiced the petitioner's case. Regarding the grant of a hearing, Justice Doabia referenced the views expressed by Professor H. W. R. Wade and a Supreme Court case, emphasizing the importance of natural justice at both initial and appellate stages. The judgment highlighted that a post-decisional hearing cannot fully substitute the denial of a right to a hearing at the initial stage. Citing legal precedents, it was underscored that a reasonable opportunity to present one's case must be provided at the appellate stage, especially after certain legal amendments. Consequently, due to the violation of natural justice principles in not affording a proper hearing, the Court deemed it appropriate to direct the Commissioner of Income-tax, Bhopal, to rehear the matter and issue fresh orders. Another critical issue addressed in the judgment was the directive issued by the Commissioner of Income-tax, which left no room for the Income-tax Officer to exercise discretion in decision-making. Justice Doabia noted that such a directive, mandating a specific outcome, undermined the principles of natural justice. Consequently, the Court quashed the orders passed by the Commissioner of Income-tax and the subsequent orders by the Income-tax Officer, sending the case back to the Commissioner for a rehearing to ensure a fair and unbiased decision-making process.
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