2014 (7) TMI 432 - HC - Income Tax

Stay application Violation of principle of natural justice opportunity of being heard Held that - Revenue has not afforded an opportunity of personal hearing to the assessee even though it was specifically requested, thus, the order passed is against the principles of natural justice - pursuant to the demand made, assessee has already paid 50% of the same thus, the revenue is directed to dispose of the appeal as expeditiously as possible and pass orders on merits and in accordance with law after affording an opportunity of personal hearing to the assessee - there shall be an order of stay of the demand till the disposal of the appeal alone Stay granted.

Summary

Issues:
Challenge to impugned proceedings under Section 220(6) of the Income Tax Act, 1961 for assessment year 2011-12.

Analysis:
The petitioner, a Charitable trust, filed a writ petition to challenge the proceedings under Section 220(6) of the Income Tax Act, 1961 for the assessment year 2011-12. The petitioner contended that despite requesting a personal hearing, the respondent passed the impugned order without affording the opportunity, which goes against the principles of natural justice. The petitioner had filed its return of income as Nil for the assessment year, which was selected for scrutiny. The respondent completed the assessment without a personal hearing, leading to the present petition.

Analysis:
The petitioner's counsel argued that the petitioner had paid 50% of the total demand following the demand notice and had also preferred an appeal. The respondent, represented by the Standing counsel, acknowledged the pending appeal and the partial payment made by the petitioner. The Court carefully considered the submissions from both sides.

Analysis:
The Court noted that the respondent failed to provide a personal hearing to the petitioner, despite the specific request, violating the principles of natural justice. Acknowledging that the petitioner had already paid 50% of the demand, the Court directed the respondent to expedite the disposal of the appeal and pass orders after affording a personal hearing to the petitioner. The Court ordered a stay of the demand until the appeal's disposal, emphasizing the importance of due process and fair treatment.

Analysis:
In conclusion, the High Court disposed of the writ petition, emphasizing the need for a fair hearing and directing the respondent to decide on the appeal promptly and in accordance with the law. The Court ordered a stay on the demand until the appeal's resolution, ensuring the petitioner's rights are protected. No costs were awarded, and the connected miscellaneous petitions were closed as a result of the judgment.