2019 (5) TMI 346 - AT - Income Tax

Principles of natural justice denied - Rectification u/s 154 - no opportunity to represent the case to assessee - in CIT(A) order, it does not reflects that the notices of the hearing have ever been served upon the assessee or not and even mode of service has not been specified - HELD THAT - The principle of Audi Alteram Partem is the basic concept of the principle of natural justice and has not evolved from the constitution but evolved through civilization and mankind and is the concept of common law, which implies fairness, reasonableness, equality and equity. In India, the principles of natural justice are the grounds of Article 14 and 21 of the Constitution. Article 14 enshrines that every person should be treated equally. In the landmark case of Maneka Gandhi vs. The Union of India 1978 (1) TMI 161 - SUPREME COURT it has been held by Constitution Bench of the Apex Court that the law and procedure must be of a fair, just and reasonable kind. The doctrine ensures a fair hearing and fair justice to both the parties. Under this doctrine, both the parties have the right to speak. The aim of this principle is to give an opportunity to the parties to defend themselves. Before the court, both the parties are equal and are entitlement of equal opportunity to represent them. If the order is passed by the authority without providing the reasonable opportunity of being heard to the person affected by it adversely will be invalid and shall be liable to be set aside. Coming to the instant case, the principles of natural justice have not been followed, as it is fundamental principle of law that no one can be remain un-heard, therefore in the peculiar facts of circumstances of the case, we are inclined to set aside the order passed by the CIT(A) and restore the matter back to the file of the CIT(A) for decision afresh, suffice to say while affording proper opportunities of being heard to the assessee. We also direct the Assessee/Appellant to extend its full cooperation and participation in the appellate proceedings before the CIT(A) as and when required and in case of further default, the assessee shall not be subjected to any leniency. Appeals filed by the Assessee/Appellant stands allowed for statistical purposes.

Summary

Issues: Compliance with principles of natural justice in appellate proceedings.

In the judgment delivered by the Appellate Tribunal ITAT Jodhpur, the appeal was filed by the Assessee against an order passed by the Ld. CIT(A)-Ajmer affirming the order passed under section 154 of the Income Tax Act, 1961 by the DCIT, Central Circle-1, Udaipur. The Tribunal noted that the Ld. CIT(A) had fixed the appellant proceedings on various dates, but it was observed that the assessee did not attend the proceedings nor filed any written submission. The Tribunal highlighted the importance of the principles of natural justice, emphasizing that every person has the right to be heard when allegations are made against them. The Latin maxim "Audi Alteram Partem" meaning 'hear the other side' was referenced, stressing the need for fairness, reasonableness, equality, and equity in legal proceedings. The Tribunal pointed out that failure to provide a reasonable opportunity of being heard renders an order invalid and liable to be set aside. Citing the landmark case of 'Maneka Gandhi vs. The Union of India', the Tribunal reiterated the importance of fair procedures and equal treatment under Articles 14 and 21 of the Constitution. Therefore, in the absence of compliance with the principles of natural justice in the instant case, the Tribunal set aside the order passed by the Ld. CIT(A) and remanded the matter for fresh consideration, emphasizing the need to afford proper opportunities of being heard to the assessee.

The Tribunal directed the Assessee to fully cooperate and participate in the appellate proceedings before the Ld. CIT(A) in the future. It was emphasized that failure to cooperate would result in the assessee not being granted any leniency. Ultimately, the Tribunal allowed the appeals filed by the Assessee for statistical purposes, indicating that the decision was made in the open court on a specific date.