2019 (8) TMI 243 - HC - Income Tax

Opportunity of personal hearing before the Appellate Authority - notice of hearing unserved - HELD THAT - This is a case where, it is mentioned in the impugned orders that notice of hearing was sent to the writ petitioner, but the same was returned unserved. This according to the impugned orders was on 19.02.2019. Though it is mentioned in impugned orders that notices remained unserved, it has also been recorded in the impugned orders that an adjournment was sought on 08.03.2019. Learned Revenue counsel, pointing out this aspect of the matter, submitted that it cannot be gainsaid that the writ petitioner has not been given an opportunity as the writ petitioner has sought adjournment. However, the writ petitioner contends that the notices said to have been sent regarding personal hearing were never served on the writ petitioner and therefore, contentions to the contrary are untenable. Without entering upon the factual dispute and embarking upon the exercise of resolving the factual dispute regarding service of notice regarding personal hearing, this Court is of the considered view that it would serve the ends of justice and would serve the purpose of the writ petitioner assessee as well as protect the interests of revenue, if one opportunity of personal hearing is granted to the writ petitioner. This course is being adopted as there is no disputation that it is statutorily imperative to give a personal hearing, while disposing of an appeal u/s 250. This Court is of the considered view that it would be appropriate to put the writ petitioner on terms or in other words, it would be appropriate to direct the writ petitioner to pay costs as a condition precedent for the personal hearing. To be noted, this was the alternate submission of Revenue counsel made without prejudice to the main contention.

Summary

Issues:
1. Opportunity of personal hearing before the Appellate Authority.

Analysis:
The case involves a Partnership Firm engaged in the production and distribution of Motion Pictures, which filed returns for Assessment Years 2008-2009 and 2009-2010 under Section 143(3) of the Income Tax Act, 1961. The writ petitioner was aggrieved by the assessment orders and filed statutory appeals under Section 250 of the IT Act. The main contention raised in the writ petitions was the lack of an opportunity for personal hearing before the Appellate Authority, which is deemed statutorily imperative under Sub Sections 1 and 2 of Section 250 of the IT Act.

The impugned orders mentioned that a notice of hearing was sent to the writ petitioner but was returned unserved. Despite this, an adjournment was sought by the writ petitioner. The Revenue counsel argued that the writ petitioner had sought an adjournment, indicating an opportunity for a hearing. However, the writ petitioner claimed that the notices for personal hearing were never served, making the contentions of the Revenue counsel untenable. The Court acknowledged the statutory requirement of providing a personal hearing and decided to grant the writ petitioner one opportunity for a personal hearing, emphasizing the importance of procedural fairness in such matters.

To ensure compliance and protect the interests of both parties, the Court directed the writ petitioner to pay costs as a condition precedent for the personal hearing. The impugned orders were set aside without expressing any opinion on the merits of the case, solely to facilitate the necessary personal hearing. The writ petitioner was instructed to pay costs within a specified timeframe, failing which the impugned orders would stand revived. Additionally, the Court outlined the procedure to be followed if the writ petitioner availed the personal hearing, emphasizing the need for a fresh consideration of the appeals by the Appellate Authority.

In conclusion, the Court disposed of the writ petitions with the outlined directions, ensuring that procedural fairness was maintained by granting the writ petitioner an opportunity for a personal hearing before the Appellate Authority. The case was closed, with the matters listed for compliance reporting at a later date to monitor adherence to the Court's directives.