2020 (8) TMI 101 - HC - Income Tax

Violation of principles of natural justice - ITO has issued a show cause notice BUT order has been passed on even prior to the date fixed for the hearing - HELD THAT - Since the show cause notice issued clearly stipulates the date of hearing as 04.12.2019, the assessee/petitioner has a legitimate expectation that he would be heard on that date and that an order of assessment will be passed only thereafter. In the light of the aforesaid, this writ petition is allowed and the impugned order of assessment is set aside. The respondent officer will conduct personal hearing on 13.08.2020 at 10 30 a.m. by video conferencing.

Summary

Issues Involved:
Violation of principles of natural justice in completing assessment under the Income Tax Act, 1961 due to premature order issuance before the scheduled hearing date.

Detailed Analysis:

Issue 1: Violation of Principles of Natural Justice
The primary issue in this case revolved around the violation of principles of natural justice during the assessment for the year 2017-18 under the Income Tax Act, 1961. The Officer had issued a show cause notice with a scheduled personal hearing on 04.12.2019 at 11:00 a.m. However, the order was passed prematurely on 03.12.2019, even before the fixed hearing date. The petitioner contended that this premature order issuance infringed upon their right to be heard and participate in the assessment process.

Counter Statement by Revenue
In response to the allegations, the Revenue clarified that the reference to 04.12.2019 in the notice was a typographical error. They asserted that the hearing had actually been concluded on 29.11.2019 itself. Despite this explanation, the petitioner's legitimate expectation based on the notice's specified hearing date remained a crucial aspect of the case.

Court's Decision and Order
Considering the circumstances, the Court found merit in the petitioner's argument regarding the violation of natural justice principles due to the premature order issuance. Consequently, the Court allowed the writ petition and set aside the impugned order of assessment. The respondent officer was directed to conduct a fresh personal hearing on 13.08.2020 at 10:30 a.m. via video conferencing, as preferred by both counsels. The Court mandated that an order of assessment must be passed within four weeks from the date of the concluded personal hearing, ensuring compliance with legal procedures. The Court also mentioned the closure of connected miscellaneous petitions without any costs imposed.

This detailed analysis encapsulates the core issues and the comprehensive judgment rendered by the High Court, emphasizing the importance of procedural fairness and adherence to principles of natural justice in the assessment process under the Income Tax Act, 1961.