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2021 (10) TMI 426 - HC - Income TaxRevision u/s 264 - As argued impugned order is an ex parte order and is violative of principle of natural justice - HELD THAT - A perusal of the impugned order dated 18.03.2021 reveals that the respondent no.1, while passing it, has not recorded any speaking reason for dismissing the revision filed by the petitioner and the impugned order dated 18.03.2021 has only been passed on the ground that the assessee/petitioner has failed to submit any reply in response to the office letter re-fixing the case. It is a settled legal proposition that not only administrative but also judicial order must be supported by reasons, recorded in it. Thus, while deciding the issue, the Court is bound to give reasons for its conclusion and it is the duty and obligation on the part of the Court to record reasons while disposing of the case. As particularly the fact that the impugned order dated 18.03.2021 is a non-speaking order, the order dated 18.03.2021 passed by the respondent no.1 is hereby set-aside. The petitioner is directed to file reply in the revision filed under Section 264 of the Income Tax Act within two weeks from today.
Issues:
Challenge to order under Section 264 of the Income Tax Act, 1961 and assessment order under Section 144 for Assessment Year 2017-18. Analysis: The petitioner, a government-aided degree college, challenged the orders dated 18.03.2021 and 30.10.2019 under Sections 264 and 144 of the Income Tax Act, 1961 respectively. The petitioner contended that its income was exempt under Section 10(23C)(iiiab) and raised objections regarding the assessment proceedings. The petitioner argued that notices were not received, and technical glitches hindered timely responses. Despite submitting a reply, the assessment was completed ex parte, resulting in an income assessment of ?77,43,320. Subsequently, penalty notices were issued, and a revision under Section 264 was filed, which was dismissed on the grounds of lack of response. The petitioner argued that participation in assessment proceedings through e-response was disregarded, leading to an arbitrary and illegal assessment. The respondent's admission of receiving the reply was highlighted, emphasizing the violation of natural justice principles in passing a non-speaking order. The petitioner cited precedents and readiness to submit a reply in the revision under Section 264, challenging the ex parte nature of the impugned order. The Court noted the absence of reasons and consideration of evidence in the impugned order, rendering it unsustainable. Citing legal precedents, the Court emphasized the necessity of recording reasons in administrative and judicial orders. Considering the lack of a speaking order and violation of natural justice, the impugned order dated 18.03.2021 was set aside. The petitioner was directed to file a reply within two weeks in the revision under Section 264, and the matter was remanded for fresh consideration by the respondent, ensuring due process and expeditious resolution. In conclusion, the writ petition challenging the orders under Sections 264 and 144 of the Income Tax Act, 1961 for the Assessment Year 2017-18 was disposed of, with directions for reconsideration in light of the Court's observations regarding procedural fairness and legal requirements.
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