2022 (5) TMI 525 - HC - Income Tax

Penalty u/s 271(1)(c) - Violation of principle of natural justice - non considering of replies to notices - HELD THAT - This court finds that the petitioner had filed his replies to the notices issued to him by the respondents. Despite filing of the said replies, the same were not considered while passing the impugned order. In fact the impugned order states that despite giving several opportunities the petitioner had not filed any reply/response. This Court in Bharat Aluminium Company Ltd. vs. Union of India Ors. 2022 (1) TMI 658 - DELHI HIGH COURT has laid down that an assessee has a vested right to personal hearing and the same has to be given if such a request is made by the assessee. Consequently, the impugned order is set aside on the ground that it is violative of the principle of natural justice and the matter is remanded back to the respondent no.2 for fresh adjudication. The respondent no.2 shall grant a hearing to the petitioner before passing an order. The respondent no.2 is directed to decide the matter in accordance with law within twelve weeks

Summary

Issues:
Challenge to Penalty Order under Section 271(1)(c) of Income Tax Act, 1961 for Assessment Year 2015-16.

Analysis:

The petitioner filed a writ petition challenging the Penalty order dated 7th February, 2022 under Section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2015-16. The petitioner's counsel argued that the replies filed by the petitioner were not considered before levying the penalty, despite being submitted on specific dates. Additionally, the petitioner was not granted a personal hearing despite repeated requests. The court took note of the petitioner's submissions and found that the replies were indeed filed by the petitioner, contradicting the statement in the impugned order that no replies were received. The court referred to the case of Bharat Aluminium Company Ltd. vs. Union of India & Ors., which established that an assessee has a right to a personal hearing upon request. Consequently, the court set aside the impugned order on the grounds of violating the principles of natural justice and remanded the matter back to the respondent for fresh adjudication. The respondent was directed to grant a hearing to the petitioner before passing a new order, with a deadline of twelve weeks for the decision to be made. The writ petition and applications were disposed of with these directions.