2023 (11) TMI 129 - HC - Income Tax

Validity of order u/s 119(2)(b) - Rejection of request for Condonation of delay in filing of Income Tax Return (ITR) - Non speaking order - violation of principles of natural justice in view of the fact that opportunity of personal hearing was not granted nor has materials relied upon been furnished - HELD THAT - As reading impugned order would reveal that it only contains the conclusion without assigning any reasons in support thereof. In other words, the impugned proceeding is non-speaking. The nature of the power/ function discharged by the Respondents in exercise of its power u/s 119(2)(b) of the Act is quasi-judicial in nature and thus ought to be made in compliance with principles of natural justice which inter-alia requires the authority to grant a reasonable opportunity apart from assingning reasons. In other words, an order u/s 119(2)(b) of the Act ought to be a speaking order. This Court finds that the impugned order is made in violation thereof, in view of the fact that the impugned order does not assign reason but only contains the conclusion, in other words non-speaking and thus unsustainable. The impugned order is thus set-aside and the Respondents are directed to consider the petitioner's application under Section 119(2)(b) after granting a reasonable opportunity of hearing within a period of 8 weeks from the date of receipt of a copy of this order and pass a speaking order.

Summary

Issues:
The judgment involves a challenge to an order under Section 119(2)(b) of the Income Tax Act, 1961 on the grounds of violation of principles of natural justice and the non-speaking nature of the impugned order.

Violation of Principles of Natural Justice:
The petitioner challenged the order under Section 119(2)(b) of the Act, contending that there was a violation of principles of natural justice as no opportunity of personal hearing was granted, and the materials relied upon were not furnished. The petitioner argued that such orders should be passed in compliance with principles of natural justice, as they are quasi-judicial in nature.

Contentions of the Parties:
The petitioner's counsel argued for compliance with principles of natural justice, while the Respondents' counsel argued against the plea of violation of principles of natural justice based on the counter submitted.

Nature of the Impugned Order:
The impugned order was found to be non-speaking as it only contained the conclusion without assigning any reasons in support thereof. This lack of reasoning rendered the order unsustainable.

Quasi-Judicial Nature of the Power:
The Court referred to previous decisions to establish that the power under Section 119(2)(b) of the Act is quasi-judicial in nature, requiring compliance with principles of natural justice. The Court emphasized the need for a speaking order with reasons provided.

Judicial Precedents:
The judgment of the Karnataka High Court was cited to support the quasi-judicial nature of the power under Section 119(2)(b) of the Act. The Division Bench of the Madras High Court also upheld the requirement for reasons in quasi-judicial orders under Section 119(2)(a) of the Act.

Decision of the Court:
The Court held that the impugned order was made in violation of principles of natural justice due to its non-speaking nature. Consequently, the order was set aside, and the Respondents were directed to reconsider the petitioner's application under Section 119(2)(b) of the Act after granting a reasonable opportunity of hearing and passing a speaking order within a specified timeframe. The writ petition was disposed of with no costs incurred.