2024 (12) TMI 773 - HC - Income Tax

Violation of the mandates of Section 250 - specific notice for hearing had not been issued to the appellant prior to the issuance of Ext.P8 order which is under challenge - Appellant's regular adjournment requests and failure to produce supporting documents - HELD THAT - Though the appellant was repeatedly called upon by the NFAC to produce the supporting documents if any, he had not chosen to produce any such documents and had only kept on seeking adjournments purportedly for the said production of documents. Hence the contention of the appellant that Ext.P8 order had been issued without affording him an opportunity to be heard and that it violated the principles of natural justice cannot be countenanced. As regards the contention based on Section 250 of the IT Act that the said provision mandates the issuance of a separate notice for hearing and that such a notice was never issued to the appellant before the issuance of Ext.P8 order, the same is also not sustainable. A perusal of Exts.P4 and P6 notices issued to the appellant reveal that the same have been issued under Section 250 of the IT Act. The said notices satisfy all the mandates of the said section. They carried the forewarning as mentioned above, explicitly conveying that the same has been issued with respect to the hearing envisaged under Section 250 of the Act. The said fact, having been clearly expressed on the face of the notice itself, there was no scope to contend that the said notices were issued under Section 150 (4) as part of the inquiry that would be conducted by the Commissioner (Appeals) under the said sub-section. Nor was there any cause or reason to believe that a separate notice for hearing would be issued to the appellant by the NFAC. We thus note that the learned Single Judge had correctly concluded that in the facts and circumstances, the appellant could not harbor a grievance that he was not afforded an opportunity to file written submissions and supporting documents. The finding of the learned Judge that a person who fails to avail the opportunity granted to him to make submissions and produce documents in support of thereof cannot complain about the violation of natural justice is justified and well-founded. Appellant, who had been consistently seeking time since 31.07.2023 onwards purportedly for the production of documents to support his contentions in the appeal, had not chosen to prove his bonafides by producing the said documents along with the Writ Petition or even when the above Writ Appeal was filed by him. This gives credence to the contention put forth by the learned Standing Counsel for the respondents that the appellant had only been garnering time and was using the adjournment applications merely as a delay tactic. We find no reason to interfere with the judgment of the learned Single Judge, save to modify the latter part of the judgment that requires the appellant to remit 20% of the disputed tax as a pre-condition for filing a stay petition along with the appeal before the Appellate Tribunal.

Summary

Issues:
Violation of Section 250 of the IT Act in issuing Ext.P8 order without a separate notice for hearing.
Alleged lack of opportunity for the appellant to present written submissions and supporting documents.
Contention of malafides and lack of fairness in Ext.P8 order.
Interpretation of notices issued by NFAC under Section 250 of the IT Act.
Appellant's consistent adjournment requests and failure to produce supporting documents.
Validity of the judgment of the learned Single Judge.

Analysis:
The appellant challenged the judgment dismissing the Writ Petition, seeking to quash Ext.P8 order issued by the NFAC and mandamus for personal hearing. The appellant argued a violation of Section 250 of the IT Act due to the absence of a separate notice for hearing before issuing Ext.P8. The respondent contended that the appellant consistently sought adjournments to produce documents without doing so, implying a waiver of rights. The NFAC issued notices requiring written submissions and documents, granting adjournments upon request. The learned Single Judge permitted the appellant to appeal before the Tribunal, directing an expedited process, and stay application upon depositing 20% of assessed tax.

The NFAC issued notices under Section 250 of the IT Act, explicitly stating the purpose and consequences of non-compliance. The appellant repeatedly requested adjournments for document production, but failed to submit any documents despite the opportunities granted. The respondent argued that the appellant's conduct indicated a delay tactic rather than genuine efforts to present evidence. The learned Single Judge's decision was based on the appellant's failure to utilize the opportunities provided for submission of documents and contentions.

The appellant's argument regarding the lack of a separate notice for hearing under Section 250 was deemed unsustainable. The notices issued by NFAC satisfied the requirements of Section 250, clearly indicating the purpose and consequences of non-compliance. The appellant's failure to produce documents despite multiple adjournments indicated a lack of genuine intent. The judgment of the learned Single Judge was upheld, except for the modification of the requirement to deposit 20% of the disputed tax for filing a stay petition before the Appellate Tribunal.

The Court found no reason to interfere with the learned Single Judge's decision, emphasizing the importance of utilizing opportunities to present evidence and submissions. The appellant was directed to file an appeal and stay application within three weeks, with recovery steps suspended until the Tribunal's decision. The judgment was disposed of without costs.