2025 (1) TMI 1499 - HC - Income Tax

Validity of Tribunal order in breach of principles of natural justice - HELD THAT - There is no dispute that the facts in the present appeal and those in the connected appeals are identical. Therefore for the reasons we have recorded in our order disposing of the three connected appeals we allow this appeal by passing the following order as order is dated 31 March 2017 2017 (3) TMI 1959 - ITAT MUMBAI set aside and the matter is remanded to the tribunal for fresh consideration in accordance with law and on its own merits.

ISSUES PRESENTED and CONSIDERED

The core legal question considered in this judgment is whether the Appellate Tribunal's order dated 31 March 2017 was passed in breach of the principles of natural justice. This issue is central to the appeal and is the basis for the court's decision to set aside the impugned order.

ISSUE-WISE DETAILED ANALYSIS

Violation of Principles of Natural Justice

Relevant Legal Framework and Precedents

The principles of natural justice are fundamental to the legal system and require that parties be given a fair opportunity to present their case. This includes the right to a fair hearing and the right to be heard. The breach of these principles can result in the setting aside of decisions made by judicial or quasi-judicial bodies.

Court's Interpretation and Reasoning

The Court identified that there was a substantial question of law regarding whether the Appellate Tribunal's order was issued in violation of natural justice. The Court noted that the facts of the present appeal were identical to those in the connected appeals, which had been disposed of on the same day. The Court's reasoning was based on the need to ensure that the principles of natural justice were upheld, and it found that the Tribunal's order did not meet these standards.

Key Evidence and Findings

The Court observed that there was confusion regarding the status of the Income Tax Appeal No. 911 of 2018, which was wrongly shown as disposed of. The Court clarified that no such dismissal order existed and that the appeal was still pending. This confusion contributed to the Court's decision to set aside the Tribunal's order.

Application of Law to Facts

The Court applied the principles of natural justice to the facts of the case, determining that the Tribunal's order was issued without providing a fair opportunity for the parties to present their case. As a result, the Court set aside the impugned order and remanded the matter to the Tribunal for fresh consideration in accordance with the law.

Treatment of Competing Arguments

The Court did not delve into the merits of the case or the parties' contentions, as the decision was based solely on the procedural issue of natural justice. The parties' substantive arguments were left open for consideration by the Tribunal upon remand.

Conclusions

The Court concluded that the Tribunal's order was passed in breach of natural justice and therefore set it aside. The matter was remanded for fresh consideration, with the parties' contentions on the merits left open for future determination.

SIGNIFICANT HOLDINGS

Core Principles Established

The judgment reinforces the importance of the principles of natural justice in judicial and quasi-judicial proceedings. It underscores the requirement that parties must be given a fair opportunity to present their case before a decision is made.

Final Determinations on Each Issue

The Court set aside the Tribunal's order dated 31 March 2017 due to a breach of natural justice and remanded the matter for fresh consideration. The Court ordered the Appellant to pay Rs. 50,000 to the Government KEM Hospital within two weeks and to file proof of payment in the Court and before the Tribunal. If the payment was not made within the specified time, the appeal would be deemed dismissed with costs. The parties were instructed to act on an authenticated copy of the order, and the substantive issues were left open for future determination by the Tribunal.

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