2011 (1) TMI 1162 - HC - Income Tax

Writ petition - sufficient opportunity was not given to the petitioner to put forth its case Held that - sufficient opportunity was given for filing documents and to file the submission request for further time by the petitioner was not acceded and that the order was passed on the submission and the details available in the file and that as a result the second respondent has not considered the material which was available on record in its proper perspective since there was no hearing given and also the documents which were to be produced and for which time was sought was also not granted and as a result there has been grave prejudice caused to the petitioner on account of the impugned order, respondent is directed to re-consider the matter by giving an opportunity to the petitioner to submit the documents on which it places reliance and also give a personal hearing to a petitioner, writ petition set aside, time for making of the draft assessment order based on the order to be passed by the second respondent is accordingly extended. Writ Petition is disposed of

Summary

Issues:
Quashing of order due to lack of opportunity for petitioner to present case before Additional Commissioner of Income Tax [Transfer Pricing]-II, Bangalore.

Analysis:
The petitioner sought to quash an order dated 24.9.2010, alleging insufficient opportunity to present its case before the Additional Commissioner of Income Tax [Transfer Pricing]-II, Bangalore. The petitioner contended that despite producing voluminous documents, the order did not consider the material properly, leading to prejudice. The petitioner requested an extension till April 2010, but the order was passed in September 2010 without granting further time or a hearing. The petitioner argued for a remand to reconsider the issue, emphasizing the need for a fair opportunity to present its case.

The court considered the submissions and found that only partial information was provided to the authority, and the requested extension till April 2010 was not granted. The court noted that no personal hearing was given, and existing documents were not properly considered. Despite the authority claiming to have given sufficient opportunity, the court agreed with the petitioner's counsel that the lack of a personal hearing and failure to appreciate the documents warranted reconsideration. The court highlighted that the Income Tax Act does not prohibit a personal hearing, and the petitioner's request should have been considered. Emphasizing the violation of natural justice principles, the court set aside the order dated 24.9.2010.

The court directed the second respondent to re-examine the matter, allowing the petitioner to submit relevant documents and granting a personal hearing. A specific date was set for the parties to appear, with the second respondent instructed to pass orders within a month from the designated date. Additionally, the draft assessment order made based on the impugned order was also set aside, with the assessing officer instructed to consider the new order from the second respondent. The time for the draft assessment order was extended accordingly. The writ petition was disposed of based on these directions, ensuring a fair opportunity for the petitioner to present its case.