TMI Blog2024 (2) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... a show cause notice u/s 148A (b) would necessarily and mandatorily include a personal hearing. The Income Tax Department, on it s own volition or on a request made by the Assessee, may grant a personal hearing. However, refusal to grant a personal hearing would not mean that the assessee has been deprived of an opportunity of hearing, in the absence of any specific provision or the language in the statute book mandating such a hearing. Enquiry to be conducted before issuance of a notice by the AO u/s 148A(a) - contention of the Petitioner is that the enquiry is mandatory - HELD THAT:- Under clause (b), an opportunity of being heard is to be provided to the Assessee. Clause (c) requires that the reply of the Assessee has to be taken into account and clause (d) requires an order to be passed for forming an opinion that a notice u/s 148 has to be issued, on the basis of the material available on record, which includes the reply of the Assessee. In the absence of any specific judicial pronouncement dealing with the aspect of interpretation on this issue, considering the language of the provision and noticing the law enunciated in the above discussed reports, we are of the view that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act, 1961 has now been issued to the Petitioners and the proceedings are underway. 3. For brevity, we are reproducing the chronological dates and events as are tendered by the individual Petitioners in their synopsis (verbatim). 4. In WP No.10075/2023, the dates and events read (verbatim) as under :- Sr.No. Date Particulars Exhibit Page No. 1. 31.10.2019 Petitioner filed Income Tax Return for the Assessment Year 2019-20. A 28 to 108 2. 01.03.2023 Respondent No. 4 issued a Notice under clause (b) of Section 148A of the Income Tax Act, 1961. B 109 to 118 3. 13.03.2023 Petitioner's Director requested Respondent No. 4 to allow an additional 8-10 days to file a response to the Notice dated 01.03.2023 vide mail C 119 to 120 4. 23.03.2023 Petitioner submitted a Written Reply in response to the Notice dated 01.03.2023 D 121 to 127 5. 29.03.2023 Respondent No. 3 granted approval under Section 151 of Income Tax Act, 1961 E 128 6. 30.03.2023 Respondent No. 4 issued order under clause (d) of Section 148A of the Income Tax Act, 1961 F 129 to 135 7. 30.03.2023 Respondent No. 4 issued a Notice under Section 148 of Income Tax Act, 1961 G 136 5. In WP No. 10078/2023, the dates and event ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,- (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in violation of the principles of natural justice, in as much as, the appellant was not granted an opportunity of a personal hearing. After considering the facts of the case, the Calcutta High Court recorded that, As pointed out earlier, the notice dated 27.03.2023 is not a notice of personal hearing. Therefore, the authority while passing the order impugned in the writ petition has violated the principles of natural justice and inasmuch as the statute also provided that opportunity be granted to the assessee before an assessment is reopened. Therefore, we are satisfied that there has been violation of principles of natural justice and, therefore, the assessee has to be provided an opportunity of personal hearing and also be given liberty to furnish additional documents to support their stand. We say with respect that, we do not find that the issue raised before us, as regards interpretation of Section 148A(b) to mean that a personal hearing is mandatory, was actually raised before the Calcutta High Court. The contention of the Petitioners that the principles of natural justice have been violated by not granting a personal hearing, was accepted by the Court, without going into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 148 and serve a copy of such order along with such notice on the assessee . The Assessing Officer shall before conducting any such enquiries or providing opportunity to the assessee or passing such order obtain the approval of specified authority. However, this procedure of enquiry, providing opportunity and passing order, before issuing notice under section 148 of the Act, shall not be applicable in search or requisition cases. (viii) The time limitation for issuance of notice under section 148 of the Act is proposed to be provided in section 149 of the Act and is as below: in normal cases, no notice shall be issued if three years have elapsed from the end of the relevant assessment year. Notice beyond the period of three years from the end of the relevant assessment year can be taken only in a few specific cases. in specific cases where the Assessing Officer has in his possession evidence which reveal that the income escaping assessment, represented in the form of asset, amounts to or is likely to amount to fifty lakh rupees or more, notice can be issued beyond the period of three year but not beyond the period of ten years from the end of the relevant assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts will take effect from 1st April, 2021. [Emphasis supplied] 15. After perusing the language used in the above reproduced portions of the memorandum, we find that the learned Advocate for the Respondent / Department is fortified in contending that the Legislature has specifically excluded the word and a personal hearing in addition to the words appearing in clause (b) as providing an opportunity of being heard to the Assessee . Even in clause (c), it has been noted as After considering his reply, the Assessing Office shall decide, by passing an order, whether it is a fit case for issue of notice under section 148 and serve a copy of such order along with such notice on the assessee. As such, with the conjoint reading of Section 148A(b and c) and clauses 7 and 8 of the Memorandum, it is apparent that a personal hearing in addition to the show cause notice of hearing, is not mandated. 16. We find assistance in a judgment delivered by the Single Judge Bench of this Court ( Coram : Dama Sheshadri Naidu, J.) at Goa in LD-VC-CW-81-2020 (Sunil Garg Vs. Munnalal Halwai and Others) with regard to the procedural aspect of the Statute Book. It has been held in paragraph Nos. 3, 4, and 5 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir exercising it. 17. In Sunil Garg (supra), the Court has finally concluded in paragraph Nos. 62 to 66 as under :- Is oral hearing a facet of natural justice? 62. In his celebrated commentary on Administrative Law , the learned author C. K. Thakker, after examining English and Indian case law, opines that oral or personal hearing is not considered to be constituent of natural justice . With that prefatory observation, he agrees that an adjudicatory authority is bound to give a reasonable opportunity of hearing to the person against whom an action adversely affecting him is sought to be taken. Whether this reasonable opportunity of hearing should also include oral or personal hearing, according to him, is an important and complicated question . After referring to standard commentaries on administrative law, such as de Smith's Judicial Review of Administrative Action, Wade Forsyth's Administrative Law, Thakker CK concludes that a fair hearing does not necessarily mean personal hearing and it cannot be urged that there must be an opportunity to be heard orally . As is the case with the English courts, even in the USA, the courts have not considered oral hearing to be a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that even when the Lokayukta recommends penal action after the preliminary inquiry, still notice is not an essential feature of the preliminary inquiry. Conclusion : 66. Going by the settled precedential position, when a statute provides for an oral hearing, it is indispensable. On the contrary, when it is silent-coupled with a legislative declaration that the tribunal concerned will have the powers to regulate its procedure - it lies in the tribunal's discretion. In the name of natural justice, we cannot read a provision into a statute, which the legislature has consciously avoided or omitted. It is, indeed, fallacious to insist that a court or a tribunal should follow throughout the life of a case the procedure it adopted at the beginning. Every case, as we know, has many stages. At some stages, the tribunal adjudicates issues which involve disputed questions of fact; at other stages it adjudicates disputed questions of law; still at some other stages, it adjudicates questions of both law and fact. At every stage, whether a party should be allowed to advance oral documents lies in the tribunal's discretion. CONCLUSION ON THE FIRST ISSUE 18. Not a single judgment ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be non-filers. Out of the persons who have filed their ITR they have shown very meager profit over a very high turnover which also indicates that these entities were involved in issuance of bogus bills. The AO has issued summons to all these entities seeking explanation regarding the purchases and sales made by them. Most of summons issued were returned un-served by the postal department. In cases where summons were served no response was received from these entities. All these are a shell entities which are not having any business and have booked bogus bills without supply of any goods. The reply filed by the assessee was insufficient to explain the purchases made from M/s Hitakrit Trading Private Limited as genuine one. On the basis of the information available on record and after considering the reply of the assessee, it was noticed that the case of the assessee is a fit case for issuance of notice u/s 148 of the Act. The Deponent relies on the following judgments of Hon'ble Supreme Court : In the case of Anshul Jain Vs. Pr. Commissioner of Income Tax and another, the assessee had filed SLP before Supreme Court of India vide SLP no 14823 of 2022. The Hon'ble Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b), Section 148 of the Act proposes conducting of an enquiry, if required . 22. The learned Advocate for the I T Department has cited the law laid down by the Hon ble Supreme Court vide the order dated 02.09.2022 delivered in SLP No.14823/2022 (Anshul Jain Vs. Pr. Commissioner of Income Tax and another) wherein the Hon ble Supreme Court noted as under :- What is challenged before the High Court was the re-opening notice under Section 148A(d) of the Income Tax Act, 1961. The notices have been issued, after considering the objections raised by the Petitioner. If the petitioner has any grievance on merits thereafter, the same has to be agitated before the Assessing Officer in the re-assessment proceedings. Under the circumstances, the High Court has rightly dismissed the writ petition. 23. The I T Department has then relied upon the judgment delivered by the Hon ble Supreme Court in Raymond Woolen Mills Ltd., Vs. Income Tax Officer, Center Circle [2008(14) SCC 218] as under :- In determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the department could reopen the case. The suffic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t however, may send the matter for its execution to a court only in the event it is unable to do so. Such a contingency may arise only in a given situation but in our considered opinion the same does not lead to the conclusion that the Consumer Courts cannot execute its own order and by compulsion it has The terminology used in Section 25 of the Act to the effect in the event of its inability to execute it is of great significance. Section 25, on a plain reading, goes to show that the provision contained therein presuppose that the Forum or the Commission would be entitled to execute its order. It however, may send the matter for its execution to a court only in the event it is unable to do so. Such a contingency may arise only in a given situation but in our considered opinion the same does not lead to the conclusion that the Consumer Courts cannot execute its own order and by compulsion it has to send all its orders for execution to the civil courts. Such construction of Section 25 in our opinion would violate the plain language used therein and, thus, must be held to be untenable. It is now well settled principle of interpretation of statute that plain language employed in a Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a text. There is no reason why we should not use Mimansa Principles of Interpretation in appropriate occasions. 27. In Mimansa, the literal rule of interpretation is known as the 'Shruti' or Abhida' Principle. This is illustrated by the Garhapatya nyaya (In Mimansa Maxims are known as nyayas). There is the vedic verse: Aindrya garhapatyam upatishthate , which means By the Mantra addressed to Indra establish the household fire. This verse can possibly have several meanings viz. (1) worship Indra (2) worship Garhapatya (the household fire) (3) worship both, or (4) worship either. However, since the word 'Garhapatyam' is in the objective case, the verse has only one meaning, that is, 'worship Garhapatya'. The word 'Aindrya' means 'by Indra', and hence the verse means that by verses dedicated to Indra one should worship Garhapatya. The word 'Aindrya' in this verse is a Linga, (in Mimansa Linga means the suggestive power of a word), while the words 'Garhapatyam Upatishthate' are the Shruti. According to the Mimansa principles, the Shruti (literal meaning) will prevail over the Linga (suggestive power). 28. It is not necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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