2004 (9) TMI 40 - HC - Income Tax

Court quashes order due to lack of hearing, remits for fresh decision under Income-tax Act

The court, in a petition seeking various reliefs including quashing of orders and renewal of an exemption certificate under section 80G of the Income-tax ... Renewal of exemption certificate under section 80G - petitioner, however, argued that the respondents have not offered proper opportunity of hearing before passing the order dated February 20, 2003 (annexure P 13), and, therefore, the same is liable to be quashed - we hold that no proper opportunity of hearing had been provided to the petitioner and hearing provided by respondent No. 1 would amount to only a post-decisional hearing in the facts and circumstances of the case and the same would thus, be in violation of the basic principles of natural justice – matter is remanded Issues:1. Petition under article 226/227 of the Constitution of India seeking various reliefs including quashing of orders and renewal of exemption certificate under section 80G of the Income-tax Act.Analysis:The petitioner filed a petition under article 226/227 of the Constitution of India seeking multiple reliefs, including quashing of certain orders and the renewal of an exemption certificate under section 80G of the Income-tax Act. The petitioner requested the court to issue a writ of certiorari to quash specific orders and a writ of mandamus directing the concerned authority to renew the exemption certificate. The petitioner also sought a writ of prohibition against further proceedings based on a specific notice. During the hearing, the petitioner's counsel clarified that there was no grievance regarding a notice under section 148 of the Income-tax Act, thus rendering the prayer for a writ of prohibition infructuous. However, the counsel argued that the respondents did not provide a proper opportunity of hearing before passing a particular order, alleging a violation of the principles of natural justice.The counsel contended that despite the petitioner's efforts to comply with the requirements for renewal of exemption under section 80G, the respondents did not afford a fair hearing. The counsel highlighted the sequence of events, including requests for documents, scheduled hearings, and the submission of replies by the petitioner. The petitioner claimed that the hearing provided by respondent No. 1 was merely a formality and did not meet the standards of natural justice. The respondents, in their reply, disputed the petitioner's version of events, asserting that the petitioner had failed to comply with requests for information and had sought multiple adjournments, leading to delays in the process. The respondents argued that the petitioner's non-compliance and delays justified the actions taken, including the submission of a report unfavorable to the petitioner's interests.Upon examining the submissions and evidence presented, the court found that the petitioner was not provided with a proper opportunity of hearing, as required by the principles of natural justice. The court concluded that the hearing conducted by respondent No. 1 amounted to a post-decisional hearing, violating basic principles of natural justice. Consequently, the court quashed the order passed by respondent No. 1 and remitted the matter for a fresh decision after affording the petitioner a proper and effective opportunity to be heard. The court directed the petitioner to appear before respondent No. 1 on a specified date for further proceedings. The writ petition was disposed of accordingly, with no costs imposed on either party.