Court grants writ petition challenging tax order, citing lack of due process & denial of hearing

The High Court of Allahabad allowed a writ petition challenging an order under section 273A of the Income-tax Act, 1961, due to lack of proper application of mind and denial of hearing opportunity. The petitioner's revised return, prompted by a bank credit, faced scrutiny without crucial document disclosure, violating natural justice. The Court set aside the order, directing the Commissioner to issue a fresh decision after providing necessary documents and a fair hearing, highlighting the significance of upholding principles of natural justice in legal proceedings.

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Issues involved: Challenge to order u/s 273A of the Income-tax Act, 1961 based on lack of proper application of mind and denial of opportunity of hearing.

Summary:
The High Court of Allahabad heard a writ petition challenging an order dated March 31, 1997, passed by the Commissioner of Income-tax u/s 273A of the Income-tax Act, 1961. The petitioner initially filed a return showing an income of Rs. 33,387 for the assessment year 1992-93, but later revised it to Rs. 70,000 due to a credit in the State Bank account. The petitioner claimed the revised return was voluntary. However, notices were issued u/s 148 and 143(2) regarding the revised return. The petitioner then applied u/s 273A, which was rejected in the impugned order for alleged lack of proper application of mind and denial of proper hearing opportunity.

The Court noted that the petitioner's revised return was filed after an enquiry from Viyas Bank and a raid in Bangalore involving bogus drafts. The Court found that the petitioner was not provided with copies of crucial documents used against him, violating principles of natural justice. Consequently, the impugned order was set aside, allowing the writ petition. The Court directed the Commissioner to issue a fresh order after providing copies of relevant documents to the petitioner and granting a proper hearing opportunity.

This judgment emphasizes the importance of adhering to principles of natural justice, particularly the right to be informed of and respond to materials used against a party in legal proceedings.

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