Court sets aside order for breach of natural justice, remands for fresh decision.

The Court set aside the order due to a breach of natural justice and remanded the matter to the Assessing Officer for fresh disposal after considering the petitioner's reply and granting a personal hearing. The Court emphasized that the availability of an alternative remedy does not bar the exercise of writ jurisdiction in cases of serious flaws in decision-making or breach of natural justice. The petitioner was directed to appear for a personal hearing, and all contentions were kept open for consideration by the Assessing Officer in line with Tribunal's directions.

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Issues Involved:
1. Breach of principles of natural justice.
2. Non-compliance with Tribunal's directions.
3. Availability of alternative remedy.

Issue-wise Detailed Analysis:

1. Breach of Principles of Natural Justice:
The petitioner challenged the order dated 29 November 2013 passed by the Assessing Officer (AO) under Section 143(3) read with Sections 263 and 254 of the Income Tax Act, 1961, for the Assessment Year 2005-06. The primary contention was the breach of principles of natural justice due to the absence of a fair opportunity to make a representation. The petitioner argued that the AO issued a show cause notice on 27 November 2013, demanding a response by 3.30 p.m. on 28 November 2013, which was less than 24 hours. Despite filing a reply on 29 November 2013, the AO passed a 76-page order on the same day, indicating that the reply was not considered. The Court observed that granting less than 24 hours to respond was unreasonable and constituted a serious flaw in the decision-making process. The issuance of the show cause notice itself indicated that the AO was uncertain about disallowing the deduction under Section 80IA, thus necessitating a reasonable opportunity for the petitioner to respond.

2. Non-compliance with Tribunal's Directions:
The petitioner also contended that the AO's order was in breach of the Tribunal's directions dated 18 September 2012 and 3 April 2013. The Tribunal had directed the AO to decide the issue of the petitioner's entitlement to the deduction under Section 80IA without being influenced by the observations made in the order dated 30 March 2010 of the Commissioner of Income Tax or the assessment order for the Assessment Year 2006-07. However, the AO's order relied on findings from both these orders, thus violating the Tribunal's directions. The Court noted that the AO is bound to follow the directions of the higher forum, i.e., the Tribunal, and the failure to do so was a valid ground for setting aside the impugned order.

3. Availability of Alternative Remedy:
The revenue argued that the petitioner had an alternative remedy of appeal under Section 246-A of the Act to the Commissioner of Income Tax (Appeals) and thus, the petition should not be entertained. However, the Court held that the availability of an alternative remedy does not bar the exercise of writ jurisdiction, especially in cases involving a serious flaw in the decision-making process or a breach of natural justice. The Court emphasized that non-exercise of writ jurisdiction in appropriate cases would amount to an abdication of its obligation to ensure justice.

Conclusion:
The Court set aside the impugned order dated 29 November 2013 on the ground of breach of natural justice and remanded the matter to the AO for fresh disposal after considering the petitioner's reply dated 29 November 2013 and granting a personal hearing. The Court clarified that it had not examined the merits of the controversy, and all contentions were kept open to be urged before and decided by the AO in line with the Tribunal's directions. The petitioner was directed to appear for a personal hearing before the AO on 15 January 2014. The petition was disposed of with no order as to costs.

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