Court overturns Tax Commission's decision, orders reevaluation with fair opportunity for petitioner to respond

The High Court set aside the Income Tax Settlement Commission's order for rejecting the petitioner's application due to lack of opportunity to respond to an additional report. The Court directed the matter to be reconsidered, ensuring the petitioner receives a fair chance to address the new documents and make submissions. The Settlement Commission was instructed to make a decision within 10 days from the first hearing, with the petitioner required to respond to the documents filed earlier. The Court clarified that its decision did not prejudge the case's merits, allowing the Commission to independently assess the matter.

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Issues:
Challenge to order of Income Tax Settlement Commission under Section 245D (2C) for rejecting application under Section 245C of the Income Tax Act, 1961 due to lack of opportunity to respond to additional report submitted by Commissioner.

Analysis:
The petitioner challenged the order of the Income Tax Settlement Commission dated 24.02.2015, contending that an additional report submitted by the Commissioner on 19.02.2015 during the hearing under Section 245D (2C) was not responded to by the petitioner, violating principles of natural justice. The petitioner argued that the order was passed without granting an opportunity to address the new documents, which were part of the original report filed earlier. The High Court noted that the Settlement Commission relied on the documents submitted on 19.02.2015 and agreed that the petitioner was not adequately given a chance to respond, leading to the setting aside of the impugned order.

The Court decided to remit the matter back to the Settlement Commission for reconsideration at the stage of considering the Commissioner's report, ensuring the petitioner receives a proper opportunity to be heard. The petitioner's counsel agreed not to raise a limitation plea regarding the additional documents, treating them as part of the original report. The Settlement Commission was directed to make a decision under Section 245D (2C) within 10 days from the first hearing, scheduled for 25.05.2015, requiring the petitioner to submit responses to the documents filed on 19.02.2015 before that date.

The High Court clarified that its decision to set aside the order did not imply any opinion on the case's merits, allowing the Settlement Commission to independently assess the matter. The writ petition was allowed to the extent of granting the petitioner a fair opportunity to respond to the additional documents and have the case reconsidered by the Commission.

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