2020 (9) TMI 93 - HC - Income Tax

Court vacates order, petitioner lacked hearing opportunity & mind application. Reassessment ordered, recovery deferred.

M/s. ANNA ALUMINIUM COMPANY (P) LIMITED. Versus THE DEPUTY COMMISSIONER OF INCOME TAX, THE COMMISSIONER OF INCOME TAX (APPEALS) -I

The court vacated Ext.P5 order due to lack of opportunity for the petitioner to be heard and improper application of mind. The court directed the ... Stay petition - no opportunity of being heard offered to petitioner - HELD THAT:- As gone through Ext.P5 issued without proper application of mind, because what is stated therein is that a stay has been granted on condition of payment of 'disputed demand till the decision of the appeal'. Obviously, therefore, this is an eminently fit case where this Court also feels that Ext.P5 order should be vacated and the Authority be directed to reconsider the stay petition in terms of law. Allow this writ petition and set aside Ext.P5, without entering into the merits of the contentions of the parties and leaving all of them open; with a consequential direction to the 2nd respondent to take up the application for stay preferred by the petitioner and issue orders thereon, after affording them an opportunity of being heard, as expeditiously as is possible. Application for stay is considered by the 2nd respondent, all further action to recover amounts as per the demand will stand deferred. Issues: Impugning an order due to lack of opportunity of being heard, improper application of mind in issuing the order, vacating the order, directing reconsideration of stay petition, granting opportunity of being heard, deferring recovery actions, specifying hearing options in light of COVID-19 restrictions.In this case, the petitioner challenged Ext.P5 order primarily on the grounds of not being given an opportunity to be heard before its issuance. The learned Standing Counsel for the respondents admitted the lack of opportunity and suggested that the matter could be reconsidered if the court deemed fit. Upon reviewing Ext.P5, the court observed that the order was issued without proper application of mind, as it mentioned a stay condition related to the payment of 'disputed demand till the decision of the appeal.' Consequently, the court decided to vacate Ext.P5 and directed the Authority to reassess the stay petition in accordance with the law.The court granted the writ petition, setting aside Ext.P5 without delving into the merits of the parties' contentions and leaving them open. A consequential direction was issued to the 2nd respondent to review the petitioner's stay application and issue orders after providing them with an opportunity to be heard as expeditiously as possible. Notably, all actions to recover amounts as per the demand were deferred until the 2nd respondent considered the stay application. Additionally, the court clarified that the hearing for the petitioner could be conducted physically or through video conferencing due to COVID-19 restrictions.In conclusion, the court ordered the vacating of Ext.P5, directed the reconsideration of the stay petition with an opportunity for the petitioner to be heard, deferred recovery actions, and specified hearing options in light of the ongoing pandemic restrictions.