Income Tax Department not required to provide personal hearing under Section 148A(b) show cause notices

The Bombay HC held that a show cause notice under Section 148A(b) does not mandatorily require a personal hearing, as the statute lacks specific language mandating such hearing. The court ruled that while the Income Tax Department may grant personal hearings voluntarily or upon request, refusal does not deprive the assessee of hearing opportunity. Regarding enquiry under Section 148A(a), the court interpreted "if required" as granting discretionary power to the Assessing Officer rather than creating a mandatory obligation. The court emphasized that harmonious interpretation requires treating "shall" as "may" in this context, while ensuring assessees receive adequate opportunity to contest notices under established legal procedures.

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Issues Involved:
1. Whether Section 148A(b) of the Income Tax Act mandates a personal hearing for the Assessee.
2. Whether an enquiry is mandatory before issuing a notice under Section 148A(a) of the Income Tax Act.

First Issue - Personal Hearing:

The Petitioners contended that Section 148A(b) requires a personal hearing as part of the opportunity of being heard. The Court noted that Section 148A(b) mandates serving a show cause notice within a specified time but does not explicitly mention "personal hearing." The Court emphasized the principle of statutory interpretation that plain language should be given its ordinary meaning and should not be extended beyond what is written. The Court cited several judgments, including those from the Calcutta and Delhi High Courts, which addressed the issue of personal hearing but did not specifically interpret Section 148A(b) as mandating it. The Court concluded that a personal hearing is not mandated by Section 148A(b), though the Income Tax Department may grant it at its discretion.

Second Issue - Enquiry:

The Petitioners argued that an enquiry is mandatory before issuing a notice under Section 148A(a). The Court examined the language of Section 148A(a), which states that the Assessing Officer "shall conduct any enquiry, if required." The Court interpreted the words "if required" as granting discretion to the Assessing Officer to decide whether an enquiry is necessary. The Court supported this interpretation by citing the Supreme Court's judgment in Anshul Jain and other relevant case law, concluding that the word "shall" in this context means "may," thus making the enquiry discretionary rather than mandatory.

Conclusion:

The Court disposed of both petitions, concluding that:
1. Section 148A(b) does not mandate a personal hearing.
2. The enquiry under Section 148A(a) is discretionary and not mandatory.

The Court also emphasized that the Income Tax Department must follow due procedure and ensure that the Petitioners are given a reasonable opportunity to contest the notice under Section 148. All contentions of the parties remain open for consideration.

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