Opportunity for Hearing Essential to Uphold Natural Justice; Revisional Order Set Aside, Remanded for Fresh Decision.

The HC partially allowed the writ petition, emphasizing the necessity of an opportunity for a hearing to uphold natural justice principles. The assessment order remained valid, as the petitioner had chances to respond. However, the revisional order under Section 264 was set aside due to the absence of a hearing, and the matter was remanded for a fresh order with a single hearing opportunity for the petitioner. Failure to utilize this opportunity would preclude further chances.

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Issues:
1. Opportunity of hearing under Section 142(1) of the Income Tax Act, 1961.
2. Revisional order under Section 264 of the Income Tax Act, 1961 without affording an opportunity of hearing.

Analysis:
1. The petitioner, a Non-resident Indian, filed an income tax return for the assessment year 2017-18, declaring a total income of Rs.5,61,000 and remitted tax accordingly. Subsequently, notices under Section 143(2) and 142(1) were issued regarding cash deposits during demonetization. Despite multiple opportunities, the petitioner did not respond, leading to the assessment order being passed on 25.12.2019. The petitioner argued insufficient time was given to respond before the order was passed.

2. The petitioner challenged the assessment order through a revision under Section 264 of the Income Tax Act, 1961. The Revisional Authority passed an order without providing an opportunity for a hearing. The counsel for the Income Tax Department argued that the petitioner had adequate chances to explain the cash deposit but failed to do so. The counsel contended that the revisional order did not require an opportunity of hearing as per Section 264 of the Act.

3. The High Court examined the submissions and found that the petitioner had indeed been given opportunities to be heard but failed to respond. However, regarding the revisional order, the Court held that even though Section 264 does not explicitly mention providing an opportunity of hearing, such an opportunity must be implied due to the civil consequences of the revisional order. As the Revisional Authority did not afford a hearing before passing the order, the Court set aside the order and remanded the matter back for a fresh order after providing the petitioner with a single opportunity for a hearing. It was emphasized that failure to avail this opportunity would not lead to further chances for the petitioner.

In conclusion, the High Court partially allowed the writ petition, emphasizing the importance of affording an opportunity of hearing in such matters to uphold principles of natural justice.

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