Calcutta High Court: In an appeal deciding whether the Principal Commissioner of Income Tax’s rejection of the appellant’s application under Section 264 of the Income Tax Act, 1961 (the Act) was in accordance with the principles of natural justice, a division bench comprising of T.S. Sivagnanam,* CJ., and Hiranmay Bhattacharyya, J., granted the appellant another opportunity to present their case before the Principal Commissioner of Income Tax, emphasising the importance of considering the merits of the matter and adhering to principles of natural justice in administrative decisions.
In the instant matter, the appellant filed a writ petition challenging an order issued by the Principal Commissioner of Income Tax on 23-03-2021, which rejected the appellant’s application filed under Section 264 of the Act. The appellant contended that the Principal Commissioner of Income Tax’s decision should be reviewed based on the principles of natural justice, particularly as the Principal Commissioner of Income Tax rejected the application without considering the merits but rather based on the appellant’s conduct in previous assessment proceedings.
The Court observed that the Principal Commissioner of Income Tax’s order lacked consideration of the merits of the appellant’s case and solely relied on the appellant’s conduct during past assessment proceedings. The Court noted that while the appellant had not availed themselves of the opportunity to respond to the show-cause notice dated 18-03-2021, alleging non-receipt of notices, the appellant had lost their right of appeal. However, despite the appellant’s failure to respond to a show-cause notice, the Court decided to grant the appellant another opportunity to present their case before the Principal Commissioner of Income Tax.
“Since the assessee has lost his right of appeal and there is an allegation that notices issued by the Assessing Officer were not received by the assessee either by e-mail or by speed post, without standing on technicalities, we are of the view that one more opportunity can be granted to the assessee to go before the PCIT.”
The Court directed the appellant to submit a response to the show-cause notice within 15 days from the date of receipt of the judgment and order. Upon receiving the appellant’s response, the Court instructed the Principal Commissioner of Income Tax to reconsider the matter, considering the appellant’s submissions, the remand report, and the response to the show-cause notice. The Court asserted that the appellant’s authorized representative is to be granted a personal hearing before a decision was made. The Court explicitly stated that if the appellant failed to avail this opportunity, the benefits of the order would not apply, and the appeal would be dismissed without further reference to the Court.
[Gopal Das v. CIT, 2024 SCC OnLine Cal 2755, order dated 19-03-2024]
*Judgment by Chief Justice T.S. Sivagnanam
Advocates who appeared in this case:
Mr. Pramit Bag and Ms. Suranjana Chatterjee, Counsel for the Appellant
Mrs. Smita Das De, Counsel for the Respondents
