MKU LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2 11 KANPUR AND 2 OTHERS

WTAX/3137/2025HC AllahabadUPHC01335104202514 July 20252 pages
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What did the High Court hold?

The High Court held that the order dated April 7, 2025, passed by the Assistant Commissioner of Income Tax, Circle 2(1)(1), Kanpur, rejecting the petitioner's rectification application under Section 154 of the Income Tax Act, 1961, was in violation of the principles of audi alteram partem and natural justice, as it was passed without granting an opportunity of hearing to the petitioner. Consequently, the impugned order was quashed and set aside. The Court directed the authorities to grant an opportunity of hearing to the petitioner in accordance with law before disposing of the Section 154 application. The ratio decidendi is that an order passed without affording a hearing, when such a hearing is contemplated or required by principles of natural justice, is unsustainable and liable to be set aside.

What were the facts?

The petitioner, Mku Limited, filed a writ petition challenging an order dated April 7, 2025, passed by the Assistant Commissioner of Income Tax, Circle 2(1)(1), Kanpur. This order rejected the petitioner's rectification application filed under Section 154 of the Income Tax Act, 1961, for Assessment Year 2018-19. The petitioner sought to quash this order and sought a mandamus directing the respondent to dispose of the Section 154 application after affording a personal hearing. The High Court noted that the impugned order was passed without granting the petitioner an opportunity of hearing.

What were the issues?

1. Whether the order passed by the Assistant Commissioner of Income Tax rejecting the petitioner's rectification application under Section 154 of the Income Tax Act, 1961, for AY 2018-19 is liable to be quashed for violation of principles of natural justice, specifically the audi alteram partem rule, by not affording an opportunity of personal hearing to the petitioner? Assessee's Contention: The petitioner argued that the order rejecting their Section 154 application was passed without providing a personal hearing, thus violating principles of natural justice. They sought quashing of the order and a direction for a fresh disposal with a hearing. Revenue's Contention: The judgment does not record any specific contentions made by the revenue on the merits of the case. However, counsel for the revenue appeared and was heard.

Which sections of the Income-tax Act were involved?

Section 154

AI-generated summary — verify with the full judgment below

Neutral Citation No. - 2025:AHC:113888-DB Court No. - 3 Case :- WRIT TAX No. - 3137 of 2025 Petitioner :- Mku Limited Respondent :- Assistant Commissioner Of Income Tax, Circle 2 11 Kanpur And 2 Others Counsel for Petitioner :- Suyash Agarwal Counsel for Respondent :- A.S.G.I.,Anant Kumar Tiwari,Gaurav Mahajan Hon'ble Shekhar B. Saraf,J.

Hon'ble Praveen Kumar Giri,J.

Heard Sri Suyash Agarwal, learned counsel for the petitioner, Sri Anant Tiwari, learned counsel appearing on behalf of respondent no. 3/Union of India and Sri Manu Ghildyal, learned counsel appearing on behalf of the respondent nos. 1 and 2.

The present writ petition under Article 226 of the Constitution of India has been filed by the petitioner seeking the following reliefs: "(i) Issue a Writ, Order or Direction in the nature of Certiorari quashing the impugned order passed by Respondent No. 1 dated 07.04.2025 rejecting the rectification application of the petitioner filed u/s 154 of the Act for A.Y. 2018-19 (Annexure No. 1). (ii) Issue writ order or direction in the nature of mandamus directing respondent No.1 to dispose of the application u/s 154 of the act after affording opportunity of per

The order continues below.

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