SAHARA HOSPITALITY LIMITED AND ORS. vs. COMMISSIONER OF INCOME TAX-8

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WP/596/2012HC Bombay12 September 2012Author: HON'BLE SHRI JUSTICE S.J. VAZIFDAR, HON'BLE SHRI JUSTICE M.S. SANKLECHA23 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the requirement under Section 127(1) and (2) of the Income Tax Act, 1961, of granting an assessee a reasonable opportunity of being heard, wherever it is possible to do so, is mandatory. The Court interpreted the word 'may' in Section 127 as 'shall'. The discretion of the authorities lies only in determining what constitutes a reasonable opportunity and whether it is possible to provide such an opportunity in a given case. The Court found that the petitioner had expressly requested a personal hearing, which was not granted, and the revenue's claim of sufficient opportunity was unsubstantiated. The impugned order was therefore set aside on the ground that the petitioner had not been heard. The Court directed the Commissioner of Income Tax to pass a fresh order after hearing the petitioner. The Court explicitly stated that setting aside the order does not affect the respondent's case on merits or limitation.

What were the facts?

The petitioners, Sahara Hospitality Ltd. and its CFO, challenged an order dated January 5, 2012, passed by the Commissioner of Income Tax-8 (Respondent No. 1). The order transferred the petitioner's case from Mumbai to Delhi for assessment. The petitioner's registered office was originally in Delhi but shifted to Maharashtra in 2003. Previously, by an order dated September 22, 2003, under Section 127(2) of the Income Tax Act, 1961, the petitioner's case was transferred from Delhi to Mumbai for administrative convenience. For assessment years 2010-2011 and 2011-2012, the petitioner filed returns in Mumbai. However, on September 12, 2011, Respondent No. 1 proposed to transfer the case back to Delhi, citing large-scale financial transactions with the Sahara Group, whose other entities were already centralized in Delhi. The petitioner requested reasons and a personal hearing, which was not granted. The impugned order was passed on January 5, 2012, and served on the petitioner on January 27, 2012.

What were the issues?

1. Whether the requirement under Section 127(1) and (2) of the Income Tax Act, 1961, of granting an assessee a reasonable opportunity of being heard, wherever it is possible to do so, is mandatory? Assessee's Contention: The assessee contended that they had expressly requested a personal hearing after submitting their objections, but this was not granted. They argued that the impugned order was passed without providing a reasonable opportunity of being heard, which is mandatory under Section 127 of the Act. They relied on the principle that the word 'may' in Section 127 should be interpreted as 'shall' when a reasonable opportunity is possible. Revenue's Contention: The revenue contended that sufficient opportunity of being heard was given to the petitioner's counsel, as stated in an affidavit. They argued that the petitioner had indicated a preference to submit objections in writing, and these were considered before passing the order. They also argued that the opportunity of being heard is not always obligatory, citing cases where it might not be possible.

Which sections of the Income-tax Act were involved?

Section 127(1),Section 127(2),Section 5(7-A)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.596 OF 2012 1. Sahara Hospitality Ltd. )    A Company incorporated under  )    The Companies Act, 1956,  )    having its registered office at,  )    Hotel Sahara Star, Opp. Domestic )    Airport, Vile Parle (E),  )    Mumbai – 400 099. ) 2. Mrs. Ashu C. Sood, an Indian, )    Inhabitant, CFO and Company )    Secretary of Sahara Hospitality )    Limited having her address at )    Hotel Sahara Star, Opp. Domestic )    Airport, Vile Parle (E), )    Mumbai – 400 099. )    ..Petitioners        versus   1. Commissioner of Income Tax­8 )    Room No. 259 Aayakar Bhavan, )    M.K. Road, Mumbai – 400 020. ) 2. Assistant Commissioner of  )    Income Tax 8(3),  )    Aayakar Bhavan, M.K.Road, )    Mumbai – 400 020. ) 3. Deputy Commissioner of Income Tax, )    Central Circle­6, Room No.334, )    E­2, ARA Centre, Jhandewalan Extn, )    New Delhi. ) 4. Union of India, through the  )    Secretary, Minister of Finance, )    Government of India, )    New Delhi – 110 101. )   ..Respondents ­­­­­­­­ SNC 1/23 WP 596-12.doc CNR No : HCBM020059942012 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:10 Mr. Percy Pardiwalla, Senior Counsel alongwith Mr.  Parag Kandar i/b DSK Legal for the Petitioners. Mr. Arvind Pinto for the Respondents. .............        CORAM :  S.J.VAZIFDAR &         M.S.SANKLECHA, JJ.       DATE :   12th September, 2012

JUDGMENT (PER S.J.VAZIFDAR,J) : 1 Petitioner   no.2   is   the   Chief   Finance Officer and Company Secretary of petitioner no.

1.

The reference to the Petitioner in this judgment is to petitioner no.

1.

Respondent nos. 2,3 & 4 are the Assistant Commissioner   of   Income   Tax,   Mumbai,   Deputy Commissioner of Income Tax, New Delhi and the Union of India respectively. 2 The petitioners seek inter alia a writ to quash   an   order   dated   05.01.2012   passed   by respondent   no.

1.

The   question   that   falls   for consideration in this Writ Petition is whether the requirement   under   Section   127(1)   and   (2)   of   the Income   Tax   Act,   1961   of   granting   an   assessee   a SNC 2/23 WP 596-12.doc Uploaded on - 21/08/2020 reasonable opportunity of being heard, wherever it is possible to do so is mandatory. We   have   answered   the   question   in   the affirmative  both,  on  principle  and   on  authority. In   this   case,   petitioner   no.1,   the   assessee   was admittedly not heard although it was possible to do so.     The   impugned   order   has   therefore   been   set aside on this ground alone.  In view thereof we did not permit Mr. Pardiwalla to advance any further submissions. 3 The   petitioner's   registered   office   which was originally in Delhi, was shifted to the State of Maharashtra in the year 2003. By an order dated 22.09.2003 under Section 127(2) of the Income Tax Act,   1961   ('the   Act')   the   petitioner's   case   was transferred from the ITO, New Delhi to respondent no.2 for administrative convenience and coordinated investigation.   Accordingly,   the   petitioner's   tax returns were filed in and taken up for assessment for the assessment years 2003­2004 to 2009­2010 in Mumbai. SNC 3/23 WP 596-12.doc Uploaded on - 21/08/2020 4(A) The   petitioner   filed   its   return   for   the assessment years 2010­2011 and 2011­2012 in Mumbai. However, by a letter dated 12.09.2011, respondent no.1 informed the petitioner that he was directed to propose to transfer the petitioner's case from ACIT, Mumbai to DCIT, New Delhi.  Respondent no.1 requested   the   petitioner   for   its   no   objection certificate for the proposed centralization of the case and stated that in the event of the petitioner not complying with the same, it would be presumed that it had no objection thereto and a order under Section   127(2)   of   the   Act   would   be   passed accordingly. (B) The   petitioner   by   its   reply   dated 22.09.2011 stated that the first respondent's said letter   was   without   reasons   and   requested   him   to furnish the reasons for the proposed transfer and thereafter, to offer it  reasonable time to object to  the  same.   It  is important  to  note  that  the Petitioner   expressly   stated   that   the   first respondent   ought   to   grant   it   a   personal   hearing SNC 4/23 WP 596-12.doc Uploaded on - 21/08/2020 after receiving its objections.   Accordingly, the petitioner requested the first respondent to keep the proposed transfer in abeyance till the personal hearing was granted. (C) Respondent   No.1   by   a   letter   dated 23.11.2011 stated that the transfer was proposed in view of the large scale finance transactions and investments of the petitioner with the Sahara Group of   Companies   to   which   it   belonged   and   that   the other   entities   of   the   Sahara   Group   were   already centralized in New Delhi. The letter offered the petitioner   an   opportunity   to   file   its   written submissions on or before 05.12.2011. The letter did not mention anything about a personal hearing. (D) The   petitioner   by   a   letter   dated 05.12.2011 stated that it would submit its detailed reply  by   20.12.2011  and  requested  an   adjournment accordingly.    The   letter   refers   to   “the   hearing fixed   today   (05.12.2011)   vide   notice   dated 23.11.2011,” but, as noted earlier that letter did SNC 5/23 WP 596-12.doc Uploaded on - 21/08/2020 not mention anything about a personal hearing. (E) By a further letter dated 19.12.2011, the petitioner   set   out   various   objections   to   the transfer   of   its   assessment   proceedings.   For   the purpose of this judgment, it is not necessary to refer   to   the   petitioner's   objections   on   merits. The   letter   concludes   by   stating   that   in   case respondent no.1 did not accept its submissions, a further opportunity be granted to the petitioner to make further submissions. 5 The   impugned   order   is   dated   05.01.2012. It  was  however  served  on  the  petitioner only  on 27.01.2012. We   will   therefore   refer   to   what transpired during this period before dealing with the impugned order. 6(A) Respondent No.2, Assistant Commissioner of Income Tax, Mumbai issued a notice dated 28.12.2011 under   Section   142(1)   which  inter   alia  raised various   queries   and   granted   the   petitioner   time SNC 6/23 WP 596-12.doc Uploaded on - 21/08/2020 till 16.01.2012 to respond to the same. (B) Subsequently,   the   petitioner   received   a notice dated 18.01.2012 under Section 142(1) issued by respondent no.3, Deputy Commissioner of Income Tax, New Delhi stating that the juri iction over the case had been centralized with Central Circle ­6, New Delhi.  The petitioner was called upon to attend the office of respondent no.3 in connection with the assessment including the said notice under section 142(1) dated 28.12.11 issued by respondent no.2, Asst. Commissioner of Income Tax, Mumbai. (C) The   Petitioner   by   a   letter   dated 27.01.2012 addressed to respondent no.3 stated that nothing had been heard by it, nor had any order been   passed   for   centralizing   the   case   by   the Commissioner   of   Income   Tax,   Mumbai   and   that   the notice   issued   by   Respondent   no.3   was   therefore beyond juri iction. On   the   same   day,   the   petitioner's representative,   who   attended   the   office   of SNC 7/23 WP 596-12.doc Uploaded on - 21/08/2020 respondent    no.3   was    furnished   a    copy    of impugned   order   passed   under   section   127(2) purporting to transfer the petitioner's case from respondent no.2 in Mumbai to respondent no.3 in New Delhi. 7 This bring us back to the impugned order dated 05.01.2012 passed by respondent no.

1.

The order inter

alia records

the previous correspondence   between  the   parties  and   states  as under :

“8. I   have   considered   the   relevant facts,   perused   the   relevant   records and   considered   the   objections   of   the assessee,   it   is   seen   that   all   the cases   belonging   to   the   Sahara   Group are   centralized   with   DCIT   Central Circle – 6, New Delhi.   It is also a fact that the assessee has substantial loan / financial transactions with the other   group   entities. Therefore, since   the   assessee's   group   cases   are centralized with DCIT Central Circle­ 6, New Delhi, for the purpose of co­ ordinated

investigation

and assessment, in exercise of the powers conferred   by   sub­section   (2)   of Section   127   of   Income   Tax   Act,   1961 and   all   other   powers   enabling   me   in this   behalf,   I,   the   Commissioner   of Income Tax­8, Mumbai, hereby transfer the case, the particulars of which are SNC 8/23 WP 596-12.doc Uploaded on - 21/08/2020 mentioned   in   column   (2)   of   the schedule   hereunder,   from   the   officer mentioned   column   (3)   to   the   officer mentioned in column (4) thereof.” The order was directed to take effect from 06.01.2012. 8 Mr.   Pinto,   the   learned   Counsel   appearing on behalf of the respondents submitted that Section 127 merely requires an assessee to be granted an opportunity  of  placing   its  submission  in   writing before the concerned officer.   According to him, Section 127 does not require the concerned officer to grant an assessee a personal hearing in respect of proceedings under section 127(1) and 127(2) even where it is possible to do so. 9 This   submission   is   ill­founded   on principle and on precedent.   It is contrary to the judgments of the Supreme Court, various High Courts and to the provisions of sections 127(1) and (2) which require the concerned officer to grant the assessee “a reasonable opportunity of being heard SNC 9/23 WP 596-12.doc Uploaded on - 21/08/2020 in the matter wherever it is possible to do so.” It is not the respondent's case that it was not possible to offer the petitioner an opportunity of being heard.   In our opinion, the section 127(1) and   (2)   mandate   an   assessee   being   granted   a reasonable opportunity of being heard wherever it is   possible   to   do   so.       Section   127   reads   as under:­ “127. Power to transfer cases.—(1) The Director­General   or   Chief   Commissioner or   Commissioner   may,   after   giving   the assessee   a   reasonable   opportunity   of being heard in the matter, wherever it is   possible   to   do   so,   and   after recording   his   reasons   for   doing   so, transfer   any   case   from   one   or   more Assessing   Officers   subordinate   to   him (whether   with   or   without   concurrent juri iction)   to   any   other   Assessing Officer or Assessing Officers (whether with or without

concurrent juri iction) also subordinate to him. (2)   Where   the   Assessing   Officer   or Assessing   Officers   from   whom   the   case is to be transferred and the Assessing Officer   or   Assessing   Officers   to   whom the case is to be transferred are not subordinate   to   the   same   Director­ General   or   Chief   Commissioner   or Commissioner,— (a) where the Director Generals or Chief Commissioners or Commissioners to whom   such   Assessing   Officers   are subordinate are in agreement, then the Director­General   or   Chief   Commissioner SNC 10/23 WP 596-12.doc Uploaded on - 21/08/2020 or Commissioner from whose juri iction the   case   is   to   be   transferred   may, after giving the assessee a reasonable opportunity   of   being   heard   in   the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Director Generals or Chief   Commissioners   or   Commissioners aforesaid   are   not   in   agreement,   the order   transferring   the   case   may, similarly,   be   passed   by   the   Board   or any   such   Director­General   or   Chief Commissioner   or   Commissioner   as   the Board   may,   by   notification   in   the Official   Gazette,   authorise   in   this behalf. (3) Nothing in sub­section (1) or sub­ section (2) shall be deemed to require any such opportunity to be given where the   transfer   is   from   any   Assessing Officer or Assessing Officers (whether with or without

concurrent juri iction)   to   any   other   Assessing Officer or Assessing Officers (whether with or without

concurrent juri iction)   and   the   offices   of   all such officers are situated in the same city, locality or place.” 10 The Section read as above indicates that the   word   'may'   in   sub   sections   (1)   and   (2)   of Section 127 ought to be read as 'shall'.   It is obvious that upon the transfer of a case from one juri iction   to   another   in   a   different   city   as opposed to  cases  where  the  transfer  is  from  one SNC 11/23 WP 596-12.doc Uploaded on - 21/08/2020 officer to another in the same city, locality or place,   would   adversely   affect   the   rights   of   an assessee for reasons too obvious to state.   This becomes clear when sub sections (1) & (2) on the one hand  are  compared  to  sub­section  (3)  on the other.    In  cases  falling  under  sub  Section  (3), there is no requirement of giving the assessee a reasonable   opportunity   of   being   heard   in   the matter. 11 The Madhya Pradesh High Court in Sagarmal Spinning & Weaving Mills Ltd. v. C.B.D.T., (1972)83 ITR 130 held as under: “   As   already   indicated   by   us,   on   a plain reading of Section 127 of the Income Tax Act, 1961, two things are absolutely   necessary,   namely,   a reasonable opportunity of being heard in the matter wherever it is possible to do so and, secondly, the recording of   reasons   for   transferring   a   case. In   the   absence   of   these   two requirements   being   fulfilled,   it   is not possible to support an order of transfer   and   especially   with   such   a vague   observation   that   the   transfer is proposed   for   facility of investigation.” SNC 12/23 WP 596-12.doc Uploaded on - 21/08/2020 The   Andhra   Pradesh   High   Court   in Vijayasanthi Investments Pvt. Ltd. v. Chief Commr. of I.T., (1991)187 ITR 405 held that under Section 127 the giving of a reasonable opportunity of being heard   wherever   it   is   possible   to   do   so   is essential.  The  Division Bench held as under : “From  the  aforesaid  decisions,   it is   clear   that,   in   the   matter   of   the transfer of a case under Section 127 of the   Act,   it   is   necessary   that   the authority   which   proposes   to   transfer the case must, wherever it is possible to   do   so,   give   the   assessee   a reasonable   opportunity   of   being   heard with   a   view   to   enable   him   to effectively   show   cause   against   the proposed   transfer.     The   notice   must also   propose   to   give   a   personal hearing.“ 13 A Single Judge of the Calcutta High Court in Chhota Nagpur Industrial Gases (P) Ltd. v. CIT (1998) 233 ITR 377 held that the provision of a reasonable opportunity of hearing the assesee was mandatory   when   it   was   possible   to   give   such   a hearing.   It was held that the entire proceeding was vitiated because of the denial of a reasonable opportunity of hearing to the assessee. SNC 13/23 WP 596-12.doc Uploaded on - 21/08/2020 A Division Bench of the Delhi High Court in   Melco   (P)   Ltd.   v.   CIT,   (2003)   260   ITR   450 followed the Judgment of the Andhra Pradesh High Court in Vijayasanthi Investments Pvt. Ltd. (Supra) 15(A) Section 127 fell for the consideration of a   Constitution   Bench   of   the   Supreme   Court   in Kashiram Aggarwalla v. Union of India, (1965)1 SCR 671   =   (1965)   56   ITR   14. The   Supreme   Court considered   Section   127   prior   to   its   amendment. However,   for   the   present   purpose,   the   position remained  the  same.    Section 127(1)  prior  to its amendment,   insofar   as   it   was  relevant,  read   as under: “127. The   Commissioner   may,   after giving   the   assessee   a   reasonable opportunity   of   being   heard   in   the matter, wherever it is possible to do so and after recording his reasons for doing so, transfer any case from one Income Tax Officer subordinate to him, to   another   also   subordinate   to   him. and   the   Board   may   similarly   transfer any case from one Income Tax Officer to another: Provided   that   nothing   in   this   sub­ section shall be deemed to require any such opportunity to be given where the transfer   is   from   one   Income   Tax SNC 14/23 WP 596-12.doc Uploaded on - 21/08/2020 Officer   to   another   whose   offices   are situate in the same city, locality or place.” (B) It   is   useful   to   note   that   the   Supreme Court   dealt   with   a   case   which   fell   within   the proviso   i.e.   the   transfer   was   from   one   ITO   to another   where   offices   were   situate   in   the   same city.  Such a case falls under sub­section (3) of section 127 as it now stands.  In the case before us the transfer is from one officer in Mumbai to another in New Delhi which falls within sub­section (2) of section 127 as it now stands and would have fallen   under   the   main   section   127   prior   to   its amendment.   The Supreme Court has noted and dealt with the two types of cases.   The Supreme Court held as under:

“3. ….............  It will be noticed that Section 127(1) requires that where the power conferred by it is intended to be exercised, an opportunity should be given to the assessee wherever it is possible to do so, and reasons have to be   recorded   for   making   the   order   of transfer. The requirement

that opportunity should be given, cannot be said to be obligatory, because it has been   left   to   the   discretion   of   the SNC 15/23 WP 596-12.doc Uploaded on - 21/08/2020 authority   to   consider   whether   it   is possible to give such an opportunity to the   assessee.   It   is,   of   course,   true that in coming to the conclusion that it is not possible to give the required opportunity   to   the   assessee,   the authority must act reasonably and bona fide; but if the authority comes to the

conclusion that it is not possible to give   a   reasonable   opportunity   to   the assessee, that can be dispensed with. That, however, is not so with regard to the   requirement   that   reasons   must   be recorded   for   making   the   transfer.   So far   as   Section   127(1)   is   concerned, there   is   no   dispute   about   this position.

4.

The   question   which   calls   for   our decision   in   the   present   appeals   is: what is the effect of the proviso to Section 127(1)? The proviso lays down that nothing in sub­section (1) shall be   deemed   to   require   any   such opportunity to be given in a case like the   present.   It   is   plain   that   the transfer   in   the   present   case   is   from one Income Tax Officer to another whose offices   are   situate   in   the   same locality; and so, the point to consider is, what is the effect of this proviso? It is urged by Mr Jain that the effect of the proviso is that the requirement as   to   the   giving   of   a   reasonable opportunity alone is dispensed with in respect   of   cases   falling   under   the proviso, but not the requirement as to the recording of reasons. If the words used   in   the   proviso   are   literally construed, it may have to be conceded that   there   is   some   force   in   this contention.

5.

But,   on   the   other   hand,   the provision   that   nothing   in   sub­section SNC 16/23 WP 596-12.doc Uploaded on - 21/08/2020 (1)   shall   be   deemed   to   require   any opportunity to be given, is worded in an emphatic form; and that fact has to be   borne   in   mind   in   considering   the effect   of   the   proviso.  Besides,   it would   not   be   unreasonable   to   assume that   the   recording   of   reasons prescribed by Section 127(1) would be appropriate where a transfer is being made   otherwise   than   in   the   manner prescribed   by   the   proviso.   In   such   a case, normally, the assessee has to be given   a   reasonable   opportunity   to   be heard;  and   the   natural   corollary   of this requirement is that his objections to   the   transfer   should   be   considered and reasons given why the transfer is made   despite   the   objection   of   the assessee.   In   other   words,   the requirement   as   to   the   recording   of reason flows as a natural consequence and corollary of the requirement that a reasonable opportunity should be given to   the   assessee.   If,   however,   a reasonable opportunity is not given to the assessee on the ground that it is not possible to do so, Section 127(1) requires that the transfer being of a category where a reasonable opportunity should   be   given   to   the   assessee,   the authority should record its reasons for making   the   transfer,   even   though   no opportunity   was   in   fact   given   to   the assessee. If that be the true position, it is not easy to understand why the proviso   should   be   so   construed   as   to require   reason   to   be   given   for   the transfer, even though no opportunity to the assessee is required to be given. That is one aspect of the matter which has to be borne in mind in determining the   true   scope   and   effect   of   the proviso. “ (emphasis supplied) SNC 17/23 WP 596-12.doc Uploaded on - 21/08/2020 The   Supreme   Court   has   therefore   clearly held that a reasonable opportunity should be given to the assessee wherever it is possible to do so. The   opportunity   referred   to   is   a   reasonable opportunity   of   being   heard.   There   is   no   other opportunity   referred   to   in   the   section.   The observation   in   paragraph   3   that   the   opportunity cannot be said to be obligatory, refers to those cases   where   it   is   not   possible   to   give   such   an opportunity to the assessee.  The discretion of the authority   is   only   to   consider   whether   it   is possible   to   give   such   an   opportunity   to   the assessee or not.   This is clear from the fact that the   Supreme   Court   went   on   to   hold   that   if   the authority comes to the conclusion that it is not possible to give a reasonable opportunity, the same can be dispensed with. It is also important to note that the Supreme Court dealt with a case where the transfer was from one ITO to another, whose office was situate in the same locality.  The proviso to section 127(1) prior to its amendment was similar to   sub­section   (3)   which   was   introduced   by   the SNC 18/23 WP 596-12.doc Uploaded on - 21/08/2020 amendment. The doubt if any, if set at rest by the observations in paragraph 5 that where a transfer is   being   made   otherwise   than   in   the   manner described by the  proviso, (i.e. not from one ITO to another whose offices are situate in the same city, locality or place) normally the assessee has to be given a reasonable opportunity to be heard. In other words, it is only where it is not possible to offer the assessee an opportunity of being beard that   the   requirement   of   giving   him   a   reasonable opportunity of being heard is dispensed with. 17 It is important to note that under Section 5(7­A) of the Indian Income­tax Act, 1922, there was no requirement of the assessee being given a reasonable   opportunity   of   being   heard.     Section 5(7­A) of the 1922 Act read as under: “Section   5(7­A)   The   Commissioner   of Income­tax may transfer any case from one   Income­tax   Officer   subordinate   to him to another, and the Central Board of Revenue may transfer any case from any one Income­tax Officer to another. Such transfer may be made at any stage SNC 19/23 WP 596-12.doc Uploaded on - 21/08/2020 of   the   proceedings,   and   shall   not render   necessary   the   reissue   of   any notice already issued by the Income­tax Officer   from   whom   the   case   is transferred.” The introduction in Section 127(1) and (2) of the 1961 Act indicates the legislative intent of providing an assessee a reasonable opportunity of being heard in cases falling under sub­sections (1) & (2) thereof. 18 In conclusion therefore we hold that the word   “may”   in   Section   127   should   be   read   as “shall”.  The requirement of giving an assessee a reasonable opportunity of being heard wherever it is possible to do so, is mandatory. The discretion of   the   authorities   is   only   as   to   what   is   a reasonable opportunity in a given case and on the question, whether it is possible in a given case to provide the opportunity.

19 Mr. Pinto then submitted that on several occasions   the   assessee   had   appeared   before respondent no.

1.

He relied upon an affidavit in SNC 20/23 WP 596-12.doc Uploaded on - 21/08/2020 sur­rejoinder   filed   by   respondent   no.1   who   had passed the impugned order.   In paragraph 1 it is stated that sufficient opportunity of being heard was   given   to   the   Counsel   appearing   for   the petitioner   before  the  impugned  order  was   passed. He   was   however,   unable   to   indicate   anything   in support of this averment.  The affidavit does not even   furnish   the   approximate   date   on   which   the petitioner's   Counsel   were   heard. As   stated earlier, the petitioners' objections were filed on 19.12.2011   and   the   impugned   order   was   passed   on 05.01.2012 i.e. within 16 days.  Paragraphs 6 & 7 of   the   affidavit   in   sur­rejoinder   refer   to   the petitioner's   letter   dated   19.12.2011   and   the impugned order dated 05.01.2012 respectively.  All that   is   stated   in   paragraph   7   is   that   “these submissions (i.e. the submissions contained in the petitioner's   letter   dated   19.12.2011)   were   taken into consideration.” No details have been furnished as   to   when   the   petitioner's   Counsel   were   heard. Paragraph   8   merely   states   that   the   sequence   of facts and correspondence indicate that sufficient SNC 21/23 WP 596-12.doc Uploaded on - 21/08/2020 opportunities   of   being   heard   were   given   to   the petitioner without furnishing details in respect of the alleged hearing. Paragraph   8   of   the   sur­rejoinder   further states   that   the   petitioner   had   indicated   in   its letter that it preferred to submit its objection in writing and that the same were therefore considered before   passing   the   impugned   order.   This   is incorrect.     In   the   correspondence   which   we   have already  referred   to  the  petitioner   had  expressly requested for a personal hearing. 20 In the circumstances, the impugned order is liable to be set aside on the ground that the petitioner had not been heard. 21

Mr.   Pardiwalla,   the   learned   Senior Counsel appearing for the Petitioners agreed that the   order   being   set   aside   does   not   affect   the respondent's   case   in   any   manner   whatsoever   on merits or otherwise including on the question of limitation. SNC 22/23 WP 596-12.doc Uploaded on - 21/08/2020 Rule is therefore made absolute in terms of prayer (a).  Respondent no.1 shall after hearing the petitioner pass a fresh order. The Writ Petition is accordingly disposed of. No order as to costs. (M.S. SANKLECHA, J.) (S.J.VAZIFDAR, J.) SNC 23/23 WP 596-12.doc Uploaded on - 21/08/2020 Powered by TCPDF (www.tcpdf.org)

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