NORKA ROOTS vs. THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS)

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WP(C)/23251/2020HC KeralaKLHC01058092202013 November 2020Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the order passed by the 3rd respondent (Ext.P11) cannot be legally sustained. The Court found that the order was vitiated by a non-compliance with the rules of natural justice, as the petitioner was not heard before its pronouncement. Consequently, the High Court quashed Ext.P11 and directed the 3rd respondent to pass fresh orders after hearing the petitioner. The petitioner was directed to appear before the 3rd respondent on November 30, 2020, either physically or through video conferencing. The 3rd respondent was instructed to pass fresh orders within one month thereafter. The ratio decidendi is that any order passed without affording a hearing to the affected party violates the principles of natural justice and is therefore liable to be set aside.

What were the facts?

The petitioner, NORKA ROOTS, formerly known as ROOTS-NRK DEVELOPMENT INITIATIVE, filed a writ petition before the High Court of Kerala. The petitioner was aggrieved by Ext.P11, a common order passed by the 3rd respondent, the Commissioner of Income Tax (Exemptions), in revision applications preferred under Section 264 of the Income Tax Act. The primary challenge to Ext.P11 was that the petitioner was not afforded a hearing by the 3rd respondent before the order was passed. The High Court heard arguments from both the petitioner and the respondents.

What were the issues?

1. Whether the order passed by the 3rd respondent (Commissioner of Income Tax (Exemptions)) is legally sustainable when the petitioner was not heard before its pronouncement, thereby violating principles of natural justice, in relation to revision applications filed under Section 264 of the Income Tax Act? Assessee's Contention: The petitioner argued that the order (Ext.P11) passed by the 3rd respondent is vitiated by a non-compliance with the rules of natural justice because the petitioner was not heard before the order was passed. Revenue's Contention: The judgment records that the learned Standing Counsel appearing for the respondents was heard, but does not specify the revenue's contentions regarding the alleged violation of natural justice.

Which sections of the Income-tax Act were involved?

Section 264

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 13TH DAY OF NOVEMBER 2020 / 22ND KARTHIKA, 1942 WP(C).No.23251 OF 2020(F) PETITIONER/S: NORKA ROOTS (FORMERLY KNOWN AS ROOTS-NRK DEVELOPMENT INITIATIVE), NORKA CENTRE, NEAR GOVT.GUEST HOUSE, THYCAUD P.O., THIRUVANANTHAPURAM-695 014, REP. BY ITS CHIEF EXECUTIVE OFFICER. SHRI. K.HARIKRISHNAN NAMBOOTHIRI BY ADVS. SRI.T.M.SREEDHARAN (SR.) SMT.NISHA JOHN SRI.V.P.NARAYANAN RESPONDENT/S: 1 THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS) AAYKAR BHAVAN, KOWDIAR P.O., THIRUVANANTHAPURAM-695 003 2 THE COMMISSIONER OF INCOME TAX AAYKAR BHAVAN, KOWDIAR P.O., THIRUVANANTHAPURAM-695 003 3 THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) SAN JUAN TOWERS, BEHIND C.R.BUILDING, ERNAKULAM, COCHIN-682 018 OTHER PRESENT: SC ADV.CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.11.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.23251 OF 2020(F) 2

JUDGMENT

The petitioner has approached this Court aggrieved by Ext.P11 common order of the 3rd respondent in revision applications that were preferred by the petitioner under Section 264 of the Income Tax Act. In the writ petition, the main challenge against Ext.P11 order is that before passing the said order, the petitioner was not heard by the 3rd respondent.

2.

I have heard the learned counsel appearing for the petitioner and also the learned Standing Counsel appearing for the respondents.

On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, and finding that the 3rd respondent while passing Ext.P11 order did not hear the petitioner, I am of the view that Ext.P11 order cannot be legally sustained in as much as it is vitiated by a non- compliance with the rules of natural justice. Accordingly, I quash Ext.P11 order and direct the 3rd respondent to pass fresh orders in the matter, after hearing the petitioner. To enable the 3rd respondent to do so, I direct the petitioner to appear before the 3rd respondent at 11:00 AM on 30.11.2020 either through physical appearance or through video conferencing, as the case maybe. The 3rd respondent shall pass fresh orders as directed within a month thereafter. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before the 3rd respondent, for further action. A.K.JAYASANKARAN NAMBIAR

JUDGE SJ

WP(C).No.23251 OF 2020(F) 3

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF REGISTRATION DATED 20.12.2002 ISSUED BY THE REGISTRAR OF COMPANIES, KERALA EXHIBIT P2 TRUE COPY OF THE AMENDED CERTIFICATE OF REGISTRATION DATED 24.05.2005 ISSUED BY THE REGISTRAR OF COMPANIES, KERALA EXHIBIT P3 TRUE COPY OF THE ASSESSMENT ORDER DATED 28.03.2015 FOR THE ASSESSMENT YEAR 2009-10 ISSUED BY THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), THIRUVANANTHAPURAM ALONG WITH DEMAND NOTICE. EXHIBIT P4 TRUE COPY OF ASSESSMENT ORDER DATED 31.3.2013 FOR THE ASSESSMENT YEAR 2010-11 ISSUED BY TE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS), THIRUVANANTHAPURAM ALONG WITH DEMAND NOTICE EXHIBIT P5 TRUE COPY OF ASSESSMENT ORDER DATED 15.3.2015 ISSUED BY TE DEPUTY DIRECTOR OF INCOME TAX, CPC, BANGALORE, FOR THE ASSESSMENT YEAR 2013-14 EXHIBIT P6 TRUE COPY OF ASSESSMENT ORDER DATED 10.3.2016 ISSUED BY TE DEPUTY DIRECTOR OF INCOME TAX, CPC, BANGALORE, FOR THE ASSESSMENT YEAR 2014-15 EXHIBIT P7 TRUE COPY OF ASSESSMENT ORDER DATED 29.3.2017 ISSUED BY TE DEPUTY DIRECTOR OF INCOME TAX, CPC, BANGALORE, FOR THE ASSESSMENT YEAR 2015-16 EXHIBIT P8 TRUE COPY OF ASSESSMENT ORDER DATED 27.12.2018 ISSUED BY TE ASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTION), THIRUVANANTHAPURAM, FOR AY 2016-17 EXHIBIT P9 TRUE COPY OF REVISION APPLICATION U/S.264 DATED 28.11.2018 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2009-10 EXHIBIT P9 (A) TRUE COPY OF REVISION APPLICATION U/S.264 WP(C).No.23251 OF 2020(F) 4 DATED 28.11.2018 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2010-11 EXHIBIT P9 (B) TRUE COPY OF REVISION APPLICATION U/S.264 DATED 28.11.2018 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2013-14 EXHIBIT P9 (C) TRUE COPY OF REVISION APPLICATION U/S.264 DATED 28.11.2018 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2014-15 EXHIBIT P9 (D) TRUE COPY OF REVISION APPLICATION U/S.264 DATED 28.11.2018 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2015-16 EXHIBIT P9 (E) TRUE COPY OF REVISION APPLICATION U/S.264 DATED 28.11.2018 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2016-17 EXHIBIT P10 TRUE COPY OF THE REPRESENTATION DATED 12.6.2020 SENT BY THE PETITIONER TO THE 3RD RESPONDENT EXHIBIT P11 TRUE COPY OF THE ORDER NO.ITBA/COM/F/17/2020 21/1027433139(1) DATED 3.7.2020 ISSUED BY THE 3RD RESPONDENT

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