KLIPCON PROPERTIES AND GARDENS PVT LTD AN ANR vs. UNION OF INDIA AND ORS.

PDF · subscribers
WPA/12020/2021HC CalcuttaWBCHCA022952202124 September 2021Bench: HON'BLE JUSTICE MD. NIZAMUDDIN4 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the impugned assessment orders dated May 10, 2021, were passed in violation of the principle of natural justice. This violation stemmed from the failure to consider and dispose of the petitioners' representations dated April 23, 2021, and May 4, 2021, and from not providing an opportunity for hearing on these objections. The Tribunal explicitly stated that it was not going into the merits of the assessment orders or the objections themselves. The ratio decidendi is that failure to provide a hearing and consider objections before passing an assessment order, especially under Section 153C, constitutes a violation of natural justice, rendering the order liable to be set aside. The Tribunal set aside the impugned assessment order and remanded the case to the respondents to consider and dispose of the two representations in accordance with law, by passing a reasoned and speaking order, and after giving an opportunity of hearing to the petitioners within four weeks. The continuation of assessment proceedings would depend on the outcome of this disposal.

What were the facts?

The petitioners, Klipcon Properties and Gardens Pvt. Ltd. & Anr., challenged assessment orders dated May 10, 2021, passed under Sections 153C read with Section 144 of the Income Tax Act, 1961. They contended that these orders were issued without considering and disposing of their objections/representations dated April 23, 2021, and May 4, 2021. The first representation objected to the recorded reasons for issuing the Section 153C notice, while the second requested a copy of the satisfaction note for initiating proceedings under Section 153C. The petitioners argued this violated principles of natural justice. The revenue authorities could not satisfy the court that these objections were considered and disposed of with an opportunity for hearing before the assessment orders were passed.

What were the issues?

1. Whether the impugned assessment orders dated May 10, 2021, passed under Sections 153C read with Section 144 of the Income Tax Act, 1961, are invalid on the ground of violation of the principle of natural justice, specifically for not considering and disposing of the petitioners' objections/representations dated April 23, 2021, and May 4, 2021, before passing the assessment orders? Assessee's Contentions: The petitioners argued that the assessment orders were passed in violation of the principle of natural justice because their objections/representations were not considered, disposed of, or addressed with an opportunity for hearing prior to the issuance of the assessment orders. They relied on the general principles of natural justice. Revenue's Contentions: The revenue authorities, when asked to produce records or provide instructions regarding the consideration of the petitioners' objections, could not satisfy the court that these objections were considered and disposed of with an opportunity for hearing before the assessment orders were passed.

Which sections of the Income-tax Act were involved?

Section 153C,Section 144

AI-generated summary — verify with the full judgment below

24.09.2021 ks Sl. No.22

W.P.A. 12020 of 2021

Klipcon Properties and Gardens Pvt. Ltd. & Anr.

Vs. Union of India & Ors.

Mr. Abhratosh Mazumdar, Mr. Arijit Chakrabarti, Mr. Rudrajit Sarkar, Mr. Anirban Ray, Mr. Aasish Choudhury, Ms. Anupa Banerjee, Ms. Puja Tripathi, Mr. Rabindra Kumar Mitra.

……for the petitioners. Mr. S. Roy Chowdhury, Mr. Soumen Bhattacharya.

…….for the respondents.

Heard both the parties. In this writ petition, the petitioners have challenged the impugned assessment order dated 10th May, 2021 under Sections 153C read with Section 144 of the Income Tax Act, 1961 being Annexure P-8 to the writ petition on the ground that the aforesaid orders were passed without considering and disposing of the petitioners’ objection/representation dated 23rd April, 2021 being Annexure P-5 to the Writ Petition against the recorded reasons for issuing notice under Section 153C of the Act and objection/representation dated 4th May, 2021 being Annexure-P-7 to the writ petition making prayer for furnishing copy of the satisfaction note for initiating proceedings under Section 153C of the Income Tax Act against the petitioners.

2 Learned Advocate appearing for the petitioners submits that the aforesaid impugned assessment orders dated 10th May, 2021 were passed in violation of principle of natural justice by not giving any hearing to the petitioners and not disposing of the aforesaid objections/representations before passing the aforesaid impugned assessment orders. Learned Advocate appearing for the Income Tax Authorities when asked to produce the record or instructions as to whether the aforesaid two objections were considered and disposed of by the respondents concerned by giving opportunity of hearing to the petitioners before passing the aforesaid impugned assessment orders dated 10th May, 2021, he could not satisfy the court from record or from his submission that before passing the aforesaid impugned assessment orders, the aforesaid two representations/objections were considered and disposed of and petitioners were given opportunities of hearing on the aforesaid objections/representations. Considering the submission of the parties and facts as appears on perusal of the records I am of the view that a very short issue, according to me, involved in these writ petition is as to whether before passing the aforesaid impugned assessment orders, the objections/representations made by the petitioners against

3 the initiation of impugned proceedings under Section 153C of the Income Tax Act, 1961 were considered or not and if not, then is it a violation of principle of natural justice? Since in this case it appears from record that the aforesaid representations/objections of the petitioners were not considered and disposed of before passing the aforesaid impugned assessment orders an no opportunity of hearing was given to the petitioners which is a clear violation of principle of natural justice, without going into the merits of the impugned assessment orders and the aforesaid objections/representations of the petitioners, on the ground of violation of principle of natural justice alone, I am setting aside the aforesaid impugned assessment order dated 10th May, 2021 being Annexure P-8 to the writ petition and remanding the case of the petitioners to the respondents concerned to consider and dispose of the aforesaid two representations/objections dated 23rd April, 2021 and 4th May, 2021 made by the petitioners in accordance with law and by passing a reasoned and speaking order and after giving an opportunity of hearing to the petitioners or their authorised representative within four weeks from the date of communication of this order and further continuation of the assessment proceedings in question will depend upon the outcome of the final order to be passed upon the aforesaid objections/representations of the petitioners.

4 It is recorded that this court has set aside the aforesaid impugned assessment orders on limited ground of violation of principle of natural justice of not considering and disposing of the aforesaid representations/objections of the petitioners and this Court has not gone into the merits of the case. In this matter, the respondent Assessing Officer will proceed strictly in accordance with law while disposing of the aforesaid representations/objections of the petitioners. With the above directions, this writ petition being W.P.A No. 12020 of 2021 is disposed of.

(Md. Nizamuddin, J.)

More judgments on Section 153C

All 9,619 judgments and leading authorities on Section 153C →

Recent GST High Court judgments

Search GST case law →