GHORAMARA TEA ESTATE AND ENTERPRISE PVT LTD AND ANR vs. UNION OF INDIA AND ORS.

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WPA/12043/2021HC CalcuttaWBCHCA022953202124 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 25, 2021, were passed in violation of the principles of natural justice. This was because the petitioners' representations/objections dated April 23, 2021, and May 4, 2021, were not considered and disposed of, nor was an opportunity of hearing provided to the petitioners before the assessment orders were issued. The Tribunal explicitly stated that it was not going into the merits of the assessment orders or the objections themselves. Consequently, the assessment orders were set aside solely on the ground of violation of natural justice. The case was remanded to the respondents to consider and dispose of the two representations/objections in accordance with law, by passing a reasoned and speaking order, and after giving the petitioners an opportunity of hearing within four weeks. The continuation of assessment proceedings would depend on the outcome of the disposal of these objections.

What were the facts?

The petitioners, Ghoramara Tea Estate & Enterprise Pvt. Ltd. & Anr., challenged assessment orders dated May 25, 2021, passed under Sections 153C read with Section 144 of the Income Tax Act, 1961. They contended that these orders were passed without considering their objections/representations dated April 23, 2021, and May 4, 2021. The first representation was against the recorded reasons for issuing a Section 153C notice, and the second requested a copy of the satisfaction note for initiating Section 153C proceedings. The petitioners argued that this violated the principles of natural justice by not providing a hearing or disposing of their objections before passing the assessment orders.

What were the issues?

1. Whether the impugned assessment orders dated May 25, 2021, passed under Section 153C read with Section 144 of the Income Tax Act, 1961, are vitiated by a violation of the principles of natural justice due to the non-consideration and non-disposal of the petitioners' objections/representations dated April 23, 2021, and May 4, 2021, prior to their passing? Assessee's contentions: The assessment orders were passed in violation of the principles of natural justice as the petitioners were not given a hearing and their objections/representations were not considered or disposed of before the orders were issued. Revenue's contentions: The learned Advocate for the Income Tax Authorities could not satisfy the court from the record or submissions that the petitioners' objections/representations were considered and disposed of with an opportunity of 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

S/L 6 09.11.2021 Court. No. 2 cm WPA 12043 of 2021 Ghoramara Tea Estate & Enterprise Pvt. Ltd. & Anr. Vs. Union of India & Ors. (Through Video Conference) Mr. Abhratosh Mazumdar, Mr. Arijit Chakrabarti, Mr. Aasish Choudhury, Ms. Anupa Banerjee, Ms. Puja Tripathi, Mr. Rabindra Kumar Mitra. ……for the petitioners. Mr. S. Roy. Chowdhury Mr. Soumen Bhattacharjee …. For the Respondents. Supplementary affidavit filed today be kept with the record. Heard both the parties. In this writ petition, the petitioners have challenged the impugned assessment orders dated 25th 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-9 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 25th 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 25th 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 the initiation of impugned proceedings under

3 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 orders dated 25th 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 5th 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. 12043 of 2021 is disposed of. (Md. Nizamuddin, J.)

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