M/S. P.M. BUILDWELL PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

ORDER The present appeal has been filed by the assessee assailing the correctness of the order dated 19.05.2015 of CIT(A)-7, Delhi passed u/s 154 of the Income Tax Act, 1961 pertaining to 2008-09 assessment year on the following grounds:-

1) “That the Hon'ble Commissioner of Income Tax (Appeals) has erred in law as much as on the facts of the case in rejecting the application filed by the appellant u/sec. 154 of the Income Tax Act, 1961 arbitrarily and without providing any opportunity of being heard u/sec. 154(3) of the Act with special reference to the fact that such request was specifically made for such opportunity to the appellant. 2) That the Hon'ble Commissioner of Income Tax (Appeals) has rejected the application of the appellant merely on suspicious and surmises which is bad in law. She did not pass the speaking order giving point-wise reasons for rejection of the application u/sec. 154 of the Act.

It is, therefore, kindly prayed that the unlawful order of the Hon'ble Commissioner of Income Tax (Appeals) passed u/sec. 154 of the Act may kindly be cancelled / quashed after providing an opportunity of being heard to the appellant.” (emphasis provided)

I.T.A .No.-4835/Del/2015

2. At the time of hearing, an adjournment petition was moved on behalf of the assessee seeking time. However, considering the material available on record and the specific grievance addressed by the assessee vide Ground No.2, the Ld. Sr.DR in the context of the grounds raised was required to address whether the impugned order can be said to be a speaking order wherein the Ld. CIT(A) at pages 1 to 6 extracts the written submissions of the assessee and decides the same with the following observation:-

I.T.A .No.-4835/Del/2015 has also been evidently granted. Thus, notwithstanding the conclusion that mere reproduction of the petition and dismissal of the same by one line cannot be said to be a speaking order even otherwise the impugned order it is held cannot be sustained.

3.1. Right to be heard is an important right to which a party who is faced with an adverse view is entitled to “Audi alteram partem” is one of the most famous and celebrated Rule of Natural Justice. The principles of natural justice are those which have been laid out by the Courts as being the minimum protection of the rights of an individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights. A careful perusal of the consistent judgements of the Apex Court would show that it has consistently been held that the Rules of natural justice are not embodied rules and the said phrase is not and cannot be capable of a precise definition. The underlying principle of natural justice evolved under the common law is to check arbitrary exercise of power by the State or its functionaries.

Accordingly, the principle by its very nature implies the duty to act fairly i.e. fair play in action must be evident at every stage. Fair play demands that nobody shall be condemned unheard.

3.2. In the celebrated judgement of the Apex Court in the case of A.K.Kraipak –vs- Union of India (1969) 2 SCC 262, it is observed that the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. The said rules are means to an end and not an end in themselves and though it is not possible to make an exhaustive catalogue of such rules however it can be readily said that there are two basic maxims of natural justice namely “audi alteram partem” and “nemo judex in re sua”. In the present facts of the case we are concerned with the maxim “audi alterm partem” which again may

I.T.A .No.-4835/Del/2015 have many facets two of them (a) notice of the case to be met; and (b) opportunity to explain. Their Lordships have cautioned that these rules cannot be sacrificed at the altar of the administrative convenience or celebrity. Accordingly, the issue is restored back to the file of the CIT(A) with a direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.