The Division Bench of the Delhi High Court in the case of M/S The IndurePvt. Ltd. vs The Principal Commissioner of Income Tax, Delhi &Anr.consisting of Justices Manmohan and Manmeet Pritam Singh Arorareiterated that principles of natural justice cannot be petrified or fitted into rigid moulds. They are flexible and turn on the facts and circumstances of each case.
Facts
This petition was filed challenging the order passed by the Respondent No. 2 u/s 148A(d) of the Income Tax Act, 1961 (‘Act’) and notice issued by the Respondent No.2 u/s 148 of the Act for the Assessment Year 2013-14. It also sought direction to the Respondent No. 2 to reopen the income tax portal of the Petitioner Company and allow it three working days to file a reply to the show cause notice dated 20thMay 2022 and to restrain the Respondents from continuing any proceedings in pursuance to impugned order and impugned notice during the pendency of the present writ petition.
Contentions Made
Petitioner: The impugned order was passed without giving the Petitioner a reasonable time of two weeks to file its objection, as directed by the Supreme Court in Union of India & Ors. v. Ashish Aggarwal and as requested by the Petitioner vide a letter. The documents annexed to the notice which were relied upon by Respondent No.2 for alleging ‘escapement of income’ by the Petitioner Company, were completely illegible and unreadable and after almost a month, it provided legible/readable copies of the same along with various additional documents.
Respondent: Legible copies of the documents were provided to the Petitioner at the initial stage itself and out of abundant precaution, another set of clear and legible copies of the documents were further provided. The documents annexed by the Petitioner in this petition clearly shows that the bills relied upon by the Petitioner were fabricated since they do not mention the address and mobile number of the supplier. Even in the transportation bills, the consignor address has not been mentioned.
Observations of the Court
The Bench observed:
“It is settled law that ‘principle of natural justice is no unruly horse and no lurking land mine’ as held by Mr.Justice Krishna Iyerin Chairman, Board of Mining Examination and Chief Inspector of Mines Vs. Ramjee, (1997) 2 SCC 256. In fact, in M/s S.Tikara Vs. State of M.P. & Ors, AIR 1997 SC 1691, it has been held that the principles of natural justice cannot be petrified or fitted into rigid moulds. They are flexible and turn on the facts and circumstances of each case.”
Thus, the question raised in here was whether there was any unfair deal by the respondent?
It was further noted one of the alleged suppliers of the petitionermade a statement that he had not carried out the transactions with the petitioner which appeared in his bank account. So, the matter had to proceed further.
Judgment
The Bench concluded that even if the documents now sought to be relied upon by the petitioner were considered, the notice u/s 148 of the Act was valid as a prima facie case of escapement of income was made out. Moreover, as it is the case of the Respondents that, in the first instance, clear and legible copies were supplied to the Petitioner, the said dispute could not be adjudicated in the writ proceedings. So, the present writ petition along with pending application was dismissed.However, it was clarified that the Assessing Officer shall decide the matter on its own merits without being influenced by any observation made in this order.
Case:M/S The IndurePvt. Ltd. vs The Principal Commissioner of Income Tax, Delhi &Anr.
Citation: W.P.(C) 10307/2022
Bench: Justice Manmohan, Justice Manmeet Pritam Singh Arora
Decided on: 8th July 2022
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