{"id":8670,"date":"2020-10-24T11:15:21","date_gmt":"2020-10-24T05:45:21","guid":{"rendered":"https:\/\/itatonline.org\/articles_new\/?p=8670"},"modified":"2020-10-24T12:17:01","modified_gmt":"2020-10-24T06:47:01","slug":"natural-justice-and-writ-petitions-video-transcript-of-webinar","status":"publish","type":"post","link":"https:\/\/itatonline.org\/articles_new\/natural-justice-and-writ-petitions-video-transcript-of-webinar\/","title":{"rendered":"Natural Justice And Writ Petitions (Video + Transcript Of Webinar)"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/itatonline.org\/articles_new\/wp-content\/uploads\/Shashi-Bekal.jpg\" alt=\"Shashi Bekal\" width=\"129\" height=\"150\" class=\"alignleft size-full wp-image-6435\" srcset=\"https:\/\/itatonline.org\/articles_new\/wp-content\/uploads\/Shashi-Bekal.jpg 129w, https:\/\/itatonline.org\/articles_new\/wp-content\/uploads\/Shashi-Bekal-100x116.jpg 100w\" sizes=\"auto, (max-width: 129px) 100vw, 129px\" \/><\/p>\n<p><strong>The All India  Federation of Tax Practitioners (AIFTP Western zone) had organized a Webinar on  June 14, 2020 on the subject of &ldquo;Principles of Natural justice as applicable  to Tax proceedings and Writs in taxation&rdquo;. The speaker was Advocate Mr.  Manish J.Shah, Ahmedabad and Chairman was Dr K. Shivaram, Senior Advocate, Mumbai. For the benefit of the readers, a brief summary of the proceedings has been prepared by Advocate Shashi Bekal<\/strong><\/p>\n<p>Chairman in his  introduction referred the Article 265 of the Constitution of India 1950.&nbsp; <strong><\/strong><\/p>\n<p><strong><em>&ldquo;No tax shall be levied or collected except by  authority of law&rdquo;<\/em><\/strong><\/p>\n<p>Article 265 is  the foundation for various Writ Petitions under the Income tax Law. <\/p>\n<p><!--more--><\/p>\n<p><iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/kqn9QnppUIQ\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>The collection of tax has to be also  within the frame work of law. The&nbsp;<strong><em>Circular  No. 14 (XL-35), dt. <\/em><\/strong><strong><em>11\/04\/1955<\/em><\/strong>, also states that  a duty is cast upon the Assessing Officerto assist and aid the assessee in the  matter of taxation. Assessing Officersare supposed to advise the assessee and  guide them and nottake advantage of any error or mistake committed by the  assessee or of their ignorance. The function of the Assessing officeris to  administer the statute with solicitude for public exchequer with an inbuilt  idea of fairness to taxpayers.&nbsp;The  scope of the above circular is explained in <strong><em>CIT v. AhmedabadKeiser-E.  Hind Mills Co. Ltd(1981)128 ITR 486 (Guj.) (HC) (492), Parekh Bros v. CIT  (1984) 150 ITR 105 (Ker) (HC) (118)<\/em><\/strong>, and <strong><em>Dattatraya Gopal Sathe  v. CIT (1984) 150 ITR 460 (Bom.)(HC) (463-464)<\/em><\/strong><\/p>\n<p><strong>Chairman  referred the following case laws:<\/strong><\/p>\n<p><strong>Natural  Justice <\/strong><\/p>\n<p><strong><em>Dharkeswari Cotton Mills Ltd v CIT (1954) 26 ITR 775  (SC)<\/em><\/strong><br \/>\n  Violation of  principle of natural justicemay lead to violation of Fundamental rights of  equality guaranteed by Articles14 or 21 of the Constitution of India.<\/p>\n<p><strong><em>R.B Shreeram Durga Prasad &amp;Fatechand Nursing Das v  Settlement Commission (1969) 176 ITR 169 (SC)<\/em><\/strong><br \/>\n  Where the  principle of natural justice violated, the Supreme Court set aside the  assessment.<\/p>\n<p><strong><em>Maneka Gandhi v UOI1978 AIR 597(SC)\/1978 SCR (2) 621  (SC)<\/em><\/strong><br \/>\n  Art 21: Natural  Justice &ndash; Opportunity to be heard is universally  recognized as an essential ingredient of principle of natural justice. <\/p>\n<p><strong><em>Kishanchand Chellaram v. CIT (1980) 125ITR 713 (SC)<\/em><\/strong><br \/>\n  Authorities  cannot use the statement without giving an opportunity of cross examination <\/p>\n<p><strong><em>C.B Gautam v. UOI (1993) 199 ITR 530 (SC)<\/em><\/strong><br \/>\n  Violation of the  principle of natural justice may lead to violation of Fundamental rights of  equality guaranteed by Article 14 or 21 of the Constitution of India<\/p>\n<p><strong><em>Sona Builders v UOI(2001)251 ITR 197 (SC) <\/em><\/strong><br \/>\n  Only three days&rsquo;  notice to respond the notice -Order of appropriate  authority had to be quashed. Prayer for set  aside the matter was not entertained.<strong> <\/strong><\/p>\n<p><strong><em>Sahara<\/em><\/strong><strong><\/strong><strong><em> India<\/em><\/strong><strong><em> (Firm) v CIT (2008) 300 ITR 403 (SC) <\/em><\/strong><br \/>\n  Even in absence of an express provision for  affording an opportunity of pre-decisional hearing to an assessee and in  absence of any express provision in section 142(2A) barring giving of a  reasonable opportunity to an assessee, requirement of observance of principles  of natural justice is to be read into said provision&nbsp;<\/p>\n<p><strong><em>Andaman Timber Industries v CCE (2015) 127 DTR 241\/  281 CTR 241 (SC) <\/em><\/strong><br \/>\n  Order passed  denying the opportunity of crossexamination is violates principle of natural  justice which is a serious flaw which renders the order a nullity.<\/p>\n<p><strong><em>H.R Mehatav.ACIT (2016) 387 ITR 561(Bom)(HC) <\/em><\/strong><br \/>\n  Assessing Officer should have provided assessee  material used against him apart from providing him an opportunity to cross  examine deponents whose statements were relied upon (S.68) <\/p>\n<p><strong><em>CIT v Odeon Builders ( P ) Ltd ( 2019) 418 ITR 315 (SC) <\/em><\/strong><br \/>\n  Entire disallowance was based on third party  information gathered by Investigation Wing of Department, which had not been  independently subjected to further verification by Assessing Officer and he had  not provided copy of such statements to appellant, thus, denying opportunity of  cross examination to appellant.Addition was deleted . <\/p>\n<p>Further the Chairman  stated that the learned speaker has to discuss two subjectsi.e.1.Natural Justice  and 2.Writs<\/p>\n<p>Chairman stated  that,Natural Justice as applicable to tax proceedingscan be divided in to four  parts: 1.Appellate Tribunal, 2. Commissioners, 3. CIT (A) and 4. Assessing  Officer.<\/p>\n<p>Similarly, Writ  Petition, relating to tax proceedings can divided  &nbsp;into four parts, viz. 1. Order of Tribunal,  2.Order of Commissioner, 3. Order of CIT (A), and 4. Order of Assessing  Officer. <\/p>\n<p>1. <span dir=\"ltr\"><strong>Appellate  Tribunal<\/strong><\/span><\/p>\n<p><strong><em>CIT v. Tara Ripu Dhamanpal Trust (2018) 409 ITR 102 (P&amp;H)(HC)<\/em><\/strong><\/p>\n<p>Reasoned speaking order which is the mandate  as laid down by the Supreme Court in Kranti  Associates Pvt. Ltd. v. Masood Ahmed Khan (2010) 9 SCC 496 and Canara Bank v.  V. K. Awasthy (2005) SC 2090.<\/p>\n<p><strong><em>CC (Import)  Mumbai v. Wartsila <\/em><\/strong><strong><em>India<\/em><\/strong><strong><em> Ltd 2010 (254) ELT 406 (Bom) (HC) <\/em><\/strong><br \/>\n  Judgement cited but no reference found in  the order, nor any discussion with respect to rival submission found in the  order.One of the salutary requirements of natural justice is spelling out  reasons for the order made, in other words, a speaking out.Order of Tribunalwas  set aside. <\/p>\n<p><strong><em>Shapoorji Pallonji &amp; Co. Ltd v. CCES 2011(263) ELT 206  (Bom.) (HC) <\/em><\/strong><br \/>\n  Absence of reasons suggestive  of order being arbitrary and in breach of principle of natural justice. Order  of Tribunal wasset aside<\/p>\n<p><strong>DSP Investment Pvt. Ltd.  v. <\/strong><strong>ACIT<\/strong><strong>( ITA No 2342 of 2013 dt 8 -3 2016) ( AY.  2008 -09) &nbsp;(Bom.)(HC); <\/strong><a href=\"http:\/\/www.itatonline.org\/\"><strong>www.itatonline.org<\/strong><\/a><strong><u> <\/u><\/strong><\/p>\n<p>Non-consideration by the ITAT of a judgement of the  Co-ordinate Bench makes the order a non-speaking one and breaches the  principles of natural justice. Order of Tribunal was set aside. <\/p>\n<p><strong>Bhavya Construction Co. v. <\/strong><strong>ACIT<\/strong><strong>( ITA No. 1009 of 2017 dt 30-1 -2020 ( AY. 2007  -08) <\/strong><a href=\"http:\/\/www.itaatonline.org\/\"><strong>www.itatonline.org<\/strong><\/a><strong> <\/strong><br \/>\n    <strong>Relying on the case laws not cited by both the parties, not dealing  with the case law cited by the representative of the assessee. Matter remanded  to the Tribunal to pass the fresh order <\/strong><\/p>\n<p><strong><em>Reliance Infrastructure Ltd v. Dy .CIT (ITA  No.701of 2014 dt.29-11-2016 ( AY. 2008 -09) (2016) 76 taxmann.com 238 (Bom)  (HC) <\/em><\/strong><a href=\"http:\/\/www.itatonline\/\"><strong><em>www.itatonline<\/em><\/strong><\/a><strong><em>.org<\/em><\/strong><\/p>\n<p>Referring the judgment in  favour of assessee and not dealing with the case would make the order suspect. <em>Ex  facie<\/em>, it is a breach of principle of natural justice. Order of Tribunal  wasset aside.<\/p>\n<p><strong><em>Dattani and Co v. ITOITA No. 847 of 2013  dt 21-10 2013 (Guj) (HC) <\/em><\/strong><br \/>\n  Decision relied not  considered; order of the Tribunal is remanded.<\/p>\n<p><strong><em>HDFC Bank Ltd. v. DCIT (2016) 383 ITR 529(Bom.)(HC).<\/em><\/strong><br \/>\n  Where Appellate Tribunal  refused to follow a binding decision in assessee&rsquo;s own case for the earlier  years, the Hon&rsquo;ble Bombay High Court exercised its powers under Article 227 of  the Constitution of India as the Tribunal has  chosen to disregard and\/ or circumvent the binding decision of this Court. <\/p>\n<p>Brief  summary of lecture by the Speaker Mr.  Manish J.Shah, Advocate, Ahmadabad.<\/p>\n<p>The Speaker  interesting traced the origins of the concept of principles of natural justice  in common law, according to him it has travelled from the banks of the river  Thames to the banks of the Ganges.<\/p>\n<p>He  explained the two facets of the principles of Natural justice i.e. <em>Nemo judex in causa sua<\/em>&nbsp;(No man can  judge his own case) and <em>Audi alteram partem<\/em> (No person should be judged  without a fair hearing)<\/p>\n<p>Speaking  on the first principle he cited the example of a situation where the bench  consisted of 9 judges of the Supreme Court of USA, the Ladyship recused herself  from the matter as her husband was a shareholder of the company which was  appearing before the bench to avoid any unconscious bias.<\/p>\n<p>With  the second principle, the speaker gathered inspiration from the Greek  mythology. Prometheus stole fire from Olympus and brought it to earth. Zeus had  convicted him for his act of theft. &ldquo;Truth and Justice&rdquo; visited Zeus and dethroned  him for a day on account of convicting Prometheus without giving him an  opportunity to be heard.&nbsp; <\/p>\n<p>The  Speaker then pointed out that technical and jurisdictional considerations are  sometimes not appreciated by tax officials and it is only the judiciary that  upholds the same.<\/p>\n<p>Further,  he stated that principles of Natural Justice need not be provided by the  statute, rather it must be read into its provisions. Some of the important case  laws are as under:<\/p>\n<p><strong><em>Peerless General Finance &amp;  Investment Co. Ltd. v DCIT[1999]&nbsp;236&nbsp;ITR&nbsp;671&nbsp;(Cal) (HC) <\/em><\/strong><\/p>\n<p><strong>Sahara India (Firm) v. CIT [2008]  300 ITR 403 (SC)<\/strong> <\/p>\n<p><strong>Maneka  Gandhi (Smt.) &nbsp;<\/strong><strong>v.&nbsp;UOI AIR 1978 SC 597<\/strong><\/p>\n<p>The Speaker then  analyzed serval decisions, which are as under:<\/p>\n<p><strong>Rajesh Kumar v. DCIT [2006]  287 ITR 91 (SC)<\/strong><br \/>\n  Where for auditing books of  account of assessee, Deputy Commissioner passed order under section 142(2A)  without giving an opportunity of hearing to assessee and refusing assessee&#8217;s  request for supply of reasons therefor, action of Deputy Commissioner was vitiated  in law.<\/p>\n<p><strong>CIT  v. ED Benny [2016] 283 CTR 212 (Ker)(HC) <\/strong><br \/>\n  Even if additional evidence  produced by assessee are in nature of clinching evidence leaving no further  room for any doubt or controversy, Commissioner (Appeals) is under statutory  obligation to put additional material\/evidence taken on record by him to  Assessing Officer, otherwise principles natural justice is violated<\/p>\n<p>Speaking on the concept of  Bias, he cited the case of <strong><em>Kraipak v. UOI 1970 SC 150<\/em><\/strong>. Bias can  be on account of friendship, relationship, pecuniary interest and personal  grievances etc.<\/p>\n<p>Even the likelihood of a bias  is to be avoided. In the case of <strong><em>Tata Motors v. Govt of West Bengal<\/em><\/strong>,  Justice Soumitra Paul recused from the matter on account of a known\/related  party contesting the matter.( Business line dt 12 -3 &#8211; 2018)&nbsp;<\/p>\n<p><strong><em>UOI vVipan Kumar Jain [2003]  260 ITR 1 (SC)<\/em><\/strong><br \/>\n  In absence of any challenge to  provisions of Act relating to jurisdiction of Assessing Officer to carry out  search under section 132, subject to his being appointed as an authorised  officer thereunder, there is no question of imputing or presuming a bias where  action is followed under that section. There is nothing inherently  unconstitutional in permitting Assessing Officer to gather information and to  assess value of information himself. Courts cannot read in limitations to  jurisdiction conferred by statutes, in absence of a challenge to provision  itself, when language of Act clearly allows for an ostensible violation of  principles of natural justice including principle that a person cannot be a  judge in his own cause<\/p>\n<p>The Speaker respectfully  doesn&rsquo;t agree with the above decision.<\/p>\n<p><strong><em>Olga Tellis&amp;Ors vs Bombay  Municipal Corporation &amp;Ors 1986 (SC) 180<\/em><\/strong><br \/>\n  Discretion to act with or without  noticemust be exercisedreasonably,fairly and justly, otherwise it is a  violation of principles of Natura Justice. <\/p>\n<p><strong><em>GKN&nbsp;Driveshafts (India)  Ltd. v. ITO( 2003) &nbsp;259 ITR 19 (SC) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <\/em><\/strong><br \/>\n  When a notice is issued under  section 148, proper course of action for noticee is to file return and if he so  desires, to seek reasons for issuing notice and on receipt thereof to file  objections to issuance of notice. <\/p>\n<p><strong><em>Anand Chauhan v CIT [2015] 273  CTR 296\/ 231 Taxman 76 &nbsp;(Himachal  Pradesh)(HC) <\/em><\/strong><br \/>\n  Where reasons specified in  order transferring assessees cases to other jurisdiction were totally different  from what was spelt out in show cause notices, impugned order was to be quashed  and set aside<\/p>\n<p>With respect to Writ Petitions  the Speaker&rsquo;s comments are as under:<\/p>\n<p>That, while replying to  reasons recorded i.e. Objections to reopening, the Consultant must take every  contention, case law, averment etc as possible.<\/p>\n<p><strong><em>Gujarat Institute of Desert  Ecology v. CIT (2003) &nbsp;260 ITR 595 ( HC ) <\/em><\/strong><br \/>\n  When decision on question  whether delay should be condoned or not entails drastic civil consequences on  assessment of petitioner-trust, principles of natural justice are required to be  read into in provisions of section 119(2)(b) of the Act. since impugned order  was vitiated for non-consideration of relevant criteria for deciding an  application for condoning delay under section 119(2)(b), it should be set aside  and concerned authority directed to decide matter afresh in accordance with law  after giving petitioner an opportunity of personal hearing.<\/p>\n<p><strong><em>LaljibhaiKanjibhaiMandalia v.  PCIT [2019] 416 ITR 365 (Guj)(HC) <\/em><\/strong><br \/>\n  Search warrant is invalid if  provisions of section 132 not attracted; HC quashes search proceedings.<\/p>\n<p><strong><em>Whirlpool Corporation v  Registrar of Trade Marks AIR 1999 SC 22<\/em><\/strong><br \/>\n  Writ Petition can be filed for  the enforcement of any of the Fundamental rights or where there has been a  violation of the principle of natural justice or where the order or proceedings  are wholly without jurisdiction or the vires of an Act is challenged.&nbsp;<\/p>\n<p><strong><em>Calcutta Discount Co. Ltd. v  ITO [1961] 41 ITR 191 (SC)<\/em><\/strong><br \/>\n  If there are some reasonable  grounds for thinking that there had been any non-disclosure as regards any  primary facts, which could have a material bearing on question of  &#8216;under-assessment&#8217;, that would be sufficient to give jurisdiction to ITO to  issue notice under section 34 of 1922 Act.<\/p>\n<p><strong><em>Gujarat State Fertilizers  &amp; Chemicals Ltd. v DCIT [1997] 226 ITR 270 (Guj)( HC) <\/em><\/strong><br \/>\n  In terms of the Board&rsquo;s  Circular No. 530 dated 6-3-1989, where the demand in dispute relates to issues  that have been decided in favour of the assessee in an earlier order by an  appellate authority or a Court in the assessee&rsquo;s own case, the assessee was to  be treated as not being in default in respect of the amounts attributed to such  disputed amounts.<\/p>\n<p><strong><em>Saroj&nbsp;Ceramics&nbsp;Industries  v ITO [2014] 42 taxmann.com 372 (Guj)( HC) <\/em><\/strong><br \/>\n  Once an appeal under section  260A against order passed by Tribunal is dismissed, there cannot be any  rectification application to rectify order passed by Tribunal in appeal<\/p>\n<p>The Chairman remarked that 80  percent of the Writ Petitions before the Hon&rsquo;ble High Courts are arising out of  challenge against reopening and another 10 percent arises out of stay of  demand. Therefore, Consultants have to be very careful in filing submissions at  the early stages of the trial to lay down a proper foundation for availing  benefit of technical considerations before the judiciary.<\/p>\n<p>The Chairman also pointed out  instances where the judiciary has been careful so as to ensure no principles of  natural justice is violated, precautions are taken to ensure that the bench or  its members do not have any pecuniary interest in the assessee-company or the  matter was decided by the member when they were acting as a revenue officer.  The integrity of the judiciary in ensuring Natural Justice is remarkable and deserves  to be praised.<\/p>\n<table width=\"103%\" border=\"1\" cellpadding=\"5\" cellspacing=\"0\" bgcolor=\"#FFFFCC\">\n<tr>\n<td><strong>Disclaimer: <\/strong>The  contents of this document are solely for informational purpose. It does not  constitute professional advice or a formal recommendation. While due care has  been taken in preparing this document, the existence of mistakes and omissions  herein is not ruled out. Neither the author nor itatonline.org and its  affiliates accepts any liabilities for any loss or damage of any kind arising  out of any inaccurate or incomplete information in this document nor for any  actions taken in reliance thereon. No part of this document should be  distributed or copied (except for personal, non-commercial use) without  express written permission of itatonline.org<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>The All India  Federation of Tax Practitioners (AIFTP Western zone) had organized a Webinar on  June 14, 2020 on the subject of &ldquo;Principles of Natural justice as applicable  to Tax proceedings and Writs in taxation&rdquo;. The speaker was Advocate Mr.  Manish J.Shah, Ahmedabad and Chairman was Dr K. Shivaram, Senior Advocate, Mumbai. For the benefit of the readers, a brief summary of the proceedings has been prepared by Advocate Shashi Bekal<\/p>\n<div class=\"read-more\"><a href=\"https:\/\/itatonline.org\/articles_new\/natural-justice-and-writ-petitions-video-transcript-of-webinar\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-8670","post","type-post","status-publish","format-standard","hentry","category-articles"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/posts\/8670","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/comments?post=8670"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/posts\/8670\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/media?parent=8670"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/categories?post=8670"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/tags?post=8670"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}