Navin Construction & Credit Pvt. Ltd vs Union Of India & Anr.

An Order dated December 12, 2018 passed under Section 143(3) of the Income Tax Act, 1961 is under challenge in the present writ petition.

Learned Advocate appearing for the petitioner submits that, notwithstanding the impugned order being appealable, the petitioner has chosen to file the writ petition on the ground that, the impugned order was passed in breach of the principles of natural justice. He points out three instances where the principles of natural justice were violated. He draws the attention of the Court to the notice dated October 17, 2018 by which, the authorities invoked the provisions of Section 142(1) of the Act of 1961. He submits that, such notice did not fix any date of hearing of the proceeding. He draws the attention of the Court to the impugned order and submits that, the impugned order at paragraph 2 records that, by a notice dated October 17, 2018, a questionnaire was given to the petitioner with a date of hearing being fixed on October 29, 2018. No such date of hearing was fixed by the notice dated October 17, 2018. No hearing was given to the petitioner on October 29, 2018. Apart from the notice dated October 17, 2018, the authorities did not inform the petitioner as to a date of hearing being fixed on October 29, 2018. Consequently, the petitioner was not heard. The impugned order suffers from the vice of breach of the principles of natural justice.

On the second aspect of violation of the breach of the principles of natural justice in the impugned proceedings, learned Advocate appearing for the petitioner submits that, the petitioner complied with the questionnaire raised in the notice dated October 17, 2018. At no point of time, the authorities wanted the petitioner to produce any ledger. The petitioner has in its possession relevant ledgers which could be produced, if asked for. However, the impugned order proceeds on the basis that, there was failure on the part of the petitioner to produce the ledger called for. Since no ledger was called for, and no hearing was given, the impugned order again stands vitiated by the breach of the principles of natural justice.

On the third aspect of breach of the principles of natural justice, learned Advocate for the petitioner submits that, the petitioner by a letter dated December 7, 2018 stated that, the petitioner is not in possession of certain documents which are available with the companies noted in such letter, the petitioner requested the authorities to invoke provisions of Section 133(6)/131 of the Income Tax Act, 1961. The authorities did not do so. Consequently, the impugned order stands vitiated by the breach of the principles of natural justice.

Learned Advocate for the respondent submits that, although, the proceeding was required to be had in an electronic format, the petitioner proceeded to file hard copies of the documents. He draws the attention of the Court to the various annexures to the writ petition and submits that, on October 29, 2018 itself the representative of the petitioner was present before the authorities to submit documents. Therefore, a hearing was granted to the petitioner on October 29, 2018 itself. There is no infirmity in the impugned order. On the two other grounds of breach of the principles of natural justice, he submits that, those grounds ought to have been raised by way of an appeal, if the petitioner chosen to do so. This Court exercising jurisdiction under Article 226 of the Constitution of India, need not look into such aspect.

Having heard the rival contentions of the parties, it appears from the records made available that, a notice under Section 142(1) of the Income Tax Act, 1961 was issued to the petitioner on October 17, 2018 for the assessment year 2016-2017. The notice dated October 17, 2018 required the petitioner to comply with the requisitions made therein. The petitioner responded thereto. Provisions of Section 142(3) of the Act of 1961 requires an opportunity of being heard to be afforded to an assessee before an order is made, excepting an assessment under Section 144. The impugned order is under Section 143(3) of the Act of 1961. The impugned order is, therefore, not under Section 144 of the Act of 1961. The authorities, therefore, were statutorily obliged to afford the petitioner an opportunity of hearing.

The dispute in the present writ petition is whether, the petitioner was heard on October 29, 2018 as recorded in the impugned order or not. The petitioner claims that, it was not heard while the impugned order records that, a hearing was given.

The notice dated October 17, 2018 did not fix any date of hearing on October 29, 2018 or otherwise. However, it appears from the records made available to the Court that, the authorized representative of the petitioner was present before the authorities on October 29, 2018. Such presence appears from the annexures to the writ petition. The petitioner submitted its documents on such date.

In such circumstances, it would not be proper to return a finding that, the petitioner was not heard on October 29, 2018.

So far as the other two grounds of breach of the principles of natural justice are concerned, in my view, they do not fall within the purview of the breach of the principles of natural justice. The petitioner was given adequate notice by the letter dated October 17, 2018 as to the materials that were required for the petitioner. The petitioner was afforded reasonable time to react to such notice. In fact, the petitioner reacted to such notice in writing. Therefore, I am not in a position to come to a finding that, the petitioner was not heard prior to the passing of the impugned order.

The petitioner having a statutory right of appeal, and choosing not to file of the same, is confined to the parameters within which, a Writ Court can intervene with the order in original where there exists a statutory alternative remedy.

In the facts of the present case, the petitioner does not satisfy any of the grounds which permits a Writ Court to set aside an order in original against which a statutory appeal lies.

W.P. No. 653 of 2018 is dismissed. No order as to costs.