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Kerala High Court Quashes Income Tax Assessment Order Citing Natural Justice Violation

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The Orders were annulled by Court and Cases were Remitted Back to 2nd Respondent for a Fresh Decision

In a recent legal development, the Kerala High Court, in the case of V G Suresh vs CIT [W.P(C)No.41507/203], has nullified an Income Tax Assessment order dated January 12, 2024, on the grounds of a failure to comply with the principle of natural justice. The court, in response, has directed the petitioner, V G Suresh, to appear before the 2nd respondent within the specified time frame to provide submissions.

V G Suresh had contested decisions made by the Commissioner of Income Tax (Appeals), identified as the 2nd respondent, pertaining to assessment orders for the years 2011-12 to 2015-16.

The primary argument presented by the petitioner’s legal representative focused on the violation of natural justice. The petitioner had received hearing notices from the Appellate Authority for October 10, 2023, and October 19, 2023. Despite submitting a reply and seeking an adjournment, the petitioner’s plea was overlooked, leading to the issuance of ex-parte appellate order. The petitioner had assured participation in the scheduled hearing before the Appellate Authority without seeking any adjournment.

Justice Dinesh Kumar Singh acknowledged the potential infringement of the principle of natural justice, leading to the granting of the current writ petitions. As a result, the contested Appellate orders were annulled, and the cases were remitted back to the 2nd respondent for a fresh decision.

The court instructed the petitioner to appear before the 2nd respondent and present their case on January 18, 2024. Additionally, the petitioner was required to deposit 10% of the total assessed tax for all five assessment orders. Fulfilment of this deposit requirement would lead to the suspension of the remaining demand under the assessment orders until the resolution of the appeals considered by the 2nd respondent.

It is crucial to note that the court explicitly stated that failure to deposit the stipulated 10% of the assessed tax for the five assessment orders or neglecting to appear before the 2nd respondent on January 18, 2024, would result in no further opportunities being extended. In such a scenario, the demands outlined in the assessment orders would remain in effect for tax realization.

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