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Income Tax Department Should Allow Personal Hearings Through the National Faceless Assessment Centre on the Assessee’s Request: Delhi High Court

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Income Tax Department Should Allow Personal Hearings Through the National Faceless Assessment Centre on the Assessee’s Request: Delhi High Court

‘Case title: Global Vectra Helicorp Limited vs Assessment Unit, National Faceless Assessment
Case no.: W.P.(C) NO. 5912 OF 2024
Dated on: 26th April 2024
Quorum: Justice Hon’ble Mr. Justice Vibhu Bakhru and Justice Hon’ble Ms. Justice Tara Vitasta Ganju.

FACTS OF THE CASE
The petitioner has flied the present petition impugning the assessment order dated 27.03.2024 (hereinafter the impugned assessment order) passed under section 143(3) read with section 144B of the Income Tax Act, 1961(hereinafter the Act). Additionally, the petitioner also impugns the demand raised under section 156 of the Act pursuant to the impugned assessment order in respect of assessment year 2022-23 (hereinafter the impugned Assessment year). Mr. Kapoor, learned counsel appearing for the petitioner has confined the challenges in the present petition solely on the ground that the petitioner had not been provided sufficient opportunity to be heard.
The petitioner was issued a show cause notice dated 05.03.2024 (hereinafter the SCN), inter alia, proposing certain additions to the income returned and calling upon the petitioner to respond to the same. The SCN spans over 10 pages and raises various grounds. The fact that such an attempt has been made on 11.03.2024 indicates that the petitioner was aware of the procedure and despite the same, no request was made by the petitioner through the online mode.

CONTENTIONS OF THE APPELLANT
Mr. Kapoor submits that despite the wide nature of allegations and issued raised in the SCN, the petitioner was called upon to submit a response by 17:24 hours on 09.03.2024. He states that the time provided was extremely short considering that there were two holidays after 05.03.2024. He also referred to the standard operating procedure (hereinafter SOP) dated 03.08.2022 framed by the national faceless assessment centre, Delhi which requires that at least 7DAYS Time be provided to the assessee for responding to the show cause notice. He submits that notwithstanding the limited time available for filing the response, the petitioner did submit a response within stipulated time. The petitioner protested against the limited time provided to respond to the SCN and submitted that if the assessing officer require any further information, the petitioner be provided additional time to furnish the same. Further submits that an attempt to upload such a request online was made on 11.03.2024 but the online portal did not accept the same. He submits once a request for personal hearing is made, it is obligatory on the part of Assessing officer to provide the same.

CONTENTIONS OF THE RESPONDENTS
Mr. Sinha, learned counsel submits that the controverts the contentions advanced by Mr. Kapoor on behalf of the petitioner. He submits that since the request for a personal hearing was required to be made online. He further submits that if the said request is not made in the manner as provided, the assessing officer cannot be faulted with for not acceding to such request. However, he is unable to substantiate the said contention with reference to any provision of the act and the rules and regulations made therein.

LEGAL PROVISIONS
Section 144B(6)(viii) of the Income tax act 1961: where a request for personal hearing received, the income tax authority of the relevant unit shall allow hearing through the National Faceless Assessment Centre.
Section 143(3) of Income Tax act 1961: the scrutiny assessment thoroughly reviews your Income tax return.

COURT’S ANALYSIS AND JUDGEMENT
The decision further delved into the provisions of Section 144B(6)(vii) and 144B(6)(viii) of the Income Tax Act, 1961, which outline the procedure for granting a personal hearing in tax assessments. The court elucidated that upon receipt of a request for a personal hearing, the relevant authority must allow for such a hearing through the National Faceless Assessment Centre, to be conducted exclusively via video conferencing or video telephony .In light of the petitioner’s submission and the statutory provisions cited, the Delhi High Court set aside the impugned assessment order and remanded the matter to the Assessing Officer for reconsideration, with a directive to provide the petitioner with a reasonable opportunity to be heard through video conferencing, as mandated by law. In the present case, the act expressly provided for the concerned unit to afford the assessee an opportunity of hearing. The petitioner contention that the impugned assessment order falls foul of the principles of natural justice and the statutory requirement of affording the assessee an opportunity of being heard. The petition is disposed of in the aforesaid terms. All pending applications are also disposed of.

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Judgement Reviewed by – HARIRAGHAVA JP

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The Delhi High Court ruled that a Retired Public Officer cannot occupy the position of Inquiry Officer under the Export Inspection Agency Employees Rules, 1978

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Case title: Parveen Kumar Vs Export Inspection Council & Ors.

Case no.: W.P. (C) 3940/2017 & CM APPL.14022/2021

Decision on: March 6th, 2024

Quoram: Justice Tushar Rao Gedela

Facts of the case

The Petitioner, Parveen Kumar was working as a Technical Officer in Export Inspection Agency under the respondent office. The Petitioner, in the course of his employment exposed a recruitment scam in his department in which sixteen Assistant Director was recruited fraudulently. In 2013, the Petitioner was directed to proceed to sub-office (SO), Kanpur to hold charge but he requested to not depute him on tour to SO Kanpur. The same was rejected by the respondents and the Petitioner stood relieved from EIA Delhi Head Office. Further, he filed the tour programme which was approved by the respondent.

In 2014, the Respondent again directed the Petitioner to be deputed on tour to SO, Kanpur till further orders. He immediately filed a tour programme but the same was rejected for not having a termination date of tour. The respondents repeatedly intimated the petitioner to rectify the improper tour programme but the petitioner was unable to do it and requested the respondents to co-operate and help him in the same.  However, the respondents issued a charge memorandum against the Petitioner alleging disobedience of the order.

A disciplinary enquiry was initiated against the Petitioner in which he made a representation against the illegal appointment of an ineligible person, being a retired public servant, as Inquiry Officer in contravention of Rule 11 of the EIA Rules. But, the representation was rejected by the Respondent. The Disciplinary Authority passed an order of penalty of reduction in rank from Technical Officer to Lower Post of Junior Scientific Assistant against the petitioner. Consequently, the Petitioner preferred a statutory appeal which was dismissed by the Appellate Authority. Aggrieved by the same, the Petitioner filed the present Writ Petition, challenging the impugned orders of the Disciplinary Authority and the Appellate Authority.

Contentions of the Petitioner

Praveen Kumar appearing in person challenged the Disciplinary Authority (DA) primarily on two grounds which violated the Principles of Natural Justice and Rules and Regulations of the Export Inspection Agency (EIA). He submitted that the appointment of the Inquiry Officer was invalid as it violated Rule 11 (2) of the respondent (EIA Rules). Rule 11(2) prescribes the Inquiry Officer to be a “Public Servant” but submitted that the Inquiry Officer in the present case was a retired employee and was not in active duty. As such, retired employees cannot be called a Public Servant. Further, the petitioner contended that he was not granted any opportunity of hearing by the Disciplinary Authority before passing the impugned order, because according to Rule 11 (4) of the EIA Rules, after the written Statement of Defence is submitted, if the Charged Officer seeks hearing, the Disciplinary Authority must grant such hearing before passing the final order. However, he was not granted any Personal Hearing in spite of his requisition, which according to the petitioner not only violated the statutory rules but also the well settled Principles of Natural Justice.

Contentions of the Respondents

The Counsel, on the contrary submitted that even the retired officer can be construed as a public servant and as such, the Inquiry Officer was appointed is in accordance with the EIA Rules. The Inquiry Officer was paid remuneration for the purposes of conducting inquiry against the Petitioner who is a public servant and the disciplinary proceedings itself would fall within the public duty of the Respondent. Further, with respect to the violation of Rule 11(4) the Counsel submitted that there was no defence raised by the Petitioner in the defence statement except making allegations except against the officers and authorities. He opined that if personal hearing was granted, the Petitioner would have simply continued the tirade of baseless allegations and thus, the denial of the same cannot be termed as a violation of the said rule.

Court’s Analysis and Judgement

The Court considering the arguments of the parties notes that the issue in present petition revolves around the interpretation of the provisions of Rule 11(2) and Rule 11 (4) of the EIA Rules, 1978.

The Bench, on perusal of Rule 11(2) of the EIA Rules, asserted two key aspects. According to the rule, firstly, the Disciplinary Authority may itself inquire into the truth of any imputation of misconduct against agency employee; and secondly, that it may appoint under that sub rule ‘a public servant’ to inquire into such truth thereof. The court adopting a plain and simple reading of the provision emphasized that the term such person / Inquiry Officer must be a servant of the public and not a person who ‘was’ a servant of the public and thereby rejected the argument of the respondent. The Inquiry Officer, who was a retired officer of the respondent, did not fulfil the criteria of a ‘public servant’ and held such appointment to be violative of Rule 11 (2) of the EIA Rules. Thus, it ruled that a public servant occupying the position of Inquiry Officer cannot be a retired person.

The Court further adjudicated on the issue of violation of the Rule 11(4) of the EIA Rules wherein the Charged Officer was permitted to seek personal hearing before the DA. The said Rule prescribed the e procedure as to how the DA would proceed after the conclusion of the Inquiry Officer’s report. The Court referring to the rule asserted that the DA was mandated to afford the Charged Officer (CO) an opportunity to tender a written Statement of Defence against the Articles of Charge and the proposed penalty. Moreover, even in accordance with the principles of natural justice the DA ought to afford an opportunity of personal hearing to the CO, if he desires. It highlighted that the opportunity of personal hearing is not a mere formality. It is intrinsic and intertwined not only with the disciplinary proceedings but also with the principles of natural justice. But however, in the instant case it was observed that even on the receipt of requisition no such an opportunity was afforded to the petitioner by the respondent, thus violating Rule 11 (4) of the EIA Rules, 1978.

The Delhi High Court in view of the above violations remitted the matter back to the Disciplinary Authority for adjudication.

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Judgement Reviewed by – Keerthi K

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Granting of Permanent Commission (PC) to the Short Service Commissioned Officers (SSCO’s) in the Indian Navy must be executed without any prejudices: Supreme Court

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The issue in this case was regarding the grant of Permanent Commission (PC) to Short Service Commission Officers (SSCO’s) in the Indian Navy. The conflict arose when the Policy Letters dated 26 September 2008 was issued, which stipulated that only women from certain branches (JAG, Education and Naval Architecture), would be considered for grant of PC with a prospective application.

The case of Cdr. Seema Chaudhary versus Union of India and Others evolved as an aftermath of the Union of India vs Lieutenant Commander Annie Nagaraja case. In the case of Annie Nagaraja, the Lieutenant Commander Annie Nagaraja along with other officers challenged the above Policy Letter as being discriminatory and based on unreasonable grounds. The Court noted that the statutory bar on the enrolment of women in the Indian Navy was lifted by the notifications issued in the year 1991 and 1998. Moreover, this Court held that the policy decision of the Union Government dated 25 February 1999 would govern the conditions of service of SSCOs including women officers in regard to the grant of PCs. The Court held that the impugned PL being prospective and restricting it to specified cadres was invalid. Consequently, directed that all SSCOs in the Education, Law and Logistic Cadres who were “presently in service”, shall be considered for the grant of PC.

In the instant case, the petitioner Cdr. Seema Chaudhary is a JAG Branch officer recruited on Short Service Commission in 2007. Even after many years of service, she was denied PC due to lack of vacancies. The petitioner approached the Armed Forces Tribunal (AFT), which issued directions, considering the petitioner along with the Law Cadre officers from previous batches.

The petitioner aggrieved by the directions issued by AFT,  filed a civil appeal before the Supreme Court. The petitioner contended that considering her candidature alongside the officers of previous batches was prejudice to her appointment.

The respondents contended that such a consideration with subsequent batches was made in order to ensure that a fair opportunity was granted to all concerned officers and to widen the field of consideration.

The Supreme Court hearing the contentions of both the parties analyzed the directions issued by AFT. The court noted that by considering the candidature of the petitioner for the grant of PC along with the batches of 2011 and 2014, the AFT has deviated from the judgement passed by this court. Further, stated that to do so would amount to introducing a condition to the Lieutenant Commander Annie Nagaraja case. The court held that any directions which de-hors the judgment of the Court could not be issued.

The Court also clarified that the increase in the vacancies which is created to accommodate the petitioner shall not create any precedence for the future. The court, thus, exercised its powers under Article 142 to ensure principles of Natural Justice and Equality.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Judgement reviewed by – Keerthi K

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