Kerala HC Cancels I-T Assessment Order Due to Failure to Comply with Natural Justice Principle

The Kerala High Court nullified the Income Tax Assessment order, citing a failure to adhere to the principle of natural justice. In response, the court instructed V G Suresh, the petitioner, to present themselves before the 2nd respondent within the specified time frame to provide submissions.

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

The petitioner’s legal representative argued that the petition was solely based on the grounds of natural justice violation. This assertion stemmed from the petitioner receiving hearing notices from the Appellate Authority for October 10, 2023, and October 19, 2023. In response, the petitioner submitted a reply and sought an adjournment.

Nevertheless, the petitioner’s plea for consideration was overlooked, leading to the issuance of ex parte appellate orders. It was argued that the petitioner would participate in the scheduled hearing before the Appellate Authority without seeking any adjournment.

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Acknowledging this assurance, Justice Dinesh Kumar Singh noted a potential infringement of the principle of natural justice. Consequently, the current writ petitions are granted, annulling the contested Appellate orders, and the cases are remitted back to the 2nd respondent for a fresh decision.

The petitioner is instructed to appear before the 2nd respondent and present their case on January 18, 2024. Additionally, the petitioner is required to deposit 10% of the total assessed tax for all five assessment orders. If the petitioner fulfils this deposit requirement, the remaining demand under the assessment orders will be suspended until the resolution of the appeals under consideration by the 2nd respondent.

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The court explicitly stated that if the petitioner fails to deposit the stipulated 10% of the assessed tax for the five assessment orders or neglects to appear before the 2nd respondent on January 18, 2024, no further opportunities will be extended, and the demands outlined in the assessment orders will remain in effect for tax realization.