Delhi H.C : opportunity of being heard was not given to it before passing order

High Court Of Delhi

Sis Live Vs. ITO

Section : 264,197

Dipak Misra, Cj. And Sanjiv Khanna, J.

W.P.(C) No. 1375 Of 2011 And C.M. Nos. 2960 And 2961 Of 2011

March 3, 2011


1.M. No. 2961 of 2011 (Exemption)

2. Allowed, subject to all just exceptions.

3. P. (C) No. 1375 of 2011 and C. M. No. 2960 of 2011

4. Heard Mr. Rakesh Tiku, learned senior counsel along with Mr. Naveen Goel, learned counsel for the petitioner and Mr. Sanjeev Sabharwal, learned counsel for the respondent.

5.This is the second round of litigation by the writ petitioner to this court. On the first occasion, this court on December 21, 2010 in WP(C) No. 7158 of 2010 had passed the following order :

“Though many an issue was raised in the writ petition, yet Mr.Tiku, learned counsel appearing for the petitioner in course of hearing restricted his argument to the singular issue, namely, that before the order came to be passed, adequate opportunity of hearing was not afforded to the petitioner and had that exercise been carried out, a different order possibly would have been passed. Be it noted, as we are going to decide the said issue alone, the other contentions, which are sought to be raised in the petition, are left open.

On the last occasion, we required Mr. Sanjeev Sabharwal, learned counsel for the Revenue to obtain instructions regard being had to the language employed in paragraph 8 of the order impugned. We must fairly note that Mr. Sanjeev Sabharwal has come with the instructions that he has no objection if the order impugned contained in annexure P-11 is quashed and the competent authority is directed to decide the matter after affording an opportunity of hearing to the petitioner.

Be it noted, the concession given by Mr. Sanjeev Sabharwal does not necessarily mean that in all circumstances when an order is passed under section 197 of the Income-tax Act, 1961, the doctrine of audi alteram partem has to be followed. In any case, when the order is passed on the consent given by learned counsel for the Revenue, the same cannot earn the status of precedent.

In view of the aforesaid, the order dated October 7, 2010 is quashed.

The petitioner shall appear before the competent authority on January 10, 2011 and thereafter the competent authority shall hear the petitioner or his authorized representative and take a decision without being influenced by the previous order, within a period of 30 days therefrom. Till the matter is finalized, no coercive steps shall be taken against the petitioner.

Before we part with the case, we must issue a direction in the fitness of things that Prasar Bharti shall not pay any amount to the petitioner till the aforesaid matter is finalized. If the competent authority fails to adjudicate the matter within the time stipulated hereinabove, liberty is granted to the petitioner to move this court. The writ petition is disposed of, accordingly, without any order as to costs.”

4. After the said order was passed, the Assessing Officer on February 10, 2011 vide annexure P-1 had passed an order under section 197 of the Income-tax Act, 1961 (for brevity, “the Act”).

5. Assailing the aforesaid order, it is submitted by Mr. Rakesh Tiku, learned senior counsel, for the petitioner, that the assumption of jurisdiction under section 197 of the Act by the Income-tax Officer is totally without jurisdiction and, therefore, the same warrants interference of this court in exercise of power under article 226 of the Constitution of India.

6. Mr. Sanjeev Sabharwal, learned counsel appearing for the Revenue, submitted that the petitioner can challenge the said order in a revision under section 264(2) of the Act.

7. In view of the aforesaid, we are not inclined to entertain the writ petition at present. However, we state that if the petitioner would file a revision within a period of two weeks challenging the order passed by the Assessing Officer on all grounds including that the said authority could not have taken recourse qua the Act, the revisional authority, namely, the Commissioner, Income-tax, shall decide the revision adverting to all the issues within a period of three weeks positively. Needless to say, the Commissioner shall be well advised to deal with the issue of jurisdiction as that has been canvassed with vehemence and conviction by the learned senior counsel appearing for the petitioner.

8. Be it noted, the revisional authority shall give appropriate and adequate reasons with regard to the tenability of the proceedings under section 197 of the Act and shall also address other facets so that a composite order from all spectrums is passed. The disposal by the revisional authority shall be apprised to the Registrar General of this court by Mr. Sanjeev Sabharwal by filing a memorandum. The Commissioner, for the purpose of adjudication of revision, shall requisition the records from the Income-tax Officer. It needs no special emphasis to state that if the petitioner wants to file any other documents or if the Commissioner requires the petitioner to file any further documents, the same shall be duly complied with.

9. Accordingly, the writ petition is disposed of without any order as to costs.

[Citation : 333 ITR 13]

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