A Demand Notice Was Also Issued Pursuant v. K.t.shaduli Yusuff[1977 (39) St

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN TUESDAY, THE 3RD DAY OF JUNE 2014/13TH JYAISHTA, 1936 WP(C).No. 12094 of 2014 (J) ---------------------------- PETITIONER : ------------------ M/S.YENKEYT ROLLER FLOUR MILLS, REGD. OFFICE, 6/1183, CHEROOTTY ROAD, CALICUT-673032 REPRESENTED BY ITS PARTNER N.K.KHALID. BY ADV. SRI.C.P.MOHAMMED NIAS RESPONDENT :-------------------- ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2(1), INCOME TAX DEPARTMENT AAYAKAR BHAVAN (NORTH BLOCK), MANANCHIRA, KOZHIKODE-673001. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03-06-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: BP WP(C).No. 12094 of 2014 (J) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- P1: TRUE COPY OF THE NOTICE DATED 23.3.2013 ISSUED BY THE RESPONDENT. P2: TRUE COPY OF THE REQUEST DATED 4.5.2013 SUBMITTED BY THE PETITIONER. PETITIONER. P3: TRUE COPY OF THE LETTER DATED 13.5.2013 ISSUED BY THE RESPONDENT. P4: TRUE COPY OF THE OBJECTION FILED BY THE PETITIONER ON 27.11.2013. P5: TRUE COPY OF THE LETTER DATED 9.12.2013 SENT BY THE RESPONDENT. P6: TRUE COPY OF THE PRE-ASSESSMENT NOTICE DATED 17.2.2014 ISSUED BY THE RESPONDENT TO THE PETITIONER.THE RESPONDENT TO THE PETITIONER. P7: TRUE COPY OF THE OBJECTIONS VIDE A LETTER DATED 21.2.2014 SUBMITTED BY THE PETITIONER.SUBMITTED BY THE PETITIONER. P8: TRUE COPY OF THE PETITION DATED 25.2.2014 FILED BY THE PETITIONER BEFORE THE JOINT COMMISSIONER OF INCOME TAX.BEFORE THE JOINT COMMISSIONER OF INCOME TAX. P9: TRUE COPY OF THE LETTER DATED 28.02.2014 SENT BY THE PETITIONER TO THE RESPONDENT.THE RESPONDENT. P10: TRUE COPY OF THE LETTER DATED 13.3.2014 ALONG WITH THE ACCOMPANYING SUBMISSION OF PARISONS ROLLER FLOUR MILLS PVT. LTD.ACCOMPANYING SUBMISSION OF PARISONS ROLLER FLOUR MILLS PVT. LTD. P11: TRUE COPY OF THE ORDER DATED 14.3.2014 OF THE JOINT COMMISSIONER OF INCOME TAX, RANGE 2, CALICUT.OF INCOME TAX, RANGE 2, CALICUT. P12: TRUE COPY OF THE LETTER DATED 25.3.2014 SENT BY THE RESPONDENT. P13: TRUE COPY OF THE ASSESSMENT ORDER DATED 31.3.2014 PASSED BY THE RESPONDENT.RESPONDENT. P14: TRUE COPY OF THE DEMAND NOTICE DATED 31.3.2014. RESPONDENT(S)' EXHIBITS --------------------------------------- : //TRUE COPY// BP P.A. TO JUDGE K.VINOD CHANDRAN, J - - - - - - - - - - - - - - - - - - - - W.P.(C).No. 12094 of 2014 - - - - - - - - - - - - - - - - Dated 3[rd] June, 2014 - - - - - - - - - - - - - - - - - - - - - - - - JUDGMENT The sole question which this Court iscalled upon to decide is as to the denial of anadequate opportunity to the petitioner, anassessee; insofar as not having been providedwith a fair chance, to cross examine the thirdparty witness, whose statements are sought to berelied on in re-opening an assessment. 2. The brief facts necessary for thedisposal of the writ petition, are that thepetitioner had asked for summoning a thirdparty, whose statement was sought to be reliedon by the Assessing Officer, in the proposal tore-open assessment and to make additions to thepetitioner's income for the assessment year2006-07. The third party was summoned and waspresent before the respondent on 24.03.2014. - - - - - - - - - - - - - - - - - - - - - - - - JUDGMENT The sole question which this Court iscalled upon to decide is as to the denial of anadequate opportunity to the petitioner, anassessee; insofar as not having been providedwith a fair chance, to cross examine the thirdparty witness, whose statements are sought to berelied on in re-opening an assessment. 2. The brief facts necessary for thedisposal of the writ petition, are that thepetitioner had asked for summoning a thirdparty, whose statement was sought to be reliedon by the Assessing Officer, in the proposal tore-open assessment and to make additions to thepetitioner's income for the assessment year2006-07. The third party was summoned and waspresent before the respondent on 24.03.2014. 3. The authorized representative was notable to appear on the said date. Hence, thepetitioner, along with another Advocateapproached the respondent and requested forcross-examinationbytheAdvocatewhoaccompanied the Petitioner. However, strangelyenough, the Officer took the view that only therepresentative already authorized by thepetitioner could conduct the cross examination.Hence, the petitioner, Managing Director who waspresent along with the Advocate, was asked tocross examine the witness. On the ManagingDirector expressing his inability and incapacityto do the same, the Officer went ahead andclosed the evidence, as also passed an orderdated 31.03.2013 as evidenced by Ext.P13proceedings. 4. A demand notice was also issued pursuant to Ext.P3 order being passed. The assessee'scontention that he was not afforded a fairopportunity in the proceeding before therespondent, is to be upheld on the short factsstated above. The right to a fair hearing, thoughheld to be a flexible rule, is definitely aninviolable rule. The notice provided underSection 148 before making an assessment,reassessment or re-computation under Section 147is not an empty formality. It postulates a fairhearing before the re-opening is done. The rightto cross-examine a witness, whose statements aresought to be relied on by the assessing Officer,in the re-opening has also been held to be apart of the inviolable rule of 'audi alterampartem' by the Honourable Supreme Court as earlyas in State of Kerala v. K.T.Shaduli Yusuff[1977 (39) STC 478). The right to berepresented by a legally trained person, anAdvocate, is inbuilt; unless the statute specifically prohibits the same; as isprohibited under Section 36 of the IndustrialDisputes Act, 1947. The right to engage a legalpractitioner, and one of his/her choice is theoption, nay, right of the litigant/client. Thefiling of an authorization does not prohibit theengagement of another Advocate; which may be forvery many reasons. That is a matter between thelitigant and the respective counsel and need notfor a moment detain the authority; frompermitting the litigant to avail of expert legalservices,providedthereisavalidauthorisation. 5. Ext.P13 order passed by the respondentAssessing Officer is hence, set aside on theshort but all encompassing vibrant ground ofviolation of the principles of natural justiceenshrined in the rule of 'audi alteram partem”.Needless to say, this Court has not looked into the merits of the order. Proceedings shallcommence from the stage at which it has beendeclared to be bad by this Court. The thirdparty shall be summoned and the petitioner givenadequate opportunity to cross examine the saidwitness. Same shall be done within a period oftwo months from the date of receipt of a copy ofthis judgment. Final orders shall be passed onlyafter such opportunity for cross-examination hasbeen afforded, effectively and not at the willand caprice of the authority, but regulated bythe binding precedents and well establishedprinciples, which it would be demeaning for theauthority to be tutored upon. the merits of the order. Proceedings shallcommence from the stage at which it has beendeclared to be bad by this Court. The thirdparty shall be summoned and the petitioner givenadequate opportunity to cross examine the saidwitness. Same shall be done within a period oftwo months from the date of receipt of a copy ofthis judgment. Final orders shall be passed onlyafter such opportunity for cross-examination hasbeen afforded, effectively and not at the willand caprice of the authority, but regulated bythe binding precedents and well establishedprinciples, which it would be demeaning for theauthority to be tutored upon. Writ petition allowed leaving the parties tosuffer their respective costs. Sd/- K.VINOD CHANDRAN, Judge Mrcs