Law: Income Tax Act, 1961

Section: 154

Income-tax---Rectification of mistakes---Principles of natural justice ---Assessee not given opportunity to be heard---Direction by C.I.T. to I.T.O. to pass order of rectification---No option given to I.T.O.---Principles of natural justice were violated---Order of C.I.T. was not valid---Indian Income Tax Act, 1961, S.154. The Commissioner of Income-tax passed an order on February 7, 1983, directing the Income-tax Officer to pass a fresh order under section 154 of the Income Tax Act, 1961, rejecting the petition of the assessee claiming development rebate at a higher rate of 25 per cent. On a writ petition: Held, that even though the petitioner had taken precautions to file written submissions, this was not enough to assume that oral hearing was not required to be given. This had definitely prejudiced the case of the petitioner. Moreover, the Commissioner of Income-tax had given a direction to the Income-tax Officer to pass the order of rectification. This left no option to the Income-tax Officer. This would also vitiate the principles of natural justice. The order of the Commissioner of Income-tax was not valid and was liable to be quashed. . Ram Chander v. Union of India AIR 1986 SC 1173 and Union of India v. Tulsiram Patel AIR 1985 SC 1416 ref. JUDGMENT The Commissioner of Income-tax, Bhopal, while passing the order on February 7, 1983, made the following observations: "The Income-tax Officer is directed to pass a fresh order under section 154 of the Income Tax Act, 1961, rejecting the petition of the assessee claiming development rebate at the higher rate of 25 per cent. The Income-tax Officer must reject the petition of the assessee by a separate order to be passed under section 154. " On the basis of the aforementioned direction, learned counsel for the petitioner contends that the Commissioner of Income-tax, Bhopal, gave a positive direction to the Income-tax Officer to pass an order in a particular manner. No discretion has been left with the Income-tax Officer. According to him, he has merely to sign on the dotted line. According to him, this is in utter violation of the principles of natural justice and is not in line with the procedure adopted by…

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