Law: Income Tax Act, 1961

Section: 254,256,61

(a) Income-tax--Appeal to Appellate Tribunal---Writ---Principles of natural justice---New issue raised by Revenue before Tribunal---Tribunal had to give opportunity to assessee to be heard---Order passed without giving assessee opportunity to be heard---Order was not valid---Indian Income Tax Act, 1961, S.254--­Constitution of India, Art.226. (b) Writ---- Existence of alternate remedy---Not a bar for issue of writ where principles of natural justice have been violated---Tribunal passing order in violation of principles of natural justice---Action of Tribunal could not be challenged in reference proceedings---Writ petition against order was maintainable---Constitution of India, Art.226---Indian Income Tax Act, 1961, S.256. When an adequate alternative statutory remedy is available under the Act, the High Court would not normally interfere in a writ petition. However, when the Court finds that there is a miscarriage of justice and the procedure adopted by the Appellate Tribunal which is the final fact-finding authority, is-erroneous resulting in gross violation of principles of natural justice in the passing of the order which shocks the conscience of the Court, it can and should interfere to meet the ends of justice: Held, that from the orders of the Assessing Officer and, the Commissioner of Income-tax (Appeals) it was clear that the Assessing Officer had proceeded on the basis that the memo. of understanding was a genuine one and that was the reason for the Assessing Officer invoking the provisions of section 61 of the Income Tax Act, 1961, in his orders o assessment made for the assessment year 1990-91 and for the prior assessment years as well. Even assuming that the entire assessment proceedings were before the Appellate Tribunal, and it had jurisdiction to deal with the entire matter of assessment, yet when the matter came up to first hearing on June 17, 1998, and when a new case was projected that the transactions recorded in the memo. of understanding were not genuine transactions, the petitioner should have been given an opportunity to meet the case regarding the bogus nature of the transactions. There was a violation of the principles of natural…

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