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2022 (5) TMI 1015 - HC - Income TaxRevision u/s 263 - contention raised by the assessee was that the proceedings are liable to be stayed since the assessee has been admitted for Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) and presently the assessee is under moratorium by orders of the National Company Law Tribunal (NCLT) - HELD THAT:- Firstly, AO after receipt of the reply dated 26th March, 2022 did not hear the assessee on the issue relating to the effect of IBC. The so called hearing by way of exchange of chat messages cannot satisfy the test of fairness or the test embodied in the principles of fair play. That apart AO was so adamant and he even failed to take note of the order passed by the PCIT-II, who had acceded to similar request made on behalf of the assessee for a later assessment year which was pending on the file of the PCIT-II u/s 263 - we are of the considered view that the observations made against Advocate appearing for the appellant/assessee were not required in the facts and circumstances of this case. While on this issue we take note of the decision of the High Court of Judicature of Madras in the case of Director General of Income Tax (INV.) and Others vs. T. S. Kumaraswamy, Proprietor, Christy Friedgram Industry and Others [2019 (5) TMI 194 - MADRAS HIGH COURT]. The said appeal filed by the Income Tax Department was directed against certain adverse remarks made against the officer of the Income Tax Department and their senior standing counsel. The first objection which was raised was by the writ petitioner/assessee that he should be heard in the matter. This was rejected by the following decisions of the Hon’ble Supreme Court as the writ petitioner/assessee was not concerned with the subject in issue and, therefore, no notice was required to be issued to the assessee. The next aspect of the matter is whether the observations/remarks made by the learned Single Judge against the officer of the Department and the senior standing Counsel are required to be expunged or not. The court noted the decision in Manish Dixit v. State of Rajasthan [2000 (10) TMI 970 - SUPREME COURT] wherein the Supreme Court pointed out and cautioned that before any ex parte remark is made by the Court against any person, particularly, when such remarks could eschew serious consequences on the future career of the person, he should be given an opportunity of being heard in the matter in respect of the proposed remarks or strictures otherwise the adverse remark would be in violation of the principals of natural justice. On similar grounds the adverse remarks were quashed in the case of State of Gujarat Vs. K.V. Joseph [2000 (11) TMI 1253 - SUPREME COURT] Testa Setalvad v. State of Gujarat [2004 (4) TMI 640 - SUPREME COURT] and also in Samya Sett v. Shambu Sarkar [2005 (8) TMI 741 - SUPREME COURT] In the result, the appeal is allowed. The assessment order is set aside and the matter is restored to the file of the assessing officer and the matter shall be kept in abeyance till the completion of the insolvency resolution proceedings.
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