TMI Blog2024 (2) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... otice u/s 148A (b) would necessarily and mandatorily include a personal hearing. The Income Tax Department, on it s own volition or on a request made by the Assessee, may grant a personal hearing. However, refusal to grant a personal hearing would not mean that the assessee has been deprived of an opportunity of hearing, in the absence of any specific provision or the language in the statute book mandating such a hearing. Enquiry to be conducted before issuance of a notice by the AO u/s 148A(a) - contention of the Petitioner is that the enquiry is mandatory - HELD THAT:- Under clause (b), an opportunity of being heard is to be provided to the Assessee. Clause (c) requires that the reply of the Assessee has to be taken into account and clause (d) requires an order to be passed for forming an opinion that a notice u/s 148 has to be issued, on the basis of the material available on record, which includes the reply of the Assessee. In the absence of any specific judicial pronouncement dealing with the aspect of interpretation on this issue, considering the language of the provision and noticing the law enunciated in the above discussed reports, we are of the view that the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so not in dispute that a notice u/s 148 of the Income Tax Act, 1961 has now been issued to the Petitioners and the proceedings are underway. 3. For brevity, we are reproducing the chronological dates and events as are tendered by the individual Petitioners in their synopsis (verbatim). 4. In WP No.10075/2023, the dates and events read (verbatim) as under :- Sr.No. Date Particulars Exhibit Page No. 1. 31.10.2019 Petitioner filed Income Tax Return for the Assessment Year 2019-20. A 28 to 108 2. 01.03.2023 Respondent No. 4 issued a Notice under clause (b) of Section 148A of the Income Tax Act, 1961. B 109 to 118 3. 13.03.2023 Petitioner's Director requested Respondent No. 4 to allow an additional 8-10 days to file a response to the Notice dated 01.03.2023 vide mail C 119 to 120 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Act, 1961. G 157 to 163 8. 31.03.2023 Respondent No. 4 issued a Notice dated 31.03.2023 under Section 148 of Income Tax Act, 1961. H 164 FIRST ISSUE - PERSONAL HEARING 6. In both these matters, after notices were issued, the Petitioners approached the Authorities for extension of time, keeping in view that the period of 30 days is available u/s 148A(b). It is also conceded that extension of time was granted to these Petitioners, who have submitted their detailed written replies within the extended time. It is undisputed that the last sentence in these replies so filed, indicates a request made by these Petitioners to the Authority for a personal hearing. 7. Section 148A reads as under :- 148A. The Assessing Officer shall, before issuing any notice under section 148,- (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing assessment for any assessment year in the case of the assessee.] Explanation -- For the purposes of this section, specified authority means the Specified authority referred to in section 151.] 8. It is, thus, obvious from the language used in sub-clause (b), that serving of a show cause notice within such time as is specified, is the mandate. A time line of not less than 7 days and not exceeding 30 days, is to be granted to the Assessee to submit a reply. Beyond 30 days, extended time can be granted if an application is made in this behalf. Un-disputedly, the two words personal hearing do not appear in the entire section. 9. The golden rule of interpretation is that one should not read what does not meet the eyes. A meaning as is ordinarily understood on a plain reading, has to be extended to a particular provision. It is now well settled principle of interpretation of statute that plain language engrafted in a Section, must be given it s ordinary meaning. 10. The learned Advocate for the Petitioners has relied upon a consenting order passed by this Court at the Principal Seat dated 22.12.2023 in WP No. 15215/2023 (Babitha Bhaskar Prabhu Vs. Union of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted before passing the order u/s 148A(d), was noted. The Delhi High Court, therefore, considered it to be appropriate to permit a re-hearing in the matter and granted the opportunity to the Assessee to have a personal hearing. In this case as well, the issue was not raised as to whether a personal hearing is to be mandatorily and necessarily granted. 13. We have perused sub-Section (c) below Section 148A, which requires the Department to consider the reply of the Assessee as may be furnished, if any, in response to the show cause notice referred to in clause (b). The learned Advocate for the Income Tax Department is right in contending that sub-clause (b) cannot be read in isolation by ignoring sub-clause (c). According to her, when sub-clause (b) permits a notice to show cause, without using the actual words and a personal hearing , the Department is bound only to consider the reply of the Assessee furnished in response to the show cause notice referred to in Clause (b) on a conjoint reading of sub-clause (c) . 14. The learned Advocate for the Petitioners has placed reliance upon the MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINANCE BILL, 2021 , more particularly, Clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore 31st March 2021) are to be carried out as per the provision of section 153A, 153B, 153Cand 153D of the Act, the aforesaid time limitation shall not apply to such cases. It is also proposed that for the purposes of computing the period of limitation for issue of section 148 notice, the time or extended time allowed to the assessee in providing opportunity of being heard or period during which such proceedings before issuance of notice under section 148 are stayed by an order or injunction of any court, shall be excluded. If after excluding such period, time available to the Assessing Officer for passing order, about fitness of a case for issue of 148 notice, is less than seven days, the remaining time shall be extended to seven days. (ix) The specified authority for approving enquiries, providing opportunity, passing order under section 148A of the Act and for issuance of notice under section 148 of the Act are proposed to be -- (a) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (b) Principal Chief Commissioner or Principal Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. And in most cases-though not in this one one or the other party engages a counsel for his skills to drag the proceedings. There is a premium in prolonging any judicial proceeding; sometimes the procedural panoply- with all its rigours and rigmaroles gives the litigant what he could not have, under the substantive law, bargained for. A case in point is Bharat Petroleum Corporation Ltd., v. Champalal Vithuram Jajoo'. 4. Who else can I quote than the venerable Vivekananda on how we fall into these endless procedural pits and make a virtue of our failure to climb over? He says, [b]ut there is yet time to change our ways. Give up all those old discussions, old fights about things which are meaningless, which are nonsensical in their very nature. grown-up men by hundreds have been discussing for years whether we should drink a glass of water with the right hand or the left, whether the hand should be washed three times or four times, whether we should gargle five or six times. What can you expect from men who pass their lives in discussing such momentous questions as these and writing most learned philosophies on them! For Vivekananda, it is a sure sign of softening of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring. Closer to our case is MP Industries Ltd. Union of India. In that case, the Supreme Court has held that the issue of an oral hearing is a matter of the tribunal's discretion. In that case, Rule 55 mandates that no order shall be passed against any applicant unless he has been given an opportunity to make his representations against the comments, if any, received from the state government or other authority . Then, the court per Subba Rao J (as his Lordship then was) has held that the said opportunity need not necessarily be by personal hearing. It can be by written representation or by personal hearing. It depends on the facts of each case, and ordinarily it is on the discretion of the tribunal . Numerous are the judicial pronouncements on the lines of MP industries. Let us not burden this judgment with any more. 64. Indeed, as the Supreme Court has held time and again, an oral hearing is a facet of fair hearing, but it is not an indispensable part of it. In a proceeding, a court in a tribunal may modulate its procedure-- sometimes allowing oral arguments and some other times requiring the parties to file their written arguments. More particularly, when the statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-clause c indicates that the reply tendered by the Assessee has to be considered before passing an order u/s 148(d), we conclude that it is not the mandate of Law that a show cause notice u/s 148A (b) would necessarily and mandatorily include a personal hearing. The Income Tax Department, on it s own volition or on a request made by the Assessee, may grant a personal hearing. However, refusal to grant a personal hearing would not mean that the assessee has been deprived of an opportunity of hearing, in the absence of any specific provision or the language in the statute book mandating such a hearing. SECOND ISSUE - ENQUIRY 19. The second issue raised by the Petitioners is as regards an enquiry to be conducted before issuance of a notice by the Assessing Officer u/s 148A(a). The contention of the Petitioner is that the enquiry is mandatory. The contention of the Department in the specific facts of this case is, that an enquiry was never conducted and it is not a mandate to conduct an enquiry, more so, in the light of the averments set out in the affidavit in reply filed by the Deputy Commissioner of Income Tax, Circle-I, Aurangabad, dated 30.09.2023. The specific aver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be agitated before the Assessing Officer in the re-assessment proceedings. Under the circumstances, the High Court has rightly dismissed the writ petition. Also Hon'ble Supreme Court Judgment in the case of Raymond Woollen Mills Ltd it has been held that In determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. 20. Having considered the language in sub-clause (a), we find that the Assessing Officer, before issuing any notice u/s 148, shall conduct an enquiry, if required, with the prior approval of the specified authority .. . The words if required actually indicate a discretion under sub-clause (a). The opening words of Section 148A require the Assessing Officer to do a particular thing before issuing notice u/s 148. The acts that are to be performed by the Assessing Officer would include conducting any enquiry, if required. Under clause (b), an opportunity of being heard is to be provided to the Assessee. Clause ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Nos. 23 to 27 as under :- 23. It is the basic principle of construction of statute that the same should be read as a whole, then chapter by chapter, section by section and words by words. Recourse to construction or interpretation of statute is necessary when there is ambiguity, obscurity, or inconsistency therein and not otherwise. An effort must be made to give effect to all parts of statute and unless absolutely necessary, no part thereof shall be rendered surplusage or redundant. 24. True meaning of a provision of law has to be determined on the basis of what provides by its clear language, with due regard to the scheme of law. 25. Scope of the legislation on the intention of the legislature cannot be enlarged when the language of the provision is plain and unambiguous. In other words statutory enactments must ordinarily be construed according to its plain meaning and no words shall be added, altered or modified unless it is plainly necessary to do so to prevent a provision from being unintelligible, absurd, unreasonable, unworkable or totally irreconcilable with the rest of the statute. 26. It is also well settled that a beneficent provision of legislatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 24. The literal rule of interpretation really means that there should be no interpretation. In other words, we should read the statute as it is, without distorting or twisting its language. We may mention here that the literal rule of interpretation is not only followed by Judges and lawyers, but it is also followed by the lay man in his ordinary life. To give an illustration, if a person says this is a CIVIL APPEAL NO. 2684 OF 2007 pencil , then he means that it is a pencil; and it is not that when he says that the object is a pencil, he means that it is a horse, donkey or an elephant. In other words, the literal rule of interpretation simply means that we mean what we say and we say what we mean. If we do not follow the literal rule of interpretation, social life will become impossible, and we will not understand each other. If we say that a certain object is a book, then we mean it is a book. If we say it is a book, but we mean it is a horse, table or an elephant, then we will not be able to communicate with each other. Life will become impossible. Hence, the meaning of the literal rule of interpretation is simply that we mean what we say and we say what we mean. 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m in 1909. According to the Mimansa Principles, the Sruti Principle or literal rule of interpretation will prevail over all other principles, e.g., Linga, Vakya, Prakarana, Sthana, Samakhya etc. CONCLUSION ON THE SECOND ISSUE 27. In the absence of any specific judicial pronouncement dealing with the aspect of interpretation on this issue, considering the language of the provision and noticing the law enunciated in the above discussed reports, we are of the view that the words if required have been set out in 148A(a) so as to leave it to the discretion of the Assessing Officer as to whether he desires to conduct an enquiry. If the Legislature had the intent and object of mandating an enquiry before issuing a show cause notice under clause (b), the Legislature would not have specifically used the words if required , following the words conduct an enquiry . In these circumstances, if a harmonious interpretation is to be arrived at without rendering the words if required meaningless, in our view, the word shall would mean may as Section 148A(a) grants discretion to the Assessing Officer to conduct an enquiry. 28. With the aforesaid conclusions, both these Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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