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The Calcutta High Court in the case of City Express Super Market v. CIT (118TAX248) held that in disposing of an application filed by an assessee u/s 264 the Commissioner is required to examine the legality and validity of the order of the assessing officer passed exparte in a case of non-appearance. In this case the assessee defended non-appearance due to illness, as well as by reason of the delinquent act and activities of its employees. In this case an appeal was filed but later withdrawn and got substituted by a revision petition.

In further expanding the scope of the power vested in them the High Court held that it is for the revisional authority or for that matter, the appellate authority to examine the legality and validity of the order, who take care of all these things under the law.

Also the Gujarat High Court in the case of Pravin V. Ashar Vs. Jaidev, Commissioner of Income-tax (247ITR828) held, that in determining and deciding the revision under section 264 of the Act the Commissioner must afford an opportunity of hearing and also had to consider the merits of the assessee’s claim as per the revision application. The Court further held that in the absence of the same the matter would go to the root of the without giving assessee opportunity to be heard.

Further before the Allahabad High Court in the case of Sardar Bhagat Singh Pahal Vs. Commissioner of Income-tax (70ITR342) the contention of the petitioner was that despite his repeated requests for a personal hearing, he was given no opportunity for presenting his submissions orally and, therefore, the impugned orders are vitiated. The Court held that the contention is without substance. In explaining the manner of exercise of the power by the Commissioner the Court held that section 264 of the Income-tax Act, 1961, empowers the Commissioner to revise an order of an authority subordinate to him either of his own motion or on an application by the assessee for revision. The provision does not confer any right upon the assessee to a personal hearing and there is nothing in it to suggest that an assessee applying in revision is entitled to present his submissions orally before the Commissioner. Merely because the proceeding before the Commissioner in revision is a quasi-judicial proceeding, it does not imply that the party applying in revision has a right to be heard personally. In other words even disposal can be made on the basis of written submissions filed by the assessee.

This view has been dissented by the Madras High Court in the case of Industrial Rubber Products v. Commissioner of Income-tax (194ITR141). The Court held that the power of revision exercised by the Commissioner of Income-tax is a quasi-judicial one. A public duty is imposed on the revisional authority not only to entertain such application but also to deal with the same in accordance with law after giving the aggrieved party a reasonable opportunity of being heard, as the discretion vested in him is a judicial discretion and has to be exercised judiciously. The person concerned must be informed of the case against him and the evidence in support thereof and must be given a fair opportunity to meet the case before an adverse decision is taken.

Further the Orissa High Court in the case of Dulal Chand Pramanick Vs. Commissioner of Income-tax (84ITR720) held that a written submission cannot be substituted for oral argument before the Income-tax Commissioner when dealing with a revision petition. The Commissioner should fix a date for hearing and give an opportunity to the party to say what he has to say through his counsel.

The MP High Court in the case of Jaikishan Gopikishan and Sons Vs. Commissioner of Income-tax (178ITR481) also held that in the exercise of administrative powers the Commissioner is bound to afford an opportunity of hearing and to pass a reasoned order so that the person, against whom the order is passed, the result of which may be payment of penalty, interest or even prosecution or subject to denial of the benevolent scheme or refusal of the benefit of the Amnesty Scheme, by which the Government is bound, because of “promissory estoppel”. Hence, it is essential that the Commissioner of Income-tax at least should give an opportunity of hearing and pass a speaking order by giving sufficiently clear and explicit reasons in support of the order made by him, as a reasoned order promotes public confidence in the administrative process.

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