Facts of the Case

The petitioner, Raj Kumar Mangla, appeared before the Delhi High Court in person and challenged certain actions taken by the Income Tax Department.

The petitioner raised two principal grievances.

First Grievance – Transfer of Case

The petitioner challenged an order dated 14.10.1998 passed under Section 127(2) of the Income-tax Act, whereby his case was transferred from the office of the Assistant Commissioner of Income Tax (Investigation), Gurgaon, to the office of the Income Tax Officer, Ward No. 10(1), Delhi.

The petitioner contended that his rectification application filed before the Commissioner of Income Tax (Appeals), Faridabad could not have been transferred under Section 127(2), as according to him only assessment proceedings were capable of being transferred.

Second Grievance – Disposal of Rectification Application

The petitioner challenged the order dated 26.04.2005 passed by the Commissioner of Income Tax (Appeals), New Delhi dismissing his application under Section 154.

The petitioner asserted that the application had been rejected without granting him any opportunity of hearing.

The record revealed that this was the third rectification application filed by the petitioner concerning the same appellate orders. Earlier rectification applications had already been rejected by the Commissioner of Income Tax (Appeals), Faridabad.

After rejection of the third application, the petitioner filed a fourth application under Section 154 seeking rectification of the same issues.

The writ petitions were therefore filed before the Delhi High Court.

Issues Involved

  1. Whether disposal of a rectification application under Section 154 without granting personal hearing violates principles of natural justice.
  2. Whether repeated rectification applications concerning the same appellate orders should be encouraged.
  3. Whether the petitioner could continue challenging the transfer of his case under Section 127(2).
  4. Whether the impugned order dated 26.04.2005 required reconsideration by the Commissioner of Income Tax (Appeals).

 Petitioner’s Arguments

  • The petitioner contended that the transfer order under Section 127(2) was not applicable to his rectification proceedings.
  • It was argued that only assessment proceedings could be transferred and not pending rectification applications.
  • The petitioner further submitted that his application under Section 154 had been rejected without affording him a personal hearing.
  • He argued that denial of hearing resulted in violation of principles of natural justice.
  • The petitioner sought an opportunity to present his case before the appellate authority.

 Respondent’s Arguments

  • The Revenue defended the actions taken by the authorities under the Income-tax Act.
  • It was pointed out that multiple rectification applications had already been filed by the petitioner regarding the same appellate orders.
  • The Revenue highlighted the repetitive nature of the proceedings initiated by the petitioner.
  • However, the Revenue did not dispute that the impugned order had been passed without granting a personal hearing.

 Court Findings

The Delhi High Court recorded that the petitioner agreed not to press the challenge relating to transfer of the case under Section 127(2).

Accordingly, the Court held that no dispute survived on that issue.

With respect to the rectification proceedings, the Court observed that:

  • The petitioner had filed multiple applications under Section 154 concerning the same appellate orders.
  • Such repeated applications should not ordinarily be encouraged.
  • Nevertheless, the Court noted from the impugned order itself that no personal hearing had been granted before disposal of the petitioner’s rectification application.

The Court considered the peculiar facts and prolonged history of the dispute and concluded that the ends of justice would be served if the petitioner was granted one final opportunity of hearing.

The Court therefore held that the impugned order could not be allowed to stand.

 Court Order / Findings

  • The impugned order dated 26.04.2005 passed by the Commissioner of Income Tax (Appeals), New Delhi was set aside.
  • The Commissioner of Income Tax (Appeals), New Delhi was directed to provide the petitioner an opportunity of hearing.
  • The authority was directed to decide the rectification application afresh in accordance with law.
  • The fourth rectification application filed by the petitioner was deemed to have been withdrawn.
  • The petitioner undertook not to file any further rectification applications under Section 154 in relation to the same appellate orders.
  • The petitioner was directed to appear before the Commissioner of Income Tax (Appeals)-XXV, New Delhi on 24.05.2010.
  • The writ petitions were disposed of with the above directions.

 Important Clarification

The Court specifically clarified that:

Transfer Issue Closed

The petitioner voluntarily agreed not to pursue the challenge regarding transfer of his case from Gurgaon to Delhi. Consequently, that issue stood concluded.

No Further Section 154 Applications

The order was passed on the clear understanding that:

  • The petitioner would not file any further rectification applications under Section 154 relating to the same appellate orders.
  • The fourth rectification application would be treated as withdrawn.

Fresh Hearing Limited to Existing Application

The Court granted only one final opportunity to the petitioner in relation to the application dismissed on 26.04.2005.

The order did not confer any right to repeatedly seek rectification on the same grounds.

 Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2010:DHC:2543-DB/BDA05052010CW84042009.pdf 

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