Revisional order passed without granting requested personal hearing is legally unsustainable and must be remanded.

By | July 6, 2026
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Revisional order passed without granting requested personal hearing is legally unsustainable and must be remanded.

Issue

Whether the Principal Commissioner of Income Tax (PCIT) was legally justified in rejecting a revision application under Section 264 of the Income-tax Act, 1961, without granting the assessee a requested personal hearing and dealing with the contentions cursorily, despite the remedy being suggested by the Assessing Officer.

Facts

  • Application Filed: The assessee filed a statutory revision application under Section 264 of the Income-tax Act, specifically requesting an opportunity for a personal hearing.

  • Authority’s Stance: During the revisional proceedings, the tax authority issued a notice stating that a personal hearing was not compulsory and that a written submission alone would suffice.

  • Reiteration of Request: The assessee filed a formal reply explicitly reiterating the request to appear and present the case in person.

  • Rejection Order: By an order dated March 22, 2024, the PCIT summarily rejected the Section 264 application.

  • Cursory Adjudication: The PCIT recorded that the application could not be accepted merely because the Assessing Officer had mentioned the Section 264 remedy, dealing with the assessee’s core arguments in a superficial manner.

  • Writ Challenge: The assessee challenged this rejection order before the court, citing a breach of natural justice and a lack of proper administrative application of mind.

Decision

  • Denial of Fair Hearing: The High Court found that the PCIT erred in denying the personal hearing when it was explicitly sought by the taxpayer during the revision proceedings.

  • Arbitrary Rejection: The court observed that since the assessee had availed themselves of the Section 264 remedy based on the Assessing Officer’s own suggestion, the authority was bound to adjudicate it substantively.

  • Order Quashed: The court quashed and set aside the impugned Section 264 order along with all subsequent consequential orders due to procedural unfairness and a lack of recorded reasons.

  • Matter Remanded: The case was remanded back to the competent revisional authority with directions to pass a fresh, reasoned order after addressing all the contentions raised by the assessee and granting them a proper personal hearing.

Key Takeaways

  • Personal Hearing is Essential on Request: Even where a statute implies that written submissions may suffice, if a taxpayer explicitly requests a personal hearing in a revisional or quasi-judicial proceeding, denying it violates the principles of natural justice.

  • Duty to Pass a Reasoned Order: Revisional authorities cannot deal with an assessee’s detailed legal contentions cursorily or dismiss them on superficial administrative pretexts. Every final order must be a speaking order containing clear reasoning.

  • Administrative Estoppel: When a subordinate officer (like an Assessing Officer) points a taxpayer toward a specific statutory remedy, the higher revisional authority cannot later penalize the taxpayer or summarily dismiss the application for simply pursuing that route.

HIGH COURT OF GUJARAT
Bhikhabhai Maneklal Patel
v.
Office of Principal Commissioner of Income-tax
A.S. Supehia and Vaibhavi D. Nanavati, JJ.
R/SPECIAL CIVIL APPLICATION NO. 12819 of 2024
JUNE  8, 2026
Sudhir M. Mehta and Ms. Shailee S. Mehta for the Petitioner. Aaditya D. Bhatt for the Respondent.
ORDER
A.S. Supehia, J.- Since a very short issue is involved, with consent of learned advocates appearing for the respective parties, the matter is taken up for final hearing.
2. RULE. Learned Senior Standing Counsel Mr. Aaditya D. Bhatt waives service of notice of rule on behalf of respondent no.1.
3. At the outset, learned advocate Mr. Sudhir M. Mehta for the petitioner has submitted that the matter may be remanded to the respondent authorities, i.e. Principal Commissioner of Income Tax, Ahmedabad-3 (for short ‘PCIT- Ahmedabad-3’) for deciding the application on merits after affording an opportunity of hearing to the petitioner. He has referred to the Assessment Order dated 30.03.2022, wherein the Assessing Officer has made a remark that the assessee has a remedial action under the provision of Section 264 of the Income Tax Act,1961 (for short ‘the Act’). It is submitted that accordingly, the petitioner filed a revision application under Section 264 of the Act, raising various contentions dated 11.05.2022 and also requested for personal hearing. It is further submitted that a Notice for the hearing dated 01.03.2024 was also issued to the petitioner, stating that personal hearing is not compulsory to and a written submission or a reply shall be treated as sufficient compliance. Thereafter, the petitioner filed reply on 08.03.2024 also intimating the competent authorities to allow the petitioner to appear in person. However, by the impugned order dated 22.03.2024 the application filed by the petitioner under Section 264 of the Act is rejected by recording that merely because the Assessing Officer has mentioned in its order to file an application under Section 264 of the Act, such application cannot be accepted. Thus, it is urged that the matter may be remand to the competent authority for fresh consideration.
4. Reliance is placed on the judgment passed by Punjab and Haryana High Court in the case of Sahil Machines India (P.) Ltd. v. Union of India  (Punjab & Haryana) as well as the judgment passed by the High Court of Calcutta in the case of Vikas Nagelia v. CIT  (Calcutta).
5. Upon query raised by this Court, learned Senior Standing Counsel Mr. Aaditya Bhatt, as to whether any opportunity of personal hearing was given to the petitioner or not before rejecting the application under Section 264 of the Act, he is unable to controvert the same. The aforesaid facts are not denied and we have specifically noted that the Assessing Officer in its order dated 30.03.2022, has specifically recorded that the petitioner has a remedial action under Section 264 of the Act and accordingly the petitioner pursued the said observation and filed an application under Section 264 of the Act, which has been rejected by the PCIT Ahmedabad-3 without giving personal hearing to the petitioner though the petitioner has requested for the same. We have also noted that petitioner has raised various contentions in his reply, which have been very cursorily dealt with by the respondent- PCIT, Ahmedabad-3. Finally, the application has been rejected by merely recording that the Assessing Officer has stated that order passed by him is subject to provision of Section 264 of the Act and such application cannot be accepted.
6. It is not in disput that the petitioner has availed the remedy available to file the revision application under Section 264 of the Act as suggested by the Assessing Officer. Accordingly, we quash and set aside the impugned order dated 22.03.2024 passed under Section 264 of the Act along with all the consequential orders. The matter is remanded to the competent authorities to decide the same after dealing all the contentions raised by the petitioner in the revision application by a reasoned order, in accordance with law. If the competent authorities so desires shall give an opportunity of hearing to the petitioner. Accordingly, the present writ petition is partly allowed. Rule is made absolute to the aforesaid extent.