2021 (8) TMI 1291 - HC - Income Tax

Validity of Faceless Assessment - despite the Petitioner requesting for a personal hearing in terms of Section 144B(7)(vii) of the Income Tax Act, 1961, the impugned assessment order was passed without affording such a hearing - HELD THAT - Not only is the Assessee given a right to make a request for personal hearing, but it is mandatory for the authority to provide for such personal hearing. With there being no dispute that the Petitioner did make such a request, it was incumbent on the Opposite Parties to have given it an opportunity of being heard. The reply filed by the Opposite Parties only deals with the merits of the assessment itself and does not dispute that the above mandatory procedural requirement was not complied with. In that view of the matter, on this short ground, the impugned assessment order is set aside and the matter is remanded to the assessing officer, i.e. National e-Assessment Centre, for compliance of the mandatory requirement of Section 144 B (7) (vii) of the Act and provide a personal hearing to the Petitioner as requested by it on a date and time to be conveyed to it at least one week in advance. It is made clear that the hearing can be in either physical or virtual mode. A fresh assessment order shall be passed thereafter within three months. If aggrieved by such order, it would be open to the Petitioner to seek appropriate remedies in accordance with law. The Court makes it clear that it has not expressed any view on the merits of the case, except on the above limited procedural error of non-compliance with the mandatory requirement of Section 144 B (7) (vii) of the Act. The writ petition is disposed of in the above terms.

Summary

Issues:
Challenge to assessment order under Faceless Assessment for lack of personal hearing as requested by the Petitioner.

Analysis:
The Petitioner challenged the assessment order passed under Faceless Assessment, citing the absence of a personal hearing despite a request made in accordance with Section 144B(7)(vii) of the Income Tax Act, 1961. Reference was made to a judgment of the Delhi High Court mandating a personal hearing in similar circumstances. The Senior Standing Counsel accepted notice and sought instructions on providing a hearing at a later stage. The Court directed no coercive action against the Petitioner until the next date. The Petitioner's request for a hearing was acknowledged, and it was noted that the provision for personal hearing under Section 144B(7)(vii) is mandatory, not merely directory.

The Court emphasized that the authority must provide a personal hearing upon request, which was not disputed in this case. Consequently, the impugned assessment order was set aside, and the matter was remanded for compliance with the mandatory requirement of providing a personal hearing. The assessing officer was directed to schedule the hearing at least one week in advance, either physically or virtually. A fresh assessment order was to be passed within three months, with the Petitioner retaining the right to seek remedies if aggrieved. The Court clarified that its decision was based solely on the procedural error of non-compliance with Section 144B(7)(vii) and did not address the case's merits.

In conclusion, the writ petition was disposed of with the above directions, and an urgent certified copy of the order was to be issued as per rules. The judgment focused on upholding the mandatory nature of providing a personal hearing under the Income Tax Act, ensuring procedural fairness in the assessment process under the Faceless Assessment scheme.