2023 (4) TMI 1225 - HC - Income Tax

Validity of faceless assessment u/s 144B - denial of reasonable opportunity of being heard while conducting the faceless assessment - HELD THAT - In view of delayed compliance made by petitioner/assessee, response to the notice u/s 142(2) and partial response to notice u/s 142(1) and in the face of period of limitation for completion of proceeding coming to an end in the near future, the Revenue by notice afforded two days time to the petitioner/assessee for making his submission. Thus it is obvious that since all proceedings were conducted faceless including passing of orders, the contention of petitioner of denial of opportunity of physical hearing cannot be countenanced. Moreso, the ground of disabling factor of close down imposed due to Covid 19 pandemic also cannot be treated as good ground. The online proceedings of faceless assessment could have been undertaken even during lock down, unless there was a break down of internet facility, which is not the case herein. There is no denial of reasonable opportunity of being heard while conducting the faceless assessment by Revenue. Petitioner is relegated to avail statutory remedy of appeal against the order of assessment in accordance with law.

Summary

Issues involved: Challenge to assessment order under Income Tax Act for assessment year 2018-19 on grounds of violation of natural justice and seeking judicial review under Article 226 of the Constitution.

Summary:
The petition filed under Article 226 of the Constitution challenges the assessment order dated 29.04.2021 passed by the Income Tax Department under Sections 143(3) and 144 B of the Income Tax Act for the assessment year 2018-19. The petitioner, a Government Company formerly known as M.P. Trade & Investment Facilitation Corporation Ltd., was selected for scrutiny by JAO as per CBDT instructions. Despite delays in responding to notices and providing necessary documents, the Revenue proceeded with the assessment. The petitioner contended that the assessment order violated the principle of natural justice, justifying the invocation of judicial review under Article 226.

The Court had earlier restrained the respondents from taking coercive steps against the petitioner pending the case. The petitioner argued that the impugned assessment order was a blatant violation of natural justice, eliminating the need for an appeal and warranting judicial review under Article 226. The Revenue conducted faceless proceedings, and the petitioner alleged denial of physical hearing opportunity, which the Court found unsubstantiated, given the circumstances and the availability of online proceedings during the pandemic. The Court concluded that there was no denial of a reasonable opportunity to be heard during the faceless assessment by the Revenue.

In light of the above, the Court held that the petitioner must avail the statutory remedy of appeal against the assessment order as per the law. The petition was disposed of with the liberty granted to the petitioner to pursue the appeal as per statutory provisions.