2021 (6) TMI 17 - HC - Income Tax

Faceless assessment u/s 144B - Whether any standards, procedures and processes have been framed by revenue in terms of sub-clause (h) of clause (xii) of Section 144B(7)? - HELD THAT - Ms. Malhotra had informed us that, in this regard, she had no instructions. We have queried Ms. Malhotra, once again today. Ms. Malhotra says that she has, still, not received any instructions in that regard. Therefore, we have to presume that, no standards, procedures and processes have been framed in terms of clause (xii) Section 144B(7) of the Act. These standards, procedures and processes are required to be framed, to guide the assessing officer as to whether or not personal hearing in a given matter should be granted. Since the statute itself makes the provision for grant of personal hearing, the respondents/revenue cannot veer away from the same. Accordingly, the impugned assessment order as well as the impugned notice of demand and notice for initiating penalty proceedings, of even date, i.e., 29.04.2021, are set aside. Liberty is, however, given to the respondents/revenue to proceed from the stage of the show cause notice-cum-draft assessment order. The respondents/revenue will grant a personal hearing to the authorized representative of the petitioner. The concerned officer will conduct the hearing via video-conferencing mechanism. For this purpose, prior notice, indicating the date and time, will be served on the petitioner, through its registered e-mail. Respondent no. 2 will, after hearing the authorized representative of the petitioner, pass a fresh order, albeit, as per law.

Summary

Issues:
1. Extension of time for filing attested affidavits and deposition of court fee.
2. Flawed assessment order and consequential notices.
3. Requirement of personal hearing under Section 144B(7)(vii) of the Income Tax Act, 1961 and SOP for Faceless Assessment Scheme, 2019.

Extension of Time for Filing Affidavits and Deposition of Court Fee:
The court allowed the application for extension of time for filing attested affidavits and deposition of the court fee, subject to exceptions. The applicant/petitioner was directed to deposit the requisite court fees and file duly attested affidavits within three days of the court's resumption of normal work pattern.

Flawed Assessment Order and Consequential Notices:
The petitioner challenged the assessment order, notice of demand, and notice for initiating penalty proceedings, contending they were flawed as they contravened Section 144B(7)(vii) of the Income Tax Act, 1961 and the SOP for Personal Hearing through Video Conference under the Faceless Assessment Scheme, 2019. The court acknowledged the petitioner's grievance and set aside the impugned assessment order and notices issued on the same date. However, the respondents were granted liberty to proceed from the stage of the show-cause notice-cum-draft assessment order.

Requirement of Personal Hearing:
The petitioner argued that a personal hearing was mandatory under Section 144B(7)(vii) of the Act and the SOP issued by the CBDT. The court noted that the petitioner had made a specific request for a personal hearing due to the complexity of the matter and the impact of COVID-19. Referring to the Lemon Tree Case, the court highlighted the absence of framed standards, procedures, and processes for granting personal hearings. Emphasizing the statutory provision for personal hearings, the court ruled in favor of the petitioner, setting aside the impugned assessment order and notices. The respondents were directed to grant a personal hearing to the petitioner's authorized representative via video-conferencing, with a fresh order to be passed in accordance with the law.

In conclusion, the judgment addressed the issues of extension of time for filing affidavits and deposition of court fee, the flawed assessment order and consequential notices, and the requirement of a personal hearing under Section 144B(7)(vii) of the Income Tax Act, 1961 and the SOP for Faceless Assessment Scheme, 2019. The court granted relief to the petitioner, emphasizing the statutory provision for personal hearings and directing the respondents to conduct a personal hearing for the petitioner's authorized representative via video-conferencing.