2021 (9) TMI 663 - HC - Income Tax

Faceless assessment u/s 144B - As argued assessment order has been passed without affording the petitioner due opportunity of being heard despite the Petitioner seeking a personal hearing - HELD THAT - As the impugned assessment order dated 15th April, 2021 passed by the Respondents under Section 143(3) read with Sections 143(3A) 143(3B) of the Act for the Assessment Year 2018-19 is set aside and the matter is remanded back to the Assessing Officer, who shall grant an opportunity of hearing to the petitioner by way of Video Conferencing and thereafter pass a reasoned order in accordance with law.

Summary

Issues:
Challenge to assessment order under Income Tax Act, 1961 for Assessment Year 2018-19 based on lack of opportunity for personal hearing.

Analysis:
The petitioner challenged the assessment order dated 15th April, 2021, under Section 143(3) of the Income Tax Act, 1961, for the Assessment Year 2018-19, claiming it was passed without affording a personal hearing despite the petitioner's request. The petitioner sought a personal hearing through video conferencing as per the Faceless Assessment Scheme. The Respondent issued a show cause notice regarding additions to be made in the assessment proceedings, and the petitioner replied on 15th April, 2021, requesting a virtual hearing. However, the assessment order was passed the same day without a video conferencing opportunity, leading to an arbitrary addition of amounts and a substantial demand.

The Respondent argued that the provision for a personal hearing in Section 144B(7) uses the term 'may' instead of 'shall,' indicating no vested right for the petitioner to claim a personal hearing. However, the court analyzed Section 144B(7) and (9) and referred to a previous judgment emphasizing the obligation on the revenue to consider requests for personal hearings and the absence of established procedures for dealing with such requests. The court held that the lack of response to the petitioner's requests for a personal hearing necessitated setting aside the impugned orders.

In light of the legal provisions and the previous judgment, the High Court set aside the impugned assessment order and remanded the matter back to the Assessing Officer. The Assessing Officer was directed to provide the petitioner with a hearing via Video Conferencing and subsequently pass a reasoned order in compliance with the law. The writ petition and pending applications were disposed of accordingly, with instructions for uploading the order on the website and forwarding a copy to the counsel via email.