2022 (2) TMI 984 - HC - Income Tax

Validity of faceless assessment order u/s 144B - Denial of natural justice - Petitioner did not get a personal hearing - HELD THAT - This Court is of the view that as the option to opt for personal hearing was not enabled, the petitioner due to technical glitches could not request for personal hearing on the e-portal. Consequently, it cannot be said that the petitioner did not opt for personal hearing in the present case. Keeping in view the aforesaid, the impugned assessment order dated 22nd April, 2021 along with the consequential demand and penalty notice is set aside and the matter is remanded back to the Assessing Officer, who shall grant an opportunity of personal 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 2018-2019; Failure to enable personal hearing through video conferencing; Interpretation of Section 144B (7) and (9) of the Act; Compliance with the obligation to grant personal hearing; Setting aside of assessment order and remand to Assessing Officer.

Analysis:
The petitioner, engaged in real estate projects, challenged an assessment order dated 22nd April, 2021 under Section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2018-2019. The petitioner's case was selected for scrutiny to examine "Income from Real Estate Business." Despite responding to all notices and submitting evidence, discrepancies arose regarding proposed additions to income. The petitioner sought personal hearing through video conferencing to explain complex issues, but technical glitches prevented the request. The respondent argued that no formal request for personal hearing was submitted on the e-portal, relying on orders from April 2021.

The Court examined Section 144B (7) of the Act, emphasizing the provision for a personal hearing if requested by the assessee. Referring to a previous judgment, the Court highlighted the obligation on the revenue to consider and grant personal hearings, noting the absence of established procedures for dealing with such requests. In this context, the Court found it necessary for the revenue to accord a personal hearing to the petitioner, especially considering the unaddressed requests made by the petitioner.

Given the technical issues preventing the petitioner from opting for a personal hearing, the Court concluded that the petitioner did not waive the right to a hearing. Consequently, the Court set aside the assessment order dated 22nd April, 2021, along with associated demands and penalties, remanding the matter to the Assessing Officer for a proper hearing through video conferencing and subsequent reasoned decision-making in compliance with the law. The Court disposed of the writ petition with these directions, instructing the order's immediate upload and forwarding to the concerned parties via email.