2022 (3) TMI 348 - HC - Income Tax

Faceless Assessment Scheme - Validity of assessment order in terms of Sections 143 (3) read with 263 read with 144B - violation of principles of natural justice - HELD THAT - This court is of the view that the 2nd respondent passed the impugned assessment order in terms of Sections 143 (3) read with 263 read with 144B of the Income Tax, without affording an opportunity of hearing through video conferencing to the petitioner, though a specific request was made by the petitioner for personal hearing through video conferencing in terms of Section 144B (7) (vii) (ix), which is not only in violation of principles of natural justice, but also in violation of the mandatory provisions as contemplated under Section 144B (7) (vii) (ix) of the Act. Hence, the impugned assessment order is not sustainable in law and the same is liable to be set aside. Writ petition is allowed setting aside the Assessment Order passed by the 2nd respondent and the matter is remitted back to the Assessing Officer for a fresh assessment after duly affording a reasonable opportunity of hearing the petitioner and then pass appropriate orders in accordance with law as expeditiously as possible.

Summary

Issues:
Challenging final assessment order under Income Tax Act, 1961 - Violation of principles of natural justice - Faceless Assessment Scheme - Opportunity for personal hearing through video conferencing.

Detailed Analysis:
The petitioner filed a writ petition challenging the final assessment order issued by the 2nd respondent under Section 143 (3) of the Income Tax Act, 1961, alleging that the order was passed without affording an opportunity for a personal hearing through video conferencing, despite the petitioner's request. The petitioner contended that the order was illegal, arbitrary, and violated principles of natural justice.

The 2nd respondent admitted that the petitioner was not granted a personal hearing through video conferencing as requested but argued that the petitioner had been given sufficient opportunities in line with the principles of natural justice. The respondent contended that the petitioner had not made out a prima facie case warranting the court's interference, seeking dismissal of the writ petition.

The court referred to Section 144B of the Act, which outlines the provisions for faceless assessment, particularly emphasizing the opportunity for personal hearing through video conferencing as per the request of the assessee. The court highlighted the importance of granting a personal hearing to ensure fairness and compliance with the mandatory procedures of the Faceless Assessment Scheme.

Citing relevant case laws, including judgments by the High Courts of Delhi and Bombay, the court underscored the significance of adhering to principles of natural justice and providing a reasonable opportunity for a personal hearing when requested by the assessee. The court emphasized that the failure to grant a personal hearing through video conferencing, as per the petitioner's request, amounted to a violation of both natural justice principles and the mandatory provisions of the Act.

Consequently, the court allowed the writ petition, setting aside the impugned assessment order dated 29.09.2021 and remitting the matter back to the Assessing Officer for a fresh assessment. The court directed the Assessing Officer to afford a reasonable opportunity for a personal hearing through video conferencing to the petitioner and to pass appropriate orders in accordance with the law promptly.

In conclusion, the court's decision highlighted the importance of upholding principles of natural justice, particularly in the context of faceless assessments, and underscored the mandatory nature of providing a personal hearing when requested by the assessee under the relevant provisions of the Income Tax Act, 1961.