2022 (12) TMI 189 - HC - Income Tax

Validity of faceless assessment u/s 144B - denial of the principles of natural justice to the Petitioner by not affording her a hearing through video conferencing - HELD THAT - We are of the opinion that the Respondent has not afforded to the Petitioner a fair hearing in the matter. Respondents ought to have either responded to the Petitioner s request for extension of time till 25.02.2022 for filing her reply, by rejecting her request or at least responded to the Petitioner s request on 19.02.2022 for an online hearing of her case by video conferencing. Having not given to the Petitioner an opportunity of personal hearing as was required to be done under the provisions of Section 144B of the Act as specified in the show-cause notice dated 03.02.2022 itself, we find that the Respondents have acted in arbitrary manner. Consequently, we set aside the order of assessment, the notice of demand under Section 156 and show-cause notice initiated penalty proceedings under Section 270 read with Section 270A of the Act of the same date, passed by the Respondent assessing officer.

Summary

Issues Involved:
1. Challenge to assessment order, notice of demand, and penalty proceedings under the Income Tax Act, 1961.
2. Denial of adequate opportunity for filing reply and hearing through video conferencing as required under Section 144B of the Act.
3. Allegation of lack of fair hearing and arbitrary behavior by the Respondents.

Detailed Analysis:
1. The Writ Petition challenges an assessment order, notice of demand, and penalty proceedings under the Income Tax Act, 1961. The Petitioner's case revolves around discrepancies in agricultural income disclosed, ownership of land, and subsequent disallowance of claimed exemptions, leading to penalty proceedings. The Respondents issued notices, including a show-cause notice, to which the Petitioner responded, but faced challenges in filing replies and obtaining a fair hearing through video conferencing.

2. The primary issue raised is the denial of an adequate opportunity for the Petitioner to file a reply and have a hearing through video conferencing as mandated by Section 144B of the Act. The Petitioner's counsel argued that the principles of natural justice were violated by not providing a proper hearing process. Despite attempts to seek an extension for filing replies and requesting a hearing, the Petitioner faced obstacles in uploading responses and securing a fair chance to present her case.

3. The Court found that the Respondents did not afford the Petitioner a fair hearing, acting in an arbitrary manner by ignoring requests for extension and online hearing. The judgment highlighted the failure to adhere to the procedural requirements of Section 144B of the Act, leading to the setting aside of the assessment order, notice of demand, and penalty proceedings initiated by the assessing officer. The Court directed the Face Less Assessment Centre to provide the Petitioner with a personal hearing through video conferencing and instructed a fresh order after considering her response, emphasizing the importance of procedural fairness and adherence to legal requirements in such matters.