2023 (6) TMI 1395 - HC - Income Tax

Denial of personal hearing through video conference - HELD THAT - As when the petitioner had made a specific request to afford an opportunity of personal hearing through video conference, the Respondents were required to grant the same to the petitioner. However, in the case on hand, admittedly, no such opportunity was granted to the petitioner and thereby, the Respondents have committed the breach of the principles of natural justice. This petition deserves to be allowed.

Summary

Issues involved:
1. Quashing of the impugned order dated 29.03.2022.
2. Quashing of the impugned notice of demand dated 29.03.2022.
3. Quashing of the impugned penalty notice dated 29.03.2022.
4. Request for stay on implementation and operation of the Assessment Order, notice of demand, and notice of penalty.
5. Opportunity of personal hearing through video conference.

Issue-wise Detailed Analysis:

1. Quashing of the impugned order dated 29.03.2022:
The petitioner filed the petition under Article 226 of the Constitution of India, seeking to quash the impugned order dated 29.03.2022. The petitioner argued that the order was passed without granting an opportunity for a personal hearing through video conference, despite a specific request made in the reply dated 26.03.2022. The court noted that the petitioner had indeed requested a personal hearing through video conference, which was not provided by the respondents, thereby breaching the principles of natural justice. The court referred to Section 144B(6)(viii) of the Income Tax Act, which mandates that a personal hearing through video conferencing should be allowed if requested. Consequently, the court quashed the impugned order dated 29.03.2022.

2. Quashing of the impugned notice of demand dated 29.03.2022:
The petitioner also sought to quash the notice of demand issued on 29.03.2022. The court found that since the impugned order itself was quashed due to the failure to provide a personal hearing, the subsequent notice of demand, which stemmed from the impugned order, also stood invalid. Therefore, the court quashed the notice of demand dated 29.03.2022.

3. Quashing of the impugned penalty notice dated 29.03.2022:
Although the petitioner initially included the quashing of the penalty notice in the reliefs sought, the learned Advocate for the petitioner, Mr. Soparkar, did not press for this relief during the hearing. Consequently, the court did not consider this issue further.

4. Request for stay on implementation and operation of the Assessment Order, notice of demand, and notice of penalty:
The petitioner requested a stay on the implementation and operation of the Assessment Order, notice of demand, and notice of penalty during the pendency of the petition. Given that the court quashed the impugned order and notice of demand, this request became moot. The court did not need to address this issue separately as the primary reliefs were already granted.

5. Opportunity of personal hearing through video conference:
The petitioner specifically requested an opportunity for a personal hearing through video conference, as stated in the replies dated 16.03.2022, 17.03.2022, and 26.03.2022. The court emphasized the importance of adhering to the principles of natural justice, which include the right to a personal hearing. The court referred to the provisions of Section 144B(6)(viii) and the decision in €˜AGRAWAL JMC JOINT VENTURE VS. ASSISTANT/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER'. The court concluded that the respondents' failure to provide a personal hearing through video conference constituted a breach of the principles of natural justice. Therefore, the court remanded the matter to the Assessing Officer to grant the petitioner an opportunity for a personal hearing and to pass a fresh, reasoned order in accordance with the law.

Conclusion:
The court partly allowed the petition, quashing the impugned order dated 29.03.2022 and the notice of demand dated 29.03.2022. The matter was remanded to the Assessing Officer to provide the petitioner with an opportunity for a personal hearing through video conference and to pass a fresh order. The rule was made absolute to the extent mentioned.