2024 (5) TMI 351 - HC - Income Tax

Faceless Assessment - Validity of assessment order passed u/s 143(3) r.w.s. 144B - non affording a reasonable opportunity to be heard through video conferencing - Denial of natural justice - HELD THAT - A plain reading of Section 144B (6)(viii) of the Act indicates that where a request for personal hearing is received the Income Tax Authority of the relevant unit shall allow a hearing through National Faceless Assessment Centre which shall be effected exclusively through a video conferencing or video telephone. Since the request for video conferencing was made by the petitioner it is mandatory for the respondent to accede to the same in terms of Section 144B (6)(viii) of the Act. It is well recognized that an opportunity to be heard is an important facet of natural justice. Thus before passing an adverse order a reasonable opportunity of hearing is required to be afforded to the petitioner. Undisputedly in the present case the Act expressly provided for the concerned Unit to afford the assessee an opportunity of hearing. In this view we find merit in Mr. Kapoor s contention that the impugned assessment order falls foul of the principles of natural justice and the statutory requirement of affording the assessee an opportunity of being heard. Accordingly we set aside the impugned assessment order and remand the matter to the concerned Assessing Officer to consider afresh after affording a reasonable opportunity to be heard through video conferencing as is required in terms of Section 144B (6)(viii) of the Act.

Summary

Issues involved:
The judgment involves challenging an assessment order passed u/s 143(3) read with Section 144B of the Income Tax Act, 1961, and the demand raised u/s 156 of the Act for the Assessment Year 2022-23 due to alleged lack of opportunity to be heard.

Impugned Assessment Order and Lack of Opportunity:
The petitioner challenged the assessment order, claiming insufficient opportunity to be heard. The petitioner responded to a show cause notice within the short timeline provided, requesting additional time and a chance for a personal hearing. The petitioner's request for a personal hearing was attempted to be uploaded online but was unsuccessful. The respondent contended that the request for a personal hearing needed to be made online, and failure to do so correctly meant the Assessing Officer was not obligated to provide a hearing. However, the respondent could not cite any provision supporting this argument.

Legal Provisions and Principles of Natural Justice:
Sections 144B (6)(vii) and 144B (6)(viii) of the Act were referenced, emphasizing the requirement for a personal hearing upon request. The judgment highlighted the importance of natural justice and the need for a reasonable opportunity to be heard before passing an adverse order. Referring to a Supreme Court case, it was noted that even when a statute does not explicitly provide for a hearing, it is considered a principle of natural justice. The court found merit in the petitioner's argument that the assessment order violated the principles of natural justice and statutory requirements for affording the assessee an opportunity to be heard.

Decision and Remand:
The court set aside the impugned assessment order and remanded the matter to the Assessing Officer for reconsideration after providing a reasonable opportunity for a hearing through video conferencing, as mandated by Section 144B (6)(viii) of the Act. The petitioner was also allowed to submit written submissions within a week from the judgment date. The petition was disposed of accordingly, along with all pending applications.