2024 (10) TMI 183 - HC - Income Tax

Validity of Assessment Orde passed u/s 143(3) r.w.s. 144B - there is a breach of principles of natural justice as the petitioner could not avail the opportunity of hearing through video conferencing which was granted - petitioner submitted that on 27.03.2022, an intimation was given to the petitioner of personal hearing through video conferencing, fixing the time at 11.00 a.m. on 28.03.2022 - AO has duly recorded that the petitioner failed to logged into the portal to avail the opportunity of hearing granted on 28.03.2022 HELD THAT - Though the petitioner has prayed for personal hearing through video conference and in spite of the fact that the petitioner logged into the portal as stated in the communication made by the petitioner placed on record, no one appeared for video conferencing on behalf of the respondent and the petitioner therefore prayed for another opportunity of personal hearing which was not granted and on the next date which was 29.03.2022, the impugned order was passed. The petitioner is entitled to the personal hearing and as no personal hearing through video conferencing is granted though it was scheduled on 28.03.2022, there is a breach of principles of natural justice. Therefore, without entering into the merits of the matter, the impugned order dated 29.03.2022 is hereby quashed and set aside and the matter is remanded back to the respondent AO to pass a fresh de novo order after giving personal hearing to the petitioner through video conference in accordance with law.

Summary

Issues:
Challenge to Assessment Order under Income Tax Act due to breach of natural justice in availing video conferencing for personal hearing.

Analysis:
The petitioner challenged the Assessment Order dated 29.03.2022 under Section 143(3) of the Income Tax Act, 1961, citing a breach of natural justice as they were unable to avail the opportunity of a video conference hearing scheduled on 28.03.2022. The petitioner's representative was online and logged in but no one appeared for the conference, despite communication to this effect. The Assessing Officer incorrectly recorded that the petitioner did not log in for the hearing, which was disputed with evidence. The petitioner sought to quash the order and remand the matter for a fresh hearing through video conferencing as per Section 144B(7) of the Act.

The Senior Standing Counsel for the respondent contended that the petitioner failed to log in for the hearing, as recorded by the Assessing Officer. However, the documents provided by the petitioner contradicted this claim, showing an immediate response regarding the inability to participate in the video conference. The court noted the discrepancy and considered the petitioner's plea for another opportunity for a personal hearing through video conferencing.

The court observed that the petitioner had requested a video conference hearing, logged in as evidenced, but no one appeared for the conference, leading to a denial of the opportunity for a personal hearing. Citing Section 144B(1)(vii) of the Act, which mandates the right to a response and personal hearing, the court found a breach of natural justice due to the failure to conduct the video conference as scheduled. Without delving into the merits of the case, the court quashed the impugned order and remanded the matter to the Assessing Officer for a fresh decision after providing a video conference hearing to the petitioner within 12 weeks.

The court clarified that the decision did not assess the merits of the case, and the Assessing Officer was directed to issue a fresh order within the specified timeframe, ensuring a video conference hearing for the petitioner as per the law. Consequently, the petition was disposed of, and the notice was discharged.