2021 (6) TMI 410 - HC - Income Tax

Validity of assessment order - Request for personal hearing rejected - Faceless Assessment - HELD THAT - Given the circumstances, which were put forth by the petitioner in the communication the AO should have, in the very least, dealt with the same, i.e., either rejected the request made or accommodated the petitioner having regard to the circumstances put forth by her. In reaching a conclusion as to which of the two options he/she should opt for, the AO could have asked for necessary supporting material, in case, he/she was under the impression that what was stated in the said communication was only a ruse to impede progress of the matter. Respondent no.1, instead, proceeded to pass the impugned assessment order, dated 26.05.2021, even when the timeframe for passing the assessment order stood extended till 30.06.2021. Therefore, according to us, since the revenue, time and again, portrays to the assessees at large, in various communications, that since Covid-19 pandemic is prevalent, it would like to create an environment, which is friendly, this approach of the revenue, while carrying out assessment proceedings, has not been understood by us. According to us, on this short point alone, the impugned order deserves to be set aside. Second ground/objection raised need not detain us i.e. the purported failure on the part of the respondents/revenue to deal with and/or factor in the detailed response/objections filed by the petitioner while passing the impugned assessment order led to breach of natural justice , in view of what is stated hereinabove by us. This objection may not survive once a fresh assessment order is passed. For the foregoing reasons, we are inclined to set aside the impugned assessment order dated 26.05.2021, as also the consequential notice of demand and notice for initiating penalty proceedings of even date.

Summary

Issues:
1. Exemption from filing court fee and affidavits
2. Challenge to assessment order, demand notice, and penalty proceedings
3. Denial of personal hearing before passing assessment order
4. Breach of natural justice due to failure to consider detailed objections
5. Setting aside the assessment order and related notices

Exemption from filing court fee and affidavits:
The petitioner sought exemption from filing court fee and sworn/notarized/affirmed affidavits. The court directed the petitioner to submit the affidavits and court fee within three days of the court resuming normal work pattern.

Challenge to assessment order, demand notice, and penalty proceedings:
The writ petition challenged the assessment order dated 26.05.2021, the demand notice under Section 156 of the Income Tax Act, and the notice for penalty proceedings under Section 271AAC(1) of the Act for the assessment year 2018-2019.

Denial of personal hearing before passing assessment order:
The petitioner was aggrieved by not being granted a personal hearing before the assessment order was passed. Despite requesting a video-conferencing hearing due to COVID-19 circumstances, the petitioner's request was not addressed, and the assessment order was passed without a personal hearing.

Breach of natural justice due to failure to consider detailed objections:
The court noted that the Assessing Officer should have considered the petitioner's request for a personal hearing, especially given the circumstances explained by the petitioner related to COVID-19. The failure to address the request for a hearing and pass the assessment order without accommodating the petitioner's situation was considered a breach of natural justice.

Setting aside the assessment order and related notices:
The court set aside the assessment order dated 26.05.2021, along with the consequential notice of demand and notice for initiating penalty proceedings. The Assessing Officer was directed to pass a fresh assessment order after providing a personal hearing to the petitioner via video-conferencing, ensuring natural justice is upheld. The court disposed of the writ petition accordingly.