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2024 (6) TMI 1303 - HC - Income TaxIssues Involved: 1. Jurisdiction of the Assessing Officer. 2. Violation of principles of natural justice. 3. Availability of alternative efficacious remedy. 4. Compliance with CBDT circulars regarding personal hearing. Issue-wise Detailed Analysis: 1. Jurisdiction of the Assessing Officer: The petitioner challenged the jurisdiction of the Assessing Officer to pass the assessment order dated 18.03.2024. The petitioner argued that the case was initially with the National Faceless Assessment Center, and no notice regarding the transfer of the case under section 144B (8) of the Income Tax Act was received. The respondent contended that the case was transferred to the jurisdictional Assessing Officer as per the directions of the National Faceless Assessment Center due to the partially set aside nature of the case. The court found that the assessment proceedings were conducted pursuant to an order passed under section 263, and therefore, the jurisdictional Assessing Officer had the authority to conduct the assessment. 2. Violation of Principles of Natural Justice: The petitioner argued that the assessment order was passed without providing an opportunity for a personal hearing, violating the principles of natural justice. The petitioner had specifically requested a personal hearing in submissions dated 15.02.2024 and 08.03.2024. The respondent admitted that the request for a personal hearing was rejected due to the lack of functionality to conduct hearings through video conference. The court held that as per section 144B of the Act and the CBDT circular dated 06.09.2021, the respondent was required to provide a personal hearing through video conference or in a designated area of the Income Tax office. The court found that the respondent's actions were contrary to the circular issued by the CBDT. 3. Availability of Alternative Efficacious Remedy: The respondent argued that the petition should not be entertained as the petitioner had an alternative efficacious remedy by filing an appeal before the CIT (Appeal). The court held that the availability of an alternative remedy does not bar the court from exercising its jurisdiction, especially when there is a breach of natural justice. The court referred to the settled legal position by the Hon'ble Supreme Court in the case of Whirlpool Trade Marks, Mumbai, and others, which allows the court to entertain petitions despite the availability of alternative remedies in cases of natural justice violations. 4. Compliance with CBDT Circulars Regarding Personal Hearing: The court emphasized the importance of compliance with CBDT circulars, particularly the circular dated 06.09.2021, which mandates that personal hearings should be allowed preferably through video conference or in a designated area if video conferencing is not feasible. The court noted that the respondent's failure to provide a personal hearing was contrary to the CBDT circular and the provisions of section 144B of the Act. The court reiterated that the Assessing Officer is required to issue a show-cause notice indicating the reasons for proposed additions or disallowances and provide the assessee with an opportunity to explain their position. Conclusion: The court concluded that the impugned assessment order dated 18.03.2024 was passed in violation of the principles of natural justice and without proper jurisdiction. The court quashed and set aside the assessment order and remanded the matter back to the respondent Assessing Officer to provide an opportunity for a personal hearing either through video conference or in a designated area of the Income Tax office. The court directed that this exercise be completed within twelve weeks from the date of receipt of the order. The rule was made absolute to the aforesaid extent, with no order as to costs.
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