2024 (10) TMI 106 - HC - Income Tax

Validity of Order of Assessment u/s 143 (3) r/w 144B - violation of principle of natural justice - though personal hearing through video conferencing was sought the same was not responded and accorded prior to passing of the impugned order - HELD THAT - Considering the fact and the documents on record it is noticed that though hearing through video conferencing was sought by the assessee, the same was not responded before passing the order of assessment under section 143 (3) r/w 144B of the Act, which in our opinion is in breach of Section 144B (7) (vii) (2) of the Act, and violative of principles of natural justice. It is the duty cast upon the authorities in faceless assessment, if there is a demand for personal hearing, the same deserve to be granted. Keeping in mind the mandatory provision, if the facts of the present case is considered, indisputably, the request made by the petitioner for personal hearing through video conferencing at that stage was acceded to, however, intimation thereof was sent after the time of hearing was scheduled. Admittedly, on the second time, the request of the petitioner for granting personal hearing through video conferencing, intimation thereof was to be given one day advance, was not either acceded to or taken care of by the revenue authorities and straightway, the impugned order was passed. Thus, provision of Section 144B of the Act was not complied with by the revenue authorities and thereby, the order passed cannot be sustained in eye of law.

Summary

Issues:
Challenging Order of Assessment under Income Tax Act for A.Y. 2022-23 based on lack of personal hearing through video conferencing.

Detailed Analysis:

Issue 1: Lack of Personal Hearing
The petitioner, a partnership firm, challenged the Order of Assessment dated 29.03.2024 under Section 143 (3) read with 144B of the Income Tax Act 1961 for A.Y. 2022-23. The primary ground for challenge was the failure to respond to the request for personal hearing through video conferencing before passing the impugned order.

Facts and Arguments:
The petitioner filed its return of income for A.Y. 2022-23 and responded to various notices under Section 142 (1) of the Act by providing necessary information. However, when served with a show-cause notice dated 23.03.2024, the petitioner requested a personal hearing through video conferencing, which was not granted before the assessment order was passed on 29.03.2024.

Legal Analysis:
The Court noted that the failure to respond to the request for personal hearing through video conferencing was in breach of Section 144B (7) (vii) of the Act and violated principles of natural justice. Citing a previous decision, the Court emphasized the mandatory nature of granting personal hearing if requested during faceless assessment proceedings. The Court held that the impugned order cannot be sustained in the eye of the law due to non-compliance with the provisions of Section 144B.

Judgment:
The Court allowed the petition solely on the ground of the violation of the principle of natural justice. The Order of Assessment dated 29.03.2024 under Section 143 (3) read with 144B of the Act for A.Y. 2022-23 was quashed and set aside. The proceedings were remitted to the Revenue Authorities to grant the opportunity of a hearing through video conferencing to the assessee and pass a fresh order in accordance with the law. No costs were awarded, and the rule was made absolute.