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TMI Blog2022 (4) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... e trusties and the beneficiaries are individuals and citizens of India. It is a public trust carrying on charitable activities under the Bombay Public Trust Act, 1950 registered on 19.01.2002. 2.2. The petitioner filed return of income for the assessment year 2018-19 on 26.10.2018 offering Nil income. The same was offered on 10.05.2019 under Section 143(1) of the Act. The case of the petitioner was selected under CASS for Complete Scrutiny to verify some issues. Various correspondences took place between the parties for the purpose of framing of the assessment and the same eventually resulted into the issuance of show cause notice on 21.04.2021 reproducing the draft assessment order therein. 2.3. In response to the show cause notice, the petitioner uploaded reply on 26.04.2021 and also requested for personal hearing through video conferencing. The proposed time on the part of the petitioner was from 4:00 pm. to 6:00 pm. on any working day. In response to this, on 25.05.2021 a show cause notice was issued which said that due to technical error, the request of personal hearing through video conference could not be processed. The respondent acknowledged the reply and the request of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference got abruptly terminated. The petitioner requested to provide personal hearing through video conference to complete the submissions vide letter dated 14.09.2021. 2.7. It is averred by the petitioner that it was shocking not to receive any further communication regarding the video conference and instead to receive the impugned assessment order dated 17.09.2021 without availing any opportunity of personal hearing through video conference and in the said assessment order, it has been mentioned surprisingly that video conference was conducted although it was not properly conducted, as emphatically averred and the petitioner was not allowed to make the fullest submissions. There is no reference of the request of second personal hearing due to sudden disconnection. 2.8. The demand notice to pay Rs. 6,33,50,88,520/- within 30 days of the service of notice as well as the notice of penalty under Section 274 read with Section 270(A) dated 17.09.2021 had been issued. The said assessment order issued under Section 143(3) read with Section 144(B) is under challenge. This is alleged to be an order without jurisdiction and violative of principles of natural justice and contrary to law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that the so called opportunity was of namesake and at every stage, the faceless assessment was in fact ear-less assessment. 5. We have since noticed the reiterative submission of technical glitch which resulted into abrupt disconnection and reiterative emphasis on the same, we passed the following order on 12.10.2021 which deserves reproduction:- "We have heard today learned counsels on both the sides. During the course of hearing an issue that had cropped up is in relation to the making available the copy of the Video Conferencing which had been recorded on the date on which the hearing had taken place. We are supplied with the FAQs for seeking VC and seeking VC adjournment where one of the questions is as follows : "Would department provide the copy of the recording of video conferencing ? If yes, how to obtain the same ? Ans Yes, after video conferencing is successfully conducted. 'VC' recording' hyperlink will be displayed under the "VC link details" column. Under the 'VC recording' hyperlink, the URL details from which the recording can be downloaded will be mentioned. The status and VC recording noting made by the Income Tax Authority will be available under the "ITD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ass the following order on 14.10.2021:- "1. Pursuant to the order passed by this Court on 12.10.2021, both the sides have been heard today. 2. Learned Senior Advocate Mr. Bhatt has urged that necessary instructions which have been sought by him have not come. The request has been made to the National Faceless Centre. He is expecting the instructions in relation to the availability of the Video Conference recording of dated 14.09.2021 by next week. The time therefore till 25.10.2021 is afforded for the same to be received. 3. In the meantime, as the request has come from the petitioner that notice of penalty under Section 274 read with Section 278(A) dated 17.09.2021 requires the payment to be done within 30 days, and the time is expiring on 17.10.2021, according to the assessee, there will be serious consequences which will be difficult for them to meet with. The request, therefore, is to stay the operation of the demand made by addition in the assessment order as well as the demand of notice by virtue of the notice of penalty under Section 274 and 278(A). 4. According to learned senior advocate Mr. Bhatt, as the addition is huge and also the penalty amount runs into crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stay of demand of addition made in the assessment order impugned and the demand of penalty till the next adjourned date. 11. Other and further order with regard to the additional security for protecting the interest of the Revenue shall be passed on 25.10.2021 after hearing both the sides." 5.2. On completion of pleadings, this Court has heard at length learned Senior Advocate Mr. Saurabh Soparkar assisted by learned advocate Mr. B.S. Soparkar for the petitioner and learned Senior Advocate Mr. Manish Bhatt assisted by learned advocate Mr. Karan Sanghani appearing for the respondents and respective sides have strenuously attempted to bring home their respective stands. 5.3. Learned Senior Advocate Mr. Soparkar in support of his detailed submissions along the line of pleading has relied on the following authorities, which are essentially addressing the merits:- (i) Saurashtra Education Foundation vs. Commissioner of Income-Tax [[2004] 141 Taxman 26 (Gujarat)] (ii) Assistant Commissioner of Income-Tax vs. Surat City Gymkhana [[2008] 170 Taxman 612 (SC)] (iii) Hiralal Bhagwati vs. Commissioner of Income-tax [[2000] 246 ITR 188] 5.4. Learned Senior Advocate Mr. Bhatt has ferv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice was received on 25.05.2021 in response to the said request on 21.04.2021. This communication admits that due to technical glitch, the request for video conference could not be provided. It is further directed that for availing the video conference clicking on the hyperlink under the column video conference through login at e-filing portal on or before 28.05.2021 should be done so that the personal hearing through video conference can be provided. 8.1. It is the grievance of the petitioner that it could not find any hyperlink on the Income-Tax Portal which could be activated. It is also averred in the petition itself that through various replies made on 27.05.2021, 23.08.2021, 01.09.2021, 04.09.2021, 07.09.2021 and 09.09.2021 this aspects have brought to the notice of the department. It is only on 13.09.2021 the letter was received intimating the schedule of personal hearing on 14.09.2021 at 12:09 pm. It was since a day prior to the scheduled date of video conference, the petitioner was not prepared to conduct the hearing through video conference which is understandable and more so, as he was being represented by an authorized representative being the senior a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of sale consideration for sale of shares to Arrow Electronics India Pvt. Ltd., (ii) the assessee trust is carrying on charitable activity or not. 40:52 to 45:06 Audio was silent though video was on and Shri Saurabh Soparkar was continuously speaking and that too on the first issue only. No submission on second issue was allowed to be made. 45:06 Video was terminated abruptly though Learned Senior Advocate for the petitioner was speaking. 9. We have watched the video as provided to us pursuant to the directions issued by us as mentioned herein above and it is quite obvious that the learned senior advocate representing the petitioner went on asking and also waited, however, from the other side, there was no reply. It is only after about 22:00 minutes in the chat box, the reply was received that the authorized person was audible and therefore, he could speak. A request was also made whether the submissions could be uploaded to which the answer is in affirmative however, there was no facility for sharing the screens of submissions. It is also quite clear that from 26:00 minutes to 40:00 minutes hearing continued and then from 40:52 minutes to 45:06 minutes the audio was sil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances in which the personal hearing through video conference is allowed in the faceless assessment scheme. Where any modification is proposed in the draft assessment order issued by the AU and the Assessee or the authorized representative in her/his written response disputes the facts underlying the proposed modification and makes a request for a personal hearing, the CCIT ReAC may allow personal hearing through video conference after considering the facts and circumstances where the assessee can submit written submissions in response to the draft assessment order. The video conference will ordinarily be of 30 minutes duration. It may be extended on the request of the assessee or the authorized representative. The assessee also may furnish documents / evidences to substantiate the point raised in the video conference during the session or within reasonable time allowed by the AU after considering the facts and circumstances of the case. 11. As can be noticed from the instant case, here also, the modification is proposed in the draft assessment order and the assessee had requested for personal hearing. It is to be noted that as averred in the petition, in a response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions or present his case before the income-tax authority in any unit." 6. Not only is the Assessee given a right to make a request for personal hearing, but it is mandatory for the authority to provide for such personal hearing. 7. With there being no dispute that the Petitioner did make such a request, it was incumbent on the Opposite Parties to have given it an opportunity of being heard. The reply filed by the Opposite Parties only deals with the merits of the assessment itself and does not dispute that the above mandatory procedural requirement was not complied with. 8. In that view of the matter, on this short ground, the impugned assessment order is set aside and the matter is remanded to the assessing officer, i.e. National e-Assessment Centre, for compliance of the mandatory requirement of Section 144 B (7) (vii) of the Act and provide a personal hearing to the Petitioner as requested by it on a date and time to be conveyed to it at least one week in advance. It is made clear that the hearing can be in either physical or virtual mode. A fresh assessment order shall be passed thereafter within three months. If aggrieved by such order, it would be open to the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner or the Principal Director General, in charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre, Regional Faceless Assessment Centres and the unit set up, in an automated and mechanised environment, including format, mode, procedure and processes in respect of the following, namely:-- xxx xxx xxx (h) circumstances in which personal hearing referred to clause (viii) shall be approved; xxx xxx xxx" [Emphasis is ours] 11.4. A careful perusal of clause (vii) of Section 144B (7) would show that liberty has been given to the assessee, if his/her income is varied, to seek a personal hearing in the matter. Therefore, the usage of the word 'may', to our minds, cannot absolve the respondent/revenue from the obligation cast upon it, to consider the request made for grant of personal hearing. Besides this, under sub-clause (h) of Section 144B (7)(xii) read with Section 144B Signature Not Verified By:VIPIN KUMAR RAI Signing Date:09.06.2021 00:54:32 (7) (viii), the respondent/revenue has been given the power to fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and not limited to the video conference. 13.2. From what is noticed from the VC conducted in the instant case and as CBDT circular mandates a request for VC hearing and personal hearing is not under contemplation nor requested for by the petitioner. However, once such opportunity of hearing through VC is available, it cannot be for namesake nor can that tire assessee or the authorized representative and must be given in its true spirit. There shall need to be response for the person to be sure that he/she is not talking to the screen and resultant outcome also must bear its testimony. 14. In case of Hiralal Bhagwati vs. Commissioner of Income-tax [[2000] 246 ITR 188], the trust in question was registered as public charitable trust and was registered with the office of Charity Commission under the provisions contained under the Bombay Public Trust Act. The object of the trust was to help by giving financial aid to the employees of the Gujarat Law Society, in cases of death of an employee during his/her services, illness or permanent disability which incapacitates the employee to discharge his/her duties. The trust was denied exemption under Section 80(G) of the Act on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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