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TMI Blog2022 (5) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment Year 2016-2017, the petitioner filed his returns and received acknowledgement. While so, the petitioner received a notice under Section 148 of the Income Tax Act, 1961 (for short "the Act") from the 4th respondent stating that the income chargeable to tax for the Assessment Year 2016-2017 has escaped assessment within the meaning of Section 147 of the Act and therefore, he proposed to assess/re-assess the income or loss for the Assessment Year 2016-2017 and called upon the petitioner to submit the returns of relevant Assessment Year within thirty days. Upon receipt of such notice, the petitioner immediately uploaded the returns for the Assessment Year 2016-2017. Thereafter, the petitioner received another notice on 29.06.2021 issued under Section 143 (2) read with Section 147 of the Act, stating that there are certain clarifications, which are necessary for reopening the assessment and in view of the same, the petitioner was directed to submit his objections, if any, for reopening the assessment. The petitioner has submitted a reply to the notice dated 29.06.2021 stating that as no reasons are recorded for reopening the assessment in the said notice, he has no query ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 26.03.2022 much prior to the passing of Assessment Order. But, the said request for personal hearing is neither accepted by the 3rd respondent nor has been rejected and shown the same as "open" in the e-portal. Surprisingly, the 2nd respondent passed the impugned Assessment Order on 30.03.2022 assessing a tax liability of Rs.40,06,747/- and computed total amount payable along with interest under Section 234B of the Act as Rs.68,91,571/-, without providing any opportunity of personal hearing even though the same was specifically requested by the petitioner without closing the e-portal. Challenging the same, the present writ petition is filed. 4. Heard the learned counsel for the petitioner and Smt. M. Kiranmayee, learned standing counsel for the respondents. 5. Learned counsel for the petitioner, while reiterating the contentions, would submit that under the Faceless Assessment Scheme, 2019 communicated through F.No.Pr.CCIT/NeAC/SOP/2020-21, dated 23.11.2020 issued by the 2nd respondent, which was also extended to Faceless Assessment under Section 144B of the Act, personal hearing through Video Conference can be allowed for a period of thirty minutes, which can be extended by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Section 144B (7)(vii) of the Income Tax Act, 1961, and if so, whether it would amount to violation of principles of natural justice? 8. Before proceeding further, it would be appropriate to refer to Section 144B (7) (vii) and (ix) of the Act, which reads as under: "144B Faceless Assessment: (7) For the purposes of faceless assessment- (i) xxxxx (ii) xxxxx (iii) xxxxx (iv) xxxxx (v) xxxxx (vi) xxxxx (vii) in a case where a variation is proposed in the draft assessment order or final draft assessment order or revised draft assessment order, and an opportunity is provided to the assessee by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the such draft or final draft or revised draft assessment order, the assessee or his authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the income-tax authority in any unit; xxxxxxxx "STANDARD OPERATING PROCEDURE (SOP) FOR PERSONAL HEARING THROUGH VIDEO CONFERENCE UNDER THE FACELESS ASSESSMENT SCHEME, 2019 CIRCULAR F.NO.PR.CCIT/NeAC/SOP/2020-21, DATED 23-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring such request by showing the status/action of the request as "open". The said draft assessment order was passed even without closing the e-portal status. In support of his contention, the petitioner relied upon a judgment in Bharat Aluminium Company Ltd., v. Union of India (W.P.(C) No.14528 of 2021 and CM APPL.45702 of 2021, rendered by the High Court of Delhi at New Delhi), wherein the High Court of Delhi, in similar circumstances, while holding that an assessee has a vested right to personal hearing, if such a request is made, then the impugned final assessment order is liable to be set aside and is to be remitted the matter back to the Assessing Officer for passing a reasoned order after affording a reasonable opportunity of hearing. 11. In Sanjay Agarwal v. National Faceless Assessment Centre (2021 (6) TMI 336), the Delhi High Court held that as no standards, procedures and process in terms of sub-clause (h) of Section 144B (7) (xii) read with Section 144B (7) (viii) of the Act had been framed, it was incumbent upon Revenue to accord personal hearing to the petitioner. The Court emphasised that the aforesaid finding given by this court was due to Revenue counsel not produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose decision has civil consequences, the word "may" which denotes discretion should be construed to mean a command. ".......This Court is further of the view that a quasi judicial body must normally grant a personal hearing as no assessee or litigant should get a feeling that he never got an opportunity or was deprived of an opportunity to clarify the doubts of the assessing officer/decision maker. After all confidence and faith of the public in the justness of the decision making process which has serious civil consequences is very important and that too in an authority/forum that is the first point of contact between the assessee and the Income Tax Department. The identity of the assessing officer can be hidden/protected while granting personal hearing by either creating a blank screen or by decreasing the pixel/density/resolution. Consequently, this Court is of the view that the word "may" in Section 144B(viii) should be read as "must" or "shall" and requirement of giving an assessee a reasonable opportunity of personal hearing is mandatory. 14. In Swadeshi Cotton Mills v. Union of India 1981 AIR 818 (SC), the Supreme Court held that where there has been non-compliance w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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