Judgment emphasizes fair personal hearings in assessment proceedings under Income Tax Act

The court set aside the assessment order and notice of demand, directing a personal hearing for the petitioner via video conferencing. The court emphasized the importance of adhering to principles of natural justice and providing a fair opportunity for personal hearings in assessment proceedings under the Income Tax Act. The judgment underscored the obligation of revenue authorities to consider requests for personal hearings and established standards for dealing with such requests.

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Issues involved:
Challenge to assessment order and notice of demand, violation of principles of natural justice, maintainability of writ petition, interpretation of Section 144B(7) of the Income Tax Act, 1961.

Analysis:
The petitioner filed a writ petition challenging the assessment order and notice of demand dated 30th April 2021, seeking directions to restrain the respondent from giving effect to the impugned orders. The petitioner argued that the assessment order was passed without proper appreciation of facts and without affording an opportunity of hearing, violating principles of natural justice and the provisions of the Act. The respondent contended that the writ petition was not maintainable as the petitioner had already filed an appeal, which was considered an alternative effective remedy.

Upon hearing the parties, the court examined Section 144B(7) of the Income Tax Act, which provides for a personal hearing in cases where a variation is proposed in the draft assessment order. The court referred to a previous division bench judgment in Sanjay Aggarwal v. National Faceless Assessment Centre Delhi, which emphasized the obligation of the revenue to consider requests for personal hearings and the absence of established standards, procedures, and processes for dealing with such requests. The court noted that failure to accord a personal hearing warranted setting aside the impugned orders.

In another case, Gurgaon Realtech Limited vs. National Faceless Assessment Centre Delhi, a coordinate bench held that filing an appeal to prevent crossing the limitation period did not hinder the petitioner from proceeding with the writ petition. In light of these precedents and the legal provisions, the court set aside the assessment order and notice of demand dated 30th April 2021, remanding the matter back to the Assessing Officer for granting a personal hearing to the petitioner via video conferencing and passing a reasoned order in accordance with the law.

Therefore, the court disposed of the writ petition with the direction to upload the order on the website and forward a copy to the learned counsel through email. The judgment highlighted the importance of adhering to principles of natural justice and providing a fair opportunity for personal hearings in assessment proceedings under the Income Tax Act.

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