Court Invalidates Assessment Order for Lack of Hearing, Emphasizes Duty to Grant Personal Hearings

The Court set aside the Assessment Order dated 09th June 2021 for Assessment Year 2018-19, issued without affording a personal hearing to the petitioner, in violation of natural justice and Section 144B of the Act. The matter was remanded to the Assessing Officer with directions to grant a hearing via Video Conferencing and pass a reasoned order. The Court emphasized the obligation to consider requests for personal hearings under Section 144B (7) and the need for standards in dealing with such requests. The impugned assessment order, demand notice, and related proceedings were quashed.

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Issues:
Challenge to Assessment Order dated 09th June 2021 under Section 143(3) read with Section 144B for Assessment Year 2018-19 without personal hearing. Interpretation of Section 144B (7) regarding the right to personal hearing for the assessee.

Analysis:
The petitioner filed a writ petition challenging the Assessment Order dated 09th June 2021 passed by the Respondents under Section 143(3) read with Section 144B for Assessment Year 2018-19, along with the notice of demand issued under Section 156 and all related proceedings. The petitioner contended that the order was without jurisdiction, arbitrary, and illegal as it was passed without affording a personal hearing despite a specific request, violating principles of natural justice and Section 144B of the Act. The petitioner highlighted that the response to the draft assessment order was not considered for a revised draft order as required by law.

The Respondents argued that the provision in Section 144B (7) uses the term 'may' instead of 'shall,' indicating that there is no absolute right for the assessee to claim a personal hearing. However, the Court noted that Section 144B (7) provides for an opportunity of personal hearing upon request by the assessee. Referring to a previous judgment, the Court emphasized that the revenue was obligated to consider requests for personal hearings and frame standards for dealing with such requests, which had not been done in this case.

The Court held that the absence of a granted hearing before passing the assessment order amounted to a violation of natural justice and the mandatory procedure under the Faceless Assessment Scheme and Section 144B of the Act. Consequently, the impugned assessment order, demand notice, and related proceedings for the assessment year 2018-19 were set aside. The matter was remanded back to the Assessing Officer with directions to grant a hearing to the petitioner via Video Conferencing and pass a reasoned order in accordance with the law. The Court disposed of the writ petition and directed the order to be uploaded on the website and forwarded to the counsel through email.

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