Court overturns Assessment Order for 2018-2019 due to lack of personal hearing via Video Conferencing

The court set aside the Assessment Order, Computation Sheet, and Demand Notice for Assessment Year 2018-2019 under the Income Tax Act, 1961, as the petitioner was denied a personal hearing through Video Conferencing, contrary to the law. The court emphasized that a personal hearing is mandatory upon request, as per Section 144B and the Circular on the Standard Operating Procedure. The respondent Authority was directed to provide the petitioner with a personal hearing through Video Conferencing in accordance with the Circular and proceed accordingly.

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Issues:
Challenge to Assessment Order, Computation Sheet, and Demand Notice for Assessment Year 2018-2019 under Income Tax Act, 1961 - Denial of opportunity for personal hearing through Video Conferencing.

Analysis:
The petitioner sought to quash the Assessment Order, Computation Sheet, and Demand Notice dated 09.09.2021 for the Assessment Year 2018-2019, contending that the show cause notice allowed for a personal hearing through Video Conferencing upon request. The petitioner's request for a personal hearing was not honored, and the Assessment Order was passed without providing the opportunity for a personal hearing.

The petitioner argued that the denial of a personal hearing was contrary to law and established procedures, citing Section 144B(7)(vii & viii) of the Income Tax Act and a Circular providing for personal hearings through Video Conferencing under the Faceless Assessment Scheme, 2019. Reference was made to judgments by the High Court of Delhi and the High Court of Bombay, emphasizing that a personal hearing is mandatory when requested.

The Revenue contended that justifying circumstances are necessary for granting a personal hearing under the Standard Operating Procedure. However, the court noted that Section 144B of the Income Tax Act mandates granting an opportunity for a personal hearing upon request, as clarified by the Circular on the Standard Operating Procedure for personal hearings through Video Conferencing.

The court observed that the use of the word 'may' in Section 144B should be construed as 'shall' if the Circular's requirements are met. Consequently, the court set aside the Assessment Order, Computation Sheet, and Demand Notice, directing the respondent Authority to provide the petitioner with a personal hearing through Video Conferencing in accordance with the Circular and to proceed with the matter accordingly.

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