Assessment Order Set Aside for Violation of Natural Justice; Fresh Hearing via Video Conferencing Ordered.

The Cal HC allowed the writ application, setting aside the assessment order and penalty notice against the petitioner, a government-aided college. The Court found a violation of natural justice due to the lack of a personal hearing. The matter was remanded to the assessing officer for a fresh assessment, ensuring a hearing via video conferencing. No costs were awarded.

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Issues involved:
The issues involved in this case are challenging the assessment order under Section 147 of the Income Tax Act 1961, notice of penalty under Section 274, and discrepancies in the assessment proceedings.

Assessment Order Challenge:
The petitioner, a West Bengal Government aided college, challenged the assessment order dated 18.03.2023, which treated an amount as cash credit under Section 68 of the Act. The petitioner contended that the assessment was made without providing an opportunity of hearing despite submitting necessary documents and evidence. The petitioner repeatedly requested for a personal hearing through video conferencing, but the authorities did not consider these requests. The petitioner argued that the assessment order violated principles of natural justice and was in contravention of Section 144B of the Act and SoP under Faceless Assessment provisions.

Penalty Imposition:
A notice of demand under Section 156 of the Act was issued demanding an amount from the petitioner. Additionally, a notice for penalty under Section 274 read with Section 271(1)(c) and Section 271F was imposed for alleged concealment of income and failure to furnish a return of income. The petitioner contended that non-filing of the income tax return should not be a ground for denying relief under Section 10(23C) of the Act. The petitioner argued that the assessment order and penalty imposition were not in compliance with the procedural requirements under the Act.

Court's Decision:
After hearing arguments from both parties, the Court found that the assessment order was prejudicial to the petitioner's interest as the opportunity for a personal hearing was not availed due to technical difficulties. The Court noted that no clear evidence was provided by the respondent authority to show that the petitioner's request for a personal hearing through video conferencing was considered. The Court referred to administrative instructions emphasizing the duty of officers to assist taxpayers in claiming reliefs and refunds. Consequently, the Court set aside the assessment order and the notice of penalty, remanding the matter to the assessing officer for a fresh assessment order in accordance with the law, providing the petitioner with an opportunity of hearing through video conferencing by providing a proper link.

Conclusion:
The High Court of Calcutta allowed the writ application, directing the concerned assessing officer to conduct a fresh assessment order after providing the petitioner with a proper opportunity of hearing through video conferencing. The impugned assessment order and notice of penalty were set aside, with no order as to costs.

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