Personal hearing under faceless assessment cannot be denied; assessment, demand and penalty notices were set aside and remanded.

The faceless assessment framework requires the tax authority to consider a valid request for personal hearing where a variation is proposed in the draft assessment order. A request cannot be rejected merely because the show-cause notice does not prescribe a particular mode of hearing, and denial of the hearing breaches the statutory safeguard and natural justice. The assessment order, demand notice and penalty notice were set aside, and the matter was remanded for fresh adjudication after granting a video-conference hearing.

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Issues: Whether the assessment order and consequential notices were liable to be set aside for failure to grant the assessee an opportunity of personal hearing under the faceless assessment procedure.

Analysis: Section 144B(7)(vii) of the Income-tax Act, 1961 permits the assessee to request a personal hearing when a variation is proposed in the draft assessment order. The corresponding framework under Section 144B requires consideration of that request, and the absence of any prescribed mode in the show-cause notice could not justify denial of the opportunity. In the facts of the case, the request for hearing was made but was not entertained, which amounted to a breach of the statutory safeguard and the principles of natural justice.

Conclusion: The assessment order, demand notice, and penalty notice were set aside and the matter was remanded for fresh adjudication after granting a video-conference hearing to the petitioner.

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