Delhi HC sets aside faceless assessment order for denying mandatory video conferencing hearing under Section 144B(6)(viii)

Delhi HC set aside a faceless assessment order under Section 143(3) read with Section 144B for violating natural justice principles. The assessee requested a personal hearing through video conferencing as provided under Section 144B(6)(viii), but the Income Tax Authority failed to provide this opportunity. The court held that when a request for video conferencing is made, it is mandatory for authorities to allow hearing through the National Faceless Assessment Centre via video conferencing. The matter was remanded to the Assessing Officer to reconsider after affording proper hearing opportunity through video conferencing as statutorily required.

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Issues involved:
The judgment involves challenging an assessment order passed u/s 143(3) read with Section 144B of the Income Tax Act, 1961, and the demand raised u/s 156 of the Act for the Assessment Year 2022-23 due to alleged lack of opportunity to be heard.

Impugned Assessment Order and Lack of Opportunity:
The petitioner challenged the assessment order, claiming insufficient opportunity to be heard. The petitioner responded to a show cause notice within the short timeline provided, requesting additional time and a chance for a personal hearing. The petitioner's request for a personal hearing was attempted to be uploaded online but was unsuccessful. The respondent contended that the request for a personal hearing needed to be made online, and failure to do so correctly meant the Assessing Officer was not obligated to provide a hearing. However, the respondent could not cite any provision supporting this argument.

Legal Provisions and Principles of Natural Justice:
Sections 144B (6)(vii) and 144B (6)(viii) of the Act were referenced, emphasizing the requirement for a personal hearing upon request. The judgment highlighted the importance of natural justice and the need for a reasonable opportunity to be heard before passing an adverse order. Referring to a Supreme Court case, it was noted that even when a statute does not explicitly provide for a hearing, it is considered a principle of natural justice. The court found merit in the petitioner's argument that the assessment order violated the principles of natural justice and statutory requirements for affording the assessee an opportunity to be heard.

Decision and Remand:
The court set aside the impugned assessment order and remanded the matter to the Assessing Officer for reconsideration after providing a reasonable opportunity for a hearing through video conferencing, as mandated by Section 144B (6)(viii) of the Act. The petitioner was also allowed to submit written submissions within a week from the judgment date. The petition was disposed of accordingly, along with all pending applications.

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