Assessment order quashed for denying video conferencing hearing request under Section 144B faceless assessment proceedings

Gujarat HC quashed an assessment order under Section 143(3) read with 144B for violating natural justice principles. The assessee requested personal hearing through video conferencing which was not properly responded to before passing the assessment order. The court held that revenue authorities failed to comply with mandatory provisions of Section 144B(7)(vii)(2) requiring grant of personal hearing in faceless assessments. The request for video conferencing hearing was either not accommodated or intimation was provided inadequately, rendering the assessment order unsustainable in law.

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Issues:
Challenging Order of Assessment under Income Tax Act for A.Y. 2022-23 based on lack of personal hearing through video conferencing.

Detailed Analysis:

Issue 1: Lack of Personal Hearing
The petitioner, a partnership firm, challenged the Order of Assessment dated 29.03.2024 under Section 143 (3) read with 144B of the Income Tax Act 1961 for A.Y. 2022-23. The primary ground for challenge was the failure to respond to the request for personal hearing through video conferencing before passing the impugned order.

Facts and Arguments:
The petitioner filed its return of income for A.Y. 2022-23 and responded to various notices under Section 142 (1) of the Act by providing necessary information. However, when served with a show-cause notice dated 23.03.2024, the petitioner requested a personal hearing through video conferencing, which was not granted before the assessment order was passed on 29.03.2024.

Legal Analysis:
The Court noted that the failure to respond to the request for personal hearing through video conferencing was in breach of Section 144B (7) (vii) of the Act and violated principles of natural justice. Citing a previous decision, the Court emphasized the mandatory nature of granting personal hearing if requested during faceless assessment proceedings. The Court held that the impugned order cannot be sustained in the eye of the law due to non-compliance with the provisions of Section 144B.

Judgment:
The Court allowed the petition solely on the ground of the violation of the principle of natural justice. The Order of Assessment dated 29.03.2024 under Section 143 (3) read with 144B of the Act for A.Y. 2022-23 was quashed and set aside. The proceedings were remitted to the Revenue Authorities to grant the opportunity of a hearing through video conferencing to the assessee and pass a fresh order in accordance with the law. No costs were awarded, and the rule was made absolute.

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