2022 (11) TMI 780

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.... the assessment order primarily on the ground of not being granted a fair opportunity of hearing in the course of the assessment being made. The assessment period is the assessment year 2021. 3. Learned counsel for the petitioner referring to Annexure P/9 dated 26.09.2022 submits that he had made a request for a personal hearing through Video Conferencing to the concerned assessment authority. The said application was duly received by the Department also. However, inspite of the application having been duly received by the Department, the authority concerned proceeded with the assessment proceeding and have passed the impugned order without giving a fair opportunity of personal hearing. The counsel for the petitioner referred to Section 144B(6)(vii) & (viii) of the Act of 1961 and submits that it was mandatorily required by the assessing authority for giving an opportunity of hearing upon an application with a request for hearing when made. The counsel for the petitioner further relied upon 2022(6)TMI 551 (Bombay High Court), 2022 (4) TMI 908 (Gujrat High Court), 2022(3)TMI 622 (Delhi High Court) in support of his contention. He also relies upon the Standard Operating Procedure ....

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....g has been received, the income-tax authority of relevant unit shall allow such hearing, through National Faceless Assessment Centre, which shall be conducted exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board;" 7. The plain reading of the aforesaid provision, particularly the provision of Clause-viii of Sub-clause 6 of Section 144B, it mandates that upon an application/request being made for personal hearing, the income tax authority shall allow the said application by arranging for a Video Conferencing. In the instant case it stands established that the request from the petitioner was made before the authorities within time and there is no reason assigned as to why that application was not entertained or for that matter why the said application was rejected, if at all. 8. The Bombay High Court in case of Premlata Ramakant Fatehpuria Vs. Principal Commissioner of Income Tax-1 Nagpur in Writ Petition No.359 of 2022, 2022(6)TMI 551 (Bombay High Court) in paragrap....

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....g so as to make his oral submissions or present his case before the income-tax authority in any unit." 6. Not only is the Assessee given a right to make a request for personal hearing, but it is mandatory for the authority to provide for such personal hearing. 7. With there being no dispute that the Petitioner did make such a request, it was incumbent on the Opposite Parties to have given it an opportunity of being heard. The reply filed by the Opposite Parties only deals with the merits of the assessment itself and does not dispute that the above mandatory procedural requirement was not complied with. 8. In that view of the matter, on this short ground, the impugned assessment order is set aside and the matter is remanded to the assessing officer, i.e. National e-Assessment Centre, for compliance of the mandatory requirement of Section 144 B (7) (vii) of the Act and provide a personal hearing to the Petitioner as requested by it on a date and time to be conveyed to it at least one week in advance. It is made clear that the hearing can be in either physical or virtual mode. A fresh assessment order shall be passed thereafter within three months. If aggrie....

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....ered by the circumstances referred to in sub-clause (h) of clause (xii); xxx xxx xxx (xii) the Principal Chief Commissioner or the Principal Director General, in charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre, Regional Faceless Assessment Centres and the unit set up, in an automated and mechanised environment, including format, mode, procedure and processes in respect of the following, namely:-- xxx xxx xxx (h) circumstances in which personal hearing referred to clause (viii) shall be approved; xxx xxx xxx [Emphasis is ours] 11.4. A careful perusal of clause (vii) of Section 144B (7) would show that liberty has been given to the assessee, if his/her income is varied, to seek a personal hearing in the matter. Therefore, the usage of the word 'may', to our minds, cannot absolve the respondent/revenue from the obligation cast upon it, to consider the request made for grant of personal hearing. Besides this, under sub-clause (h) of Section 144B (7)(xii) read with Section 144B ....

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....ix), which is not only in violation of principles of natural justice, but also in violation of the mandatory provisions as contemplated under Section 144B (7) (vii) (ix) of the Act. Hence, the impugned assessment order is not sustainable in law and the same is liable to be set aside. Accordingly, the writ petition is allowed setting aside the Assessment Order dated 29.09.2021 passed by the 2nd respondent and the matter is remitted back to the Assessing Officer for a fresh assessment after duly affording a reasonable opportunity of hearing the petitioner and then pass appropriate orders in accordance with law as expeditiously as possible. As a sequel thereto, miscellaneous petitions, if any, shall stand closed." 12.The Delhi High court in Bharat Aluminium Company Ltd. Vs. Union of India & Others, WPCNo. 14528/2021, decided on 14.01.2022, 2022(1)TMI658- Delhi High Court, in paragraphs 14 to 17, 20 and 22 has held as under: "14. Last but not the least, this Court finds that no opportunity of personal hearing was given despite a specific request made by the petitioner. 15. This Court is of the opinion that a faceless assessment scheme does not mea....

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...., as referred to in clause (vii) of sub section 7 of section 144B, would have to be taken into account and it would not be proper, looking at the prescribed procedure with strong undercurrent to have hearing on a request after notice, to say that petitioner would have opportunity pursuant to section 144C in the present matter, would intercept operation of the scheme contained under section 144B. IT IS SETTLED LAW THAT WHERE EXERCISE OF A POWER RESULTS IN CIVIL CONSEQUENCES TO CITIZENS, UNLESS THE STATUTE SPECIFICALLY RULES OUT THE APPLICATION OF NATURAL JUSTICE, THE RULES OF NATURAL JUSTICE WOULD APPLY. 17. This Court is further of the view that where an action entails civil consequences, like in the present matter, observance of natural justice would be warranted and unless the law specifically excludes the application of natural justice, it should be taken as implanted into the scheme. The settled position in law is that where exercise of a power results in civil consequences to citizens, unless the statute specifically rules out the application of natural justice, the rules of natural justice would apply, including the right to personal hearing. Denial of such ....