Income Tax Dept. To Allow Personal Hearing Through National Faceless Assessment Centre On Assessee's Request: Delhi High Court

The Delhi High Court has held that the income tax department should allow personal hearings through the national faceless assessment centre on the assessee's request.

The bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju has observed that, as per Section 144B(6)(viii) of the Income Tax Act, 1961, where a request for personal hearing is received, the Income Tax Authority of the relevant unit shall allow a hearing through the National Faceless Assessment Centre, which shall be effected exclusively through video conferencing or video telephone. Since the request for video conferencing was made by the petitioner, it is mandatory for the respondent department to accede to the same in terms of Section 144B(6)(viii). It is well recognized that an opportunity to be heard is an important facet of natural justice. Thus, before passing an adverse order, a reasonable opportunity of hearing is required to be afforded to the petitioner.

The petitioner/assessee has filed the petition challenging the assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961. The petitioner has challenged the demand raised under Section 156 pursuant to the assessment order in respect of Assessment Year 2022–23.

The petitioner was issued a show cause notice proposing certain additions to the income returned and calling upon the petitioner to respond to the same. The SCN spans over ten pages and raises various grounds.

The petitioner contended that despite the wide nature of allegations and issues raised in the SCN, the petitioner was called upon to submit a response. The time provided was extremely short considering that there were two holidays after March 5, 2024. The petitioner referred to the Standard Operating Procedure dated August 3, 2022, framed by the National Faceless Assessment Centre, Delhi, which requires that at least seven days be provided to the assessee for responding to the Show Cause Notice.

The petitioner argued that, notwithstanding the limited time available for filing the response, the petitioner did submit a response within the stipulated time. The petitioner protested against the limited time provided to respond to the SCN and submitted that if the Assessing Officer required any further information, the petitioner would be provided additional time to furnish the same. In addition, the petitioner also requested an opportunity to prepare the factual or legal submission and represent the matter through video conferencing or personal hearing. An attempt to upload such a request online was made on March 11, 2024, but the online portal did not accept it. Once a request for a personal hearing is made, it is obligatory on the part of the assessing officer to provide the same.

The department contended that since the request for a personal hearing was required to be made online, The fact that an attempt was made on March 11, 2024, indicates that the petitioner was aware of the procedure, and despite the same, no request was made by the petitioner through the online mode. If the request is not made in the manner provided, the assessing officer cannot be faulted for not acceding to such a request.

The court held that the assessment order falls foul of the principles of natural justice and the statutory requirement of affording the assessee an opportunity to be heard.

Counsel For Petitioner: Salil Kapoor

Counsel For Respondent: Siddhartha Sinha

Case Title: Global Vectra Helicorp Limited Versus Assessment Unit, National Faceless Assessment Centre, Delhi

Citation: 2024 LiveLaw (Del) 554

Case No.: W.P.(C) 5912/2024, CM Nos.24420/2024 & CM No.24421/2024

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