Assessment Order Passed without Considering Request of Personal Hearing Through Video Conference: Madras HC Quashes Assessment Order [Read Order]

The Madras High Court has quashed the assessment order passed without considering the assessee's request for a personal hearing through video conference. The bench directed to provide personal hearing through video conferencing.

C Chellamuthu, the petitioner is an agriculturist and grower of Gloriosa Superba Species. In native language, it is called as Karthigai Flower. The petitioner is involving in the plantation of Gloriosa Superba Species for the past 25 years. Due to its medicinal value, the seeds of the plant are exported and thereby depending upon the international market value, the seeds are purchased by the local agents. Even though the local agent are willing to pay the amount by way of cash to avoid accounting, being a lawful citizen, the petitioner had insisted to get the income through proper bank transactions.

The respondent department accepted the said income as an agriculture income for similar persons. In fact for the financial year 2017-2018, the petitioner's agriculture income to the tune of Rs.3,14,81,092/- (Rupees Three Crores Fourteen Lakhs Eighty One Thousand and Ninety Two only) was accepted by the respondent revenue based on the explanations in respect of the same plantation. The petitioner is having more than 50 acres of lands and also got lands through lease from the various land owners to the extent of 90 acres and the petitioner is having certificates issued by the Village Administrative Officer including Tahsildar to the effect that the petitioner is cultivating the above extent of land with the Gloriosa Superba Species.

The Village Administrative Officers always issued certificates in Tamil language only. But the respondent department always insisted such certificates or documents are to be in either in English or Hindi. Even though the petitioner produced the same, the respondent failed to accept it due to language issue. For the financial year 2019-2020, the petitioner had sold 49,551.54 Kg of Gloriosa Superba Seeds which the petitioner had shown as income in the assessment year 2020-2021.

The respondent has issued show cause notice under Section 143(2) of the Income Tax Act, 1961 with a direction to submit the reply on or before 6.00 P.M. of 22.09.2022, which was intimated through SMS at about 08.15 P.M. on 20.09.2022. Thereby giving time only for 18 hours. Since the notice contains more than 30 pages, the petitioner requests the concerned officer to provide 3 days adjournment for filing a detailed reply.

The said request was submitted through the online portal on 21.09.2022. But the 4th respondent issued final notice dated 22.09.2022 under Section 142(1) of the Income Tax Act, 1961 with a direction to produce documents and explanations on or before 6.00 P.M. on 22.09.2022. In response to the same, the petitioner submitted the explanation dated 22.09.2022 before the cut-off time. The petitioner had also enclosed the documents in support of the claim. In fact, in the notice dated 22.09.2022, the total assessed income was arrived as Rs.8,73,83,310/- (Rupees Eight CroresSeventy Three Lakhs Eighty Three Thousand Three Hundred and Ten only) and agricultural income was arrived as Rs.25,16,750/- (Rupees Twenty Five Lakhs Sixteen Thousand Seven Hundred and Fifty only).

On the other hand, the respondent had taken a stand as if the petitioner had not given a proper response to the notices which is contrary to facts. Further, the petitioner sought a video conference hearing on 22.09.2022 for valid reasons, which request is available in the portal of the respondent department. Without considering the said request, the respondent passed the present impugned order dated 26.09.2022 by invoking under Section 143(3) read with 144(b) of the Income Tax Act, 1971.

The petitioner's request for a personal hearing through video conference was not at all considered which is a vital opportunity. The respondents have filed a counter stating that the petitioner has an effective, alternative statutory appellate remedy to file a statutory appeal before the Commission. The petitioner's case was selected for limited scrutiny under CASS to verify the large agricultural income claimed by the assessee during the relevant assessment year. Notice under section 143(2) was issued

Mr. R. Murali, for Mr.B.Ponnu Pandi, the Counsel appeared for the petitioner, and Mr. N. Dilip Kumar, the Senior Standing Counsel appeared for the respondents.

A single bench of Justice S Srimathy observed that since it was a high-pitched assessment, the petitioner had sought a video conference hearing and it was not considered by the respondent to amount to a clear violation of the principles of natural justice.

The Court quashed the impugned assessment order and directed to granting of a video conference hearing to the petitioner.

To Read the full text of the Order CLICK HERE

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