Delhi HC directs Income Tax Dep to Allow Personal Hearings through National Faceless Assessment Center [Read Order]

The Delhi High Court directed the Income Tax Department to allow personal hearings through the national faceless assessment center. It was observed that since the request for video conferencing was made by the petitioner, the respondent must accede to the same in terms of Section 144B(6)(viii) of the Income Tax Act, 1961.

Global Vectra Helicorp Limited, the assessment order (the impugned assessment order) passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (the Act).  Additionally, the petitioner also impugns the demand raised under Section 156 of the Act pursuant to the impugned assessment order in respect of Assessment Year 2022-23 (the impugned Assessment Year). 

Mr. Kapoor, counsel appearing for the petitioner has confined the challenge in the present petition solely on the ground that the petitioner had not been provided sufficient opportunity to be heard. 

A show cause notice (SCN) was issued 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. 

Mr Kapoor submitted that despite the wide nature of allegations and issues raised in the SCN, the petitioner was called upon to submit a response by 17:24 hours on 09.03.2024.  He stated that the time provided was extremely short considering that there were two holidays after 05.03.2024.  He also referred to the Standard Operating Procedure (SOP) 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 protested against the limited time provided to respond to the SCN and submitted that if the Assessing Officer require any further information, the petitioner be provided additional time to furnish the same.  In addition, the petitioner also requested an opportunity to prepare the factual/legal submission and represent the matter through video conferencing / personal hearing.

Further stated that an attempt to upload such a request online was made on 11.03.2024 but the online portal did not accept the same. He submits once a request for a personal hearing is made, it is obligatory on the part of the Assessing Officer to provide the same.   

A plain reading of Section 144B(6)(viii) of the Act indicates that where a request for a 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 a video conferencing or video telephone. 

A division bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju held that since the request for video conferencing was made by the petitioner, the respondent must accede to the same in terms of Section 144B(6)(viii) of the Act.  It is well recognized that an opportunity to be heard is an important facet of natural justice. 

The court set aside the impugned assessment order and remanded the matter to the concerned Assessing Officer to consider afresh after affording a reasonable opportunity to be heard through video conferencing as is required in terms of Section 144B(6)(viii) of the Act. 

To Read the full text of the Order CLICK HERE

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