Faceless Personal Hearing is mandatory u/s 144B(6)(8) of Income Tax Act if Requested: Madras HC Interprets term ‘Shall’
Impugned assessment order was issued without providing a personal hearing through video-conference
In a recent ruling, the Madras High Court has ruled that the faceless personal hearing is mandatory under Section 144B(6)(8) of Income Tax Act, 1961 if requested. The court interpreted the ‘Shall’ in the section stating that ‘it is beyond doubt that the prescription is intended to be mandatory’ The petitioner, who had filed their income tax return for the assessment year 2022-2023...
In a recent ruling, the Madras High Court has ruled that the faceless personal hearing is mandatory under Section 144B(6)(8) of Income Tax Act, 1961 if requested. The court interpreted the ‘Shall’ in the section stating that ‘it is beyond doubt that the prescription is intended to be mandatory’
The petitioner, who had filed their income tax return for the assessment year 2022-2023 on 23.09.2022, found themselves in a challenging situation. Several notices were issued to the petitioner in connection with their return, to which they duly responded. However, amidst these proceedings, the impugned order was issued on 12.03.2024.
The counsel for the petitioner highlighted that a Show Cause Notice ( SCN ) was issued on 10.01.2024, but due to the Pongal period, an adjournment was sought and granted. Subsequently, on 29.01.2024, the petitioner replied to the notice and requested a video-conference hearing. It was argued that under Section 144B of the Income Tax Act, 1961, a video-conference hearing is mandatory, citing relevant legal precedents.
Dr. B. Ramaswamy, senior standing counsel representing the respondents, contended that ample opportunities were provided to the petitioner, as evidenced in the impugned order. While acknowledging the offer of a video-conference hearing in the show cause notice dated 10.01.2024, it was argued that the petitioner merely requested an adjournment without explicitly stating the need for a video-conference hearing.
A Single bench of Justice Senthilkumar Ramamoorthy after careful consideration, noted that “As originally enacted, this provision used the word “may”. By an amendment with retrospective effect, the word “may” was replaced with the word “shall”. Thus, it is beyond doubt that the prescription is intended to be mandatory.”
Further observed that, while senior standing counsel is correct in pointing out that an opportunity of hearing by video conference was offered under show cause notice dated 10.01.2024, the documents on record indicate that no video-conference hearing was provided after the petitioner's request for the same on 29.01.2024. As a result, the impugned assessment order was issued without providing a personal hearing through video-conference. In those circumstances, the impugned assessment order cannot be sustained.
Consequently, the assessment order dated 12.03.2024 was set aside, and the matter was remanded. The 1st respondent-The Assessment Unit was directed to provide a video-conference hearing to the petitioner and issue a fresh assessment order within three months from the date of receiving a copy of the court's order.
To Read the full text of the Order CLICK HERE
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