The Madras High Court has ruled that a faceless hearing under Section 144B(6)(8) of the Income Tax Act, 1961, must be granted if requested. This court set aside the assessment order that had disregarded the request for a video conferencing hearing.
The Vee See Bee Trust, the income tax assessee challenged the income tax assessment order on the grounds that a personal hearing via video conferencing or other remote mode was not provided despite an express request via writ petition.
Get a Copy of the Handbook on Income Tax Act with Free E-Book Access Click here.
Following the filing of the return of income for the assessment year 2022-23, the petitioner received notices under Sections 142(1) and 143(2) of the Income Tax Act, 1961 which were duly replied to.
Subsequently, a show cause notice was issued on January 30, 2024, to which the petitioner responded on February 3, 2024, with a specific request for a personal hearing via video conferencing. However, the assessment order dated March 22, 2024, was issued without granting the requested hearing.
Get a Copy of the Handbook on Income Tax Act with Free E-Book Access Click here.
Mr.A.S.Sriraman, the assessee’s counsel argued that the absence of a personal hearing violated the mandatory provisions of Section 144B Income tax legislation.
On the other hand, the income tax department’s counsel, Mrs.S.Premalatha contended that the principles of natural justice were upheld since the petitioner had ample opportunity to respond to the notices and the show cause notice. She contended that the non provision of a personal hearing by video conferencing does not vitiate the order.
Get a Copy of the Handbook on Income Tax Act with Free E-Book Access Click here.
The court noted the previous case of Venkateshwara Jewellery, where it clearly interpreted the clause of clause (viii) of subsection (6) of Section 144B of the Income tax law. In that judgment, the bench noted that “As originally enacted, this provision used the word “may”.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.”
Justice Senthilkumar Ramamoorthy observed that the assessee provided evidence of a request for a personal hearing both in the reply dated February 3, 2024, to the show cause notice and by following the prescribed method. Considering these, the bench observed that the impugned order cannot be sustained due to the breach of the mandatory requirement of Section 144B.
The high court decided that the assessment order was invalid due to non-compliance with the faceless hearing requirement requested. The court set aside the assessment order and remanded the case, instructing the respondents to provide a reasonable opportunity for a personal hearing via video conferencing before issuing a new assessment order.
Get a Copy of the Handbook on Income Tax Act with Free E-Book Access Click here.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
