Income Tax Dept Admits Bonafide Error in Denying Requested Video Conference Hearing: Bombay HC remands for fresh Assessment [Read Order]

The Bombay High Court has set aside an assessment order, after the Income Tax Department admitted it had committed a bonafide error by failing to grant the taxpayer a hearing through video conference, as requested. It remanded the matter for fresh assessment.

The petitioner, Dev Marketing, had challenged the assessment under Section 143(3) read with Section 144B of the Income Tax Act, 1961, arguing that the order violated the principles of natural justice because no personal hearing was granted despite repeated requests.

The Assistant Commissioner of Income Tax, submitted an affidavit acknowledging the error. He detailed the timeline of notices issued under Sections 142(1) and 143(2), and confirmed that although the assessee had requested a video conference hearing to explain technical issues, the assessment was finalized without granting this opportunity.

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Mr. Singh asserted in his affidavit that this omission was a bonafide, unintentional mistake and, given the non-adversarial nature of income tax proceedings, it was the department’s duty to correct such errors in the interest of fairness to both the revenue and the taxpayer.

The court noted the stance of the department. Justices Jitendra Jain and M.S. Sonak set aside the impugned order and remanded the matter back to the Assessing Officer.

The court directed the officer to conduct the assessment afresh, ensuring the assessee is given a personal hearing and a draft assessment order before finalization. This reassessment process must be completed within three months from the date of uploading the court’s order.

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The petitioner’s counsel agreed not to raise any limitation objections, provided the reassessment is completed within the specified timeframe. The Court concluded by making the rule absolute without any costs and left all other contentions between the parties open.

Additionally, the court noted a typographical correction in the affidavit regarding the omission of the word “not” in one paragraph, reading the correction into the record due to its obvious nature.

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To Read the full text of the Order CLICK HERE

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