The Mumbai bench of the Income tax Appellate Tribunal (ITAT) comprising Pramod Kumar, Vice President and, Aby T Varkey Judicial Member, while remanding a matter back to the National Faceless Appeal Centre (NFAC) has held that the denial of assessee’s specific request to attend the personal hearing through video conference is violation of the newly inserted Income Tax Rules.
The assessee, M/s Bank of India was aggrieved by the order passed by the National Faceless Appeals Centre, in the matter of assessment under section 143(3) of the Income Tax Act, 1961, but without granting an opportunity for personal hearing, though specifically prayed for, through the video conferencing.
The department, on the other hand, contended that the Faceless Appeals Scheme 2020, the granting of opportunity through video conferencing was not mandatory, and it was at the sole discretion of the authority concerned to grant or not to grant the video conferencing hearing.
The division bench observed that once a request is made for the hearing through video conferencing, in the course of the faceless appellate proceedings, in our considered view, it was incumbent upon the ChiefCommissioner or the Director-General concerned to either grant the opportunity, or, if so deemed fit, decline the same for the reasons to be set out, and there cannot be any justification for not making a decision on such a request.
“Undoubtedly, the expression used in rule 13(2) is that the Chief Commissioner of the Director-General in charge of the related Regional Faceless Appeals Centre “may” approve such a request for personal hearing, it is only elementary that whenever law confers any powers in any public authority, such a public authority has the corresponding duty to exercise these powers when circumstances so justify or warrant,” the Tribunal said.
“Taking the sting out of criticism of the then faceless appeals procedures, and as a part of the ongoing and pragmatic reforms- which are now truly a hallmark of the contemporary tax policies anyway, the grant of personal hearing through video conferencing is now virtually on-demand,” the Tribunal added.
Remitting the matter back to the files of NFAC, the Tribunal concluded that “As a result of these provisions in the new rules, the opportunity of a personal hearing, through video conferencing, is to be granted in all such cases in which the request for a personal hearing is made. There is no question of any discretion about allowing or not allowing the opportunity of a personal hearing, as upon a request being made by the assessee for a personal hearing, such an opportunity is required to be afforded to him. In any event, it is an amendment in the faceless appeal rules which is meant to obviate the undue hardships of the assessee in presenting their cases to the first appellate authority, and when such an amendment is made to cure the shortcomings of the scheme, and thus obviate the unintended hardships to the taxpayers, the amendment is to be treated as retrospective in effect. It is for the reason of the well-settled legal position that a curative amendment in the law is to be treated as retrospective in nature even though it may not state so specifically.”
Mr. C Naresh, appeared for the assessee.
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