Income Tax Payer Unable to Opt for Hearing Due to Portal Glitch: Madras HC Remands Case directing to Pay ₹10K to Govt Naturopathy Med. College [Read Order]

The Court held that the denial of a hearing due to system failure constitutes a violation of the principles of natural justice.

R.R. International, a Tiruppur-based firm, challenged the assessment order dated 28.03.2024 passed under Section 143(3) read with Section 144B of the Income Tax Act for the Assessment Year 2022-23.

The petitioner contended that although it had submitted replies to the show cause notices issued on 20.03.2024 and 24.03.2024, it was unable to avail the option of a personal hearing due to the portal automatically closing after submitting the reply.

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The Income Tax Department argued that the portal had clear instructions to request a personal hearing by clicking the “seek video conferencing” button before submitting the reply. However, the petitioner maintained that the system’s automatic closure denied it a fair opportunity to opt for the hearing.

Justice Krishnan Ramasamy, while accepting the petitioner’s contention, observed that technical impediments beyond the taxpayer’s control cannot be held against them. The Court ruled that an assessment order passed without affording an opportunity of personal hearing, especially where demand is raised, violates natural justice.

Accordingly, the High Court set aside the impugned assessment order and remanded the matter to the assessment unit, subject to the petitioner depositing ₹10,000 with the Principal Government Naturopathy Medical College and Hospital. The Court directed the department to reactivate the portal, allow the petitioner to file a fresh reply, and grant a personal hearing before passing a fresh order on merits.

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