Technical Glitch in Income Tax Portal: Madras HC quashes Order as Taxpayer Could not Opt Personal Hearing [Read Order]

The petitioner, M/s R.R. International, a Tiruppur-based firm, challenged the assessment order dated 28.03.2024 for Assessment Year 2022–23.

The petitioner contended that although it had duly submitted replies to two successive show-cause notices issued by the National e-Assessment Centre, it was unable to opt for a personal hearing due to the portal automatically closing after the reply was uploaded.

This, according to the petitioner, was a technical glitch beyond their control and deprived them of a vital opportunity to be heard.

The Income Tax Department, represented by Senior Panel Counsel Dr. B. Ramaswamy, argued that the portal clearly provided an option to request a personal hearing via video conferencing and that it was the taxpayer’s responsibility to exercise this option before submitting the reply.

However, the Department also acknowledged that the portal interface requires the personal hearing option to be selected before submitting the reply, failing which the window closes thereby implicitly accepting that such closure is system-driven and not discretionary.

Justice Ramasamy stated that a “In the case on hand, due to technical glitch, the petitioner could not opt for personal hearing in the portal and ultimately the impugned order was passed without giving opportunity of personal hearing to the Petitioner and therefore the same is liable to be set aside.”

When a personal hearing is requested, particularly in cases involving possible tax demands, the court observed that failing to grant it results in a denial of a fair hearing and violates natural justice.

Accordingly, the Court quashed the impugned assessment order and remanded the matter to the Assessing Officer for fresh consideration. As a condition for setting aside the order, the petitioner was directed to deposit ₹10,000 with a government medical institution.

The Department was directed to reactivate the portal and permit the petitioner to upload its reply and request a personal hearing after receiving proof of payment. Additionally, the respondent was instructed to complete the reassessment as soon as possible and legally, and to give a clear 14-day notice for a hearing.

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