TMI Blog2022 (5) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... en matter, should be granted and that since the statute itself makes the provision for grant of personal hearing, the respondents cannot veer away from the same. Hence, this court is of the view that since the assessee has a vested right to personal hearing and the same has to be given, if such a request is made and that the right to personal hearing cannot depend upon the facts of each case. Admittedly, the impugned draft assessment order was passed without considering the request for personal hearing through video conference, though made belatedly on 26.03.2022, even without closing the said request and keeping the status as open . Therefore, since no personal hearing had been granted before passing the impugned assessment order, there is a violation of principles of natural justice as well as mandatory procedure prescribed in Faceless Assessment Scheme as stipulated in Section 144B of the Income Tax Act. The impugned draft assessment order is liable to be set aside and also the demand notice and the proceedings initiated pursuant thereto for the Assessment Year 2016-2017 are also liable to be set aside. WP allowed. - Writ Petition No.10398 of 2022 - - - Dated:- 5-5-2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business activities, profit and loss account, balance sheet of his business, purchase invoices, sales invoices, bank account statement etc., to show that no income/loss has escaped the assessment. Thereafter, the petitioner received another notice dated 28.01.2022 issued under Section 142 (1) of the Act, 1961 seeking further clarification, pursuant to which, the petitioner also filed necessary documents. 3. While so, a draft assessment order was communicated under Section 144B (1) (xiv) of the Act, through a show cause notice dated 17.03.2022, stating that the purchase bills submitted by the petitioner were on plain sheet of paper; complete name and address of the seller/consignor was not mentioned; that the bills are not signed; and that as to why VAT is not charged on the purchases. Thereafter, the petitioner has submitted his reply raising objections to the observations made in the draft Assessment Order. Further, as contemplated under Section 144B (7) (vii) of the Act, 1961, the petitioner requested for a personal hearing on 26.03.2022 stating that the material submitted by him was not considered in the draft Assessment Order. The petitioner further stated that as per Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Conference, whereas the request of the petitioner for personal hearing is neither accepted nor has been rejected and the same is still shown as open request in the e-portal, but, instead of considering such request for personal hearing, the 2nd respondent passed the impugned Assessment Order dated 31.03.2022 assessing the tax liability of Rs.1,21,60,580/- (Rs.40,06,747/- as tax payable + Rs.28,84,824/- towards interest) and computing amount payable as Rs.68,91,571/-, which is illegal, arbitrary, violative of principles of natural justice and also contrary to the procedure contemplated under Section 144B (7) (vii) of the Income Tax Act, 1961, and hence, the impugned assessment order is illegal, arbitrary and liable to be set aside. 6. On the other hand, Smt. M. Kiranmayee, learned standing counsel appearing for the respondents would submit that as per the draft Assessment Order dated 17.03.2022, the petitioner has to submit his response through his registered e-filing account on or before 22.03.2022; that the draft assessment order specifically show that the request for personal hearing to make oral submissions can be made only before expiry of compliance date and time and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Faceless Assessment Scheme, 2019. Where any modification is proposed in the draft assessment order (DAO) issued by any AU and the Assessee or the authorised representative in his/her written response disputes the facts underlying the proposed modification and makes a request for a personal hearing, the CCIT ReAC may allow personal hearing through Video Conference, after considering the facts and circumstances of the case, as below:- 1. The Assessee has submitted written submission in response to the DAO. 2. The Video Conference will ordinarily be of 30 minutes duration. That may be extended on the request of the Assessee or authorised representative. 3. The Assessee may furnish documents/evidence, to substantiate points raised in the Video Conference during the session or within a reasonable time allowed by the AU, after considering the facts and circumstances of the case . 9. A reading of the above provision makes it clear that in a case where a variation is proposed in the draft assessment order or final draft assessment order or revised draft assessment order, an opportunity would be provided to the assessee by serving a notice, calling upon him to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F.No.Pr.CCIT/NeAC/SOP/ 2020-21, dated 23.11.2020 and that CBDT vide order F.No.187/3/2020-ITA-1, dated 31.03.2021 extended the Circulars/notifications issued under Faceless Assessment Scheme to the Faceless Assessment under Section 144B of the Act and therefore, the SOP contained in the circular dated 23.11.2020 was equally applicable to the proceedings under Section 144B of the Act also. 12. In Piramal Enterprises Limited v. Additional/Joint/ Deputy Assistant Commissioner of Income-Tax/Income Tax Officer others (2021 SCC Online Bombay 1534), the High Court of Bombay, while interpreting Section 144B of the Income Tax Act and the principles of natural justice, categorically held that when hearing has been envisioned and incorporated, it is imperative to observe principles of natural justice as stipulated. It is further held that when an assessee approaches with response to a show cause notice, the request made by an assessee, as referred to in clause (vii) of sub-section 7 of Section 144B, shall be taken into account and it would not be proper, looking at the prescribed procedure with strong undercurrent to have hearing on a request after notice, to say that petitioner wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that a hearing would be afforded to the Company, the case is remitted to the concerned authority to give a full, fair and effective hearing. The Supreme Court held as follows: .the phrase natural justice is not capable of a static and precise definition. It cannot be imprisoned in the straight-jacket of a cast-iron formula. Rules of natural justice are not embodied of such rules. It was held that two fundamental maxims of natural justice have now become deeply and indelibly ingrained in the common consciousness of mankind as pre-eminently necessary to ensure that the law is applied impartially objectively and fairly. These twin principles are (i) audi alteram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power. Its reach should not be narrowed and its applicability circumscribed ... 15. Having regard to the facts and circumstances of the case and keeping in view the law laid down in the judgments referred above, this court is of the view that no standard, procedures and processes have been framed in terms of clause (xii) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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