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TMI Blog2024 (6) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income Tax, Rajkot, under section 143 (3) read with section 263 of the Income Tax Act, 1961 (for short 'the Act') for A.Y. 2018-19. 5. Brief facts of the case are as under: 5.1 The Petitioner Company was incorporated on 12.04.2017 in the business of manufacturing of ceramic vitrified tiles. The Petitioner filed its return of income for the Assessment Year 2018-19 on 21.09.2018 declaring loss of Rs. 4,33,27,151/-. Thereafter, the case of the Petitioner was selected for complete scrutiny for three issues including the issue of Share capital. Assessment order u/s 143 (3) was passed by the Respondent no. 2 on 18.01.2021 accepting returned income. 5.2 Thereafter the case of the Petitioner was taken up for revision u/s 263 of the Act and the assessment order dated 18.01.2021 was set aside vide order dated 27.03.2023. The Petitioner has appealed against the order u/s 263 of the Act dated 27.03.2023 and the same is pending before the Income Tax Appellate Tribunal. 5.3 Meanwhile, the proceedings consequent to the order u/s 263 of the Act commenced and the following correspondence took place: Date Event Date Event 12.10.2023 Intimation Notice by the Respondent 2 Annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer after filing of the written submissions and issue the show cause notice for personal hearing through video conference. 6.3 It was submitted that the respondent Assessing Officer therefore ought to have given opportunity of personal hearing to the petitioner before passing impugned assessment order. In support of his submissions learned advocate Mr. Soparkar referred and relied upon following decisions: * Bharat Aluminium Company Ltd vs. Union of India [2022] 134 taxmann.com 187 (Delhi); * Maheshkumar Bhagvandas Patel vs. Income Tax Officer [2023] 153 taxmann.com 24(Guj); * Dediyasan Industrial Coop. Credit Society Ltd vs. Addl./Jt./Dy./Assistant Commissioner of Income-tax/Income-tax Officer reported in [2022] 141 taxmann.com 452 (Guj.); * Agrawal Jmc Joint Venture Vs Assistant / Joint / Deputy / Assistant Commissioner Of Income Tax/Income Tax Officer in Special Civil Application No. 7477 of 2021. 7. On the other hand, learned Senior Standing Counsel Mr. Karan Sanghani submitted that the petition may not be entertained in view of the alternative efficacious remedy available to the petitioner by preferring the appeal before the CIT(A) and further appeal before the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Video Conference." 7.5 It was therefore submitted that in view of the above facts, the petitioner may be relegated to avail alternative efficacious remedy to file application before the CIT (Appeal). 8. Having heard learned advocates for the respective parties and considering the facts of the case, the contentions raised on behalf of the respondent that there is no functionality to conduct hearing through video conference cannot be accepted because as per the provisions of the section 144B of the Act as well as circular dated 06.09.2021 issued by the CBDT, the respondent-Assessing Officer is required to give personal hearing through video conference and if the facility is not available then the personal hearing is to be conducted in a designated area in Income Tax Office and the hearing proceedings are to be recorded. Circular No. 06.09.2021 issued by the CBDT reads as under: "1. The Central Board of Direct Taxes (CBDT) has accorded approval for transfer of assessments/penalties to Jurisdictional Assessing Officers (PAN based), as found necessary, on case-to-case basis in terms of Section 4B(8) of the Income-tax Act, 1961 (Act)/clause 5(2) of Faceless Penalty Scheme, 2021. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contention of the respondent which is stated on oath is contrary to the circular issued by the CBDT. 10. The contention raised on behalf of the respondent that the petitioner has alternative efficacious remedy to file appeal before the CIT (Appeal) the petition may not be entertained is also not tenable in view of the fact that there is a breach of principle of natural justice by not providing opportunity of hearing to the petitioner though required as per the provisions of section 144B read with circular issued by the CBDT dated 06.09.2021 which is binding upon respondent-Assessing Officer in view of the settled legal position Hon'ble Supreme Court in case of Whirlpool Trade Marks, Mumbai And Others reported in (1998)8 SCC 1. 11. This Court in similar facts in Special Civil Application No. 990 of 2023 has held as under: "9. Clause 4 of Instruction No. 20/2015 issued by the CBDT. reads as under: "4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additions/disallowances in accordance with the principle o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 143 (3) of the Act during the financial year 2019-20, it is hereby directed that such assessment proceedings shall be conducted electronically subject to exceptions in para below. Consequently, assessees are required to produce/cause to produce their response/evidence to any notice/communication./show cause issued by the Assessing Officer electronically (unless specified otherwise) through their 'E-filing' account on the 'E-filing' portal. For smooth conduct of assessment proceedings through E-Proceeding.' it is further directed that requisition of information in cases under 'E-Proceeding' should be sought after a careful scrutiny of case records. (ii) In following cases, where assessment is to be framed during the Finance Year 2019-20, "E-proceeding' shall not be mandatory a. Where assessment is to be framed under section(s) 153A, 153C and 144 of the Act. In respect of assessments ty be framed under section 147 of the Act, any relaxation from e-proceeding due to the difficulties in migration of data from ITD to ITBA etc. shall be dealt as per clause (f) below; b. In set aside assessments; c. Assessments being framed in non-PAN cases; d. Cases where Income-tax retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... echnically feasible, personal hearings may be conducted in a designated area in Income Tax Offices. The hearing proceedings may be recorded." 14. Therefore, on harmonious reading of the above circulars, instructions and letters, it appears that since 2015 as per the desire of the Board, the Assessing Officer is mandatorily required to issue an appropriate show cause notice duly indicating the reasons for the proposed additions/ disallowance along with necessary evidence/reasons forming basis of the same before passing the final order. As the matter of fact, such position will continue even when the case is transferred to the respondent Assessing Officer under section 144B (8) of the Act as per Circular No. 27/2019 which was issued by the CBDT applicable to the cases where the assessment were framed not covered under the E-assessment notified by the Board. As per clause 4 of the Circular No. 27/2019 it is specifically provided that in case where assessment proceedings are being carried out through E-proceedings includes all the cases other than cases covered under the E-Assessment Scheme, 2019, personal hearing/attendance may take place where a show-cause notice contemplating any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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