Rajlaxmi Digvijay Khanvilkar Vs DCIT (Bombay High Court)
Case Summary: The Bombay High Court, in Rajlaxmi Digvijay Khanvilkar v. Deputy Commissioner of Income Tax, Circle 1, Kolhapur & Ors., held that an assessment completed without granting a personal hearing requested by the assessee through the income-tax portal was procedurally invalid. The assessee had selected the “Seek Video Conferencing” option in response to the show-cause notice, and the request was acknowledged by email. Despite this, the Assessing Officer passed the assessment order under Sections 143(3) read with 144B and raised a consequential demand under Section 156 without conducting the requested hearing. The Court set aside the assessment order, demand notice and subsequent notices, remitting the matter to the Assessing Officer for fresh consideration after affording a personal hearing.
Core Issue: Whether a faceless assessment order passed without granting a personal hearing through video conferencing, despite the assessee’s request having been acknowledged, violates Section 144B(6)(vii) of the Income-tax Act, 1961.
Fact: The assessee received a show-cause notice dated 25 February 2025 and requested a personal hearing through video conferencing by selecting the relevant option on the income-tax e-filing portal. The request was acknowledged by email dated 5 March 2025. The assessee reiterated the request in a reply dated 8 March 2025. However, the Assessing Officer passed the assessment order under Sections 143(3) read with 144B on 12 March 2025 and raised a consequential demand under Section 156 without granting the requested hearing. The assessee approached the High Court seeking quashing of the assessment and demand and a fresh hearing on the merits.
AO / CIT(A) Finding: The Assessing Officer completed the assessment without affording the requested video-conferencing hearing and raised the consequential demand. The High Court judgment reproduced here does not discuss any separate finding by the CIT(A). The Revenue did not raise any particular objection before the High Court and left the matter to the Court’s orders.
High Court Finding: The Court held that failure to grant a personal hearing when requested by the assessee violates Section 144B(6)(vii) of the Income-tax Act, 1961. The request for video conferencing had been made and acknowledged, yet the assessment was completed without affording the hearing. Following its earlier decisions in Vimal Trading and New Globe Logistik LLP, the Court set aside the assessment order dated 12 March 2025, the consequential demand notice and subsequent notices. The matter was remitted to the Assessing Officer for fresh consideration after granting the assessee an opportunity of personal hearing on seven clear days’ notice. The exercise was directed to be completed within eight weeks from the date of the judgment.
Cases Relied: Vimal Trading v. National Faceless Assessment Centre, (2025) 172 taxmann.com 318 (Bombay High Court); and New Globe Logistik LLP v. Assistant Commissioner of Income Tax, (2025) 177 taxmann.com 176 (Bombay High Court). Both decisions support the principle that denial of a requested personal hearing in faceless assessment proceedings violates Section 144B(6)(vii).
Outcome: The writ petition was allowed and disposed of. The assessment order dated 12 March 2025, consequential demand notice and subsequent notices were set aside. The matter was remanded to the Assessing Officer for fresh consideration after granting a personal hearing with seven clear days’ notice, with the exercise to be completed within eight weeks. The Court did not decide the underlying assessment issues on their merits.
Cases Discussed
- New Globe Logistik LLP v. Assistant Commissioner of Income-tax — [2025] 177 taxmann.com 176 (Bombay High Court). Followed for the principle that denying a personal hearing requested by the assessee violates Section 144B(6)(vii).
- Vimal Trading v. National Faceless Assessment Centre — [2025] 172 taxmann.com 318 (Bombay High Court). Relied upon to set aside the assessment and consequential demand passed without granting the requested personal hearing.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Rule. Rule made returnable forthwith. By consent of the parties heard finally.
2. Aggrieved by the failure of the Assessing Officer to grant personal hearing as requested for by communication dated 8th March 2025 and also acknowledged by email dated 5th March 2025, this writ petition has been filed seeking intervention of this Court to set aside the Assessment Order dated 12th March 2025 as well as the consequential demand notice and to remand the matter back to the Assessing Officer to hear the Petitioner Assessee on merits and, thereafter, pass reasoned order.
3. Mr. Walve, learned counsel appearing for the Petitioner has relied upon the decisions of this Court in the case of Vimal Trading v. National Faceless Assessment Centre (2025) 172 taxmann.com 318 (Bombay)., as well as New Globe Logistik LLP v. Asistant Commissioner of Income-tax (2025) 177 taxmann.com 176 (Bombay).,and submits that non-granting of personal hearing when requested by an Assessee would be a violation of Section 144B(6)(vii) of the Income Tax Act, 1961 and that this Court may accordingly allow the petition and set aside the Assessment Order as well as the consequential demand notice and remand the matter back for a fresh hearing before the Assessing Officer.
4. Ms. Thakur, appearing for the Respondent – Revenue, does not raise any particular objection and leaves it to the orders of the Court.
5. It is not in dispute that in response to the show cause notice dated 25th February 2025, the Petitioner filed a reply dated 8th March 2025, whereby the Petitioner clarified that she had already opted for personal hearing through video conferencing on the portal by clicking the “Seek Video Conferencing” button available on the e-filing portal in response to the show cause notice dated 25th February 2025. It is also not in dispute that on 5th March 2025, the Petitioner had received an email acknowledging and evidencing the request for personal hearing through video conferencing. That, despite the request and acknowledgment for a personal hearing through video conferencing, the Assessing Officer on 12th March 2025 proceeded to pass an Assessment Order under Section 143(3) read with Section 144B of the Income Tax Act, 1961 and also raised a demand under Section 156 of the Income Tax Act, 1961.
6. It is settled law, as also enunciated in the case of Vimal Trading (supra)as well as New Globe Logistik (supra),that non-granting of a personal hearing when requested by an Assessee would be a violation of Section 144B(6)(vii) of the Income Tax Act, 1961. As has been noted above, the request for a personal hearing through video conferencing was made and also acknowledged, but the Assessment Order has been passed and the consequential demand has been raised without affording such personal hearing.
7. Accordingly, we are inclined to set aside the Assessment Order dated 12th March 2025 as well as the consequential demand notice and remand the matter back to the Assessing Officer to consider the same after affording an opportunity of personal hearing to the Petitioner.
8. The Assessment Order dated 12th March 2025 is set aside so also the consequential demand notice dated 12th March 2025 and any subsequent notices.
9. Let the matter be remanded back to the Assessing Officer. Let a fresh hearing be conducted after giving an opportunity of hearing to the Petitioner with seven clear days’ notice.
10. Let the aforesaid exercise be completed within a period of eight weeks from today.
11. The Writ Petition accordingly stands allowed and disposed in the aforesaid terms.
Notes:
1 (2025) 172 taxmann.com 318 (Bombay).
2 (2025) 177 taxmann.com 176 (Bombay).
