Liberty is, given to AO to pass a fresh assessment order, after according personal hearing to the petitioner and/or her authorized representative. The personal hearing will be accorded via video-conferencing (VC) mechanism. For this purpose, the assessing officer will issue a written notice, albeit, via the registered e-mail of the petitioner. The Respondent no.1 will issue the VC link, in that behalf, to the petitioner. In case, the petitioner wishes to file written submissions, respondent no.1 will take the same on record.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. Allowed, subject to just exceptions.
2. The prayer made in the captioned application is to grant exemption from filing the requisite court-fee and sworn/ notarised/ affirmed affidavits along with the present petition. The captioned application is disposed of with a direction to the petitioner, to place on record the duly sworn/notarised/affirmed affidavits and to deposit the requisite court-fee, within three days of the Court resuming its normal and usual work pattern.
W.P.(C) 5775/2021 & CM No.18114/2021[Application filed on behalf of the petitioner seeking stay on the operation of the impugned assessment order dated 26.05.2021 and consequential proceedings]
3. This writ petition is directed against the assessment order dated 26.05.2021 passed by respondent no.1 under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (in short „the Act‟).
3.1 To be noted, the impugned assessment order concerns the assessment year („AY‟) 2018-2019. In addition thereto, the petitioner has also laid a challenge to the notice of demand issued under Section 156 of the Act, and notice for initiating penalty proceedings issued under Section 271AAC(1) of the Act.
4. Issue notice. Mr. Ajit Sharma accepts service on behalf of the respondents/revenue.
4.1. Mr. Sharma says that, in view of the directions that we propose to pass, he does not wish to file a reply, and that he will argue the matter on the basis of record, presently available with the court.
5. Thus, with the consent of the learned counsel for the parties, the petition is taken up for hearing and final disposal.
5.1. Principally, the petitioner is aggrieved by the fact that before passing the impugned assessment order, she was not granted personal hearing in the matter.
5.2. We may note, the record shows that the petitioner was issued a show cause notice-cum-draft assessment order dated 15.04.2021. Via this show cause notice-cum-draft assessment order, the petitioner was called upon to file her response/objections to the same by 23:59 hours on 19.04.2021. Respondent no.1, pertinently, indicated in the draft assessment order that he proposed to make additions, which cumulatively amounted to approximately Rs.15.82 crores.
5.3. The record also shows that the petitioner filed her response/objections on 19.04.2021. Via her response, the petitioner, inter alia, requested for a personal hearing, albeit, through video-conferencing. In response to this request, respondent no.1 served a communication dated 23.04.2021 on the petitioner, whereby, he, inter alia, stated the following:
“You are requested to opt the „Personal Hearing through VC’ tab in E-proceedings through E-filing account on or before 25.04.2021….”
5.4. It appears [and that is the case set up by the petitioner] that, the petitioner as well as the members of her family, were afflicted with coronavirus. It is the petitioner‟s case that, on account of such situation obtaining in her household, she somehow missed respondent no. 1‟s communication dated 23.04.2021, addressed to her.
5.5. The petitioner sought to make amends, and accordingly, vide communication dated 07.05.2021, addressed to respondent no.1, stated, in substance, the following:
My entire household is down with Covid including myself and I am continuing to run a high fever. My husband is in the ICU at Apollo hospital with Covid. On cross checking we missed the communication regarding the VC as your notice went into my junk box and in view of health issues, remained unnoticed there. We would be grateful for a video hearing after May 16th when I hope to be recovered and in a position to focus on the matter at hand…..”
5.6. It appears that, respondent no.1 did not deal with the request made by the petitioner for personal hearing, via her communication dated 07.05.2021. Respondent no.1, instead, proceeded to pass the impugned assessment order.
5.7. Mr. Ajay Vohra, learned senior counsel, who appears on behalf of the petitioner, in support of the assertions made in the petition, has submitted that, there has been a breach of the principles of natural justice on two grounds:
(i) Firstly, the request for personal hearing in the petitioner‟s communication, dated 07.05.2021, was not dealt with. According to Mr. Vohra, since the Central Board of Direct Taxes (in short „CBDT‟) had already extended the timeline for passing the assessment order till 30.06.2021, the petitioner‟s request could have been accepted.
(ii) Secondly, the impugned assessment order does not take into account the detailed response/objections filed by the petitioner on 19.04.2021.
5.8. Mr. Sharma, on the other hand, submits that as far as the second aspect is concerned, it has no merit. Mr. Sharma says, a perusal of the impugned assessment order and notices issued under Section 142(1) of the Act would show that information was sought and responses were tendered by the petitioner. As regards the first ground, Mr. Sharma says that even this ground has no merit, as an opportunity was given to the petitioner for personal hearing, which was not availed by her.
6. We have heard the counsel for the parties and perused the record.
6.1. Insofar as the first ground is concerned, according to us, given the circumstances, which were put forth by the petitioner in the communication dated 07.05.2021, the Assessing Officer (in short „AO‟) should have, in the very least, dealt with the same, i.e., either rejected the request made or accommodated the petitioner having regard to the circumstances put forth by her. In reaching a conclusion as to which of the two options he/she should opt for, the AO could have asked for necessary supporting material, in case, he/she was under the impression that what was stated in the said communication was only a ruse to impede progress of the matter. Respondent no.1, instead, proceeded to pass the impugned assessment order, dated 26.05.2021, even when the timeframe for passing the assessment order stood extended till 30.06.2021.
6.2. Therefore, according to us, since the revenue, time and again, portrays to the assessees‟ at large, in various communications, that since Covid-19 pandemic is prevalent, it would like to create an environment, which is friendly, this approach of the revenue, while carrying out assessment proceedings, has not been understood by us. According to us, on this short point alone, the impugned order deserves to be set aside.
6.3. Thus, the second ground/objection raised by Mr. Vohra need not detain us [i.e. the purported failure on the part of the respondents/revenue to deal with and/or factor in the detailed response/objections filed by the petitioner while passing the impugned assessment order led to breach of natural justice], in view of what is stated hereinabove by us. This objection may not survive once a fresh assessment order is passed.
7. Therefore, for the foregoing reasons, we are inclined to set aside the impugned assessment order dated 26.05.2021, as also the consequential notice of demand and notice for initiating penalty proceedings of even date.
7.1. It is ordered accordingly. Liberty is, however, given to respondent no.1 to pass a fresh assessment order, after according personal hearing to the petitioner and/or her authorized representative. The personal hearing will be accorded via video-conferencing (in short “VC‟) mechanism. For this purpose, the assessing officer will issue a written notice, albeit, via the registered e-mail of the petitioner. The notice will indicate the date and time of the hearing.
7.2. Respondent no.1 will issue the VC link, in that behalf, to the petitioner. In case, the petitioner wishes to file written submissions, respondent no.1 will take the same on record.
8. The writ petition is, thus, disposed of in the aforesaid terms. Pending application shall stand closed too.
9. The case papers, will be consigned to the record.