Case Law Details
Vee See Bee Trust Vs Assessment Unit (Madras High Court)
Madras High Court held that personal hearing through video conferencing or other mode was not provided inspite of specific request. Hence, order passed without satisfying mandatory requirement of section 144B of the Income Tax Act is unsustainable in law.
Facts- Vide the present petition, the petitioner mainly challenges the assessment order dated 22.03.2024 on the ground that a personal hearing through video conferencing or other mode was not provided to the petitioner in spite of an express request for the same.
Conclusion- Held that the statutory prescription is intended to be mandatory for reasons set out therein. The petitioner has placed on record evidence that a request for personal hearing was made not only in the reply dated 03.02.2024 to the show cause notice but also by adopting the method prescribed in such regard. In those circumstances, the impugned order cannot be sustained by reason of breach of the mandatory requirement of Section 144B.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An assessment order dated 22.03.2024 is challenged on the ground that a personal hearing through video conferencing or other mode was not provided to the petitioner in spite of an express request for the same. Pursuant to the petitioner filing the return of income for assessment year 2022-23, notices were issued to the petitioner under Section 142(1) and 143(2) of the Income Tax Act, 1961 (the I-T Act). Such notices were replied to by the petitioner. This was followed by show cause notice dated 30.01.2024. By such show cause notice, the petitioner was called upon to show cause as to why the proposed variations should not be made. The petitioner replied to such show cause notice and requested for personal hearing through video conferencing. Such request was made on 03.02.2024. The impugned assessment order was issued in these facts and circumstances on 22.03.2024 without granting a personal hearing.
2. Learned counsel for the petitioner referred to the show cause notice, the petitioner’s reply and the specific request for a personal hearing in the manner prescribed and submitted that the impugned order is vitiated for non compliance with the mandatory prescription under Section 144B of the I-T Act. In support of this contention, he relied upon an earlier order of this Court dated 26.04.2024 in W.P.No.11098 of 2024.
3. Mrs. S. Premalatha, learned junior standing counsel, accepts notice for the respondents. By turning to the impugned order, learned counsel pointed out that the petitioner received notices under Section 143(2) and Section 142(1) and replied thereto. Likewise, she pointed out that the petitioner replied in full to the show cause notice. She contended that principles of natural justice were complied with by providing opportunities to the petitioner to reply to the notices and the show cause notice. In such context, she contends that the non provision of a personal hearing by video conferencing does not vitiate the order. She points out that this Court interfered in order dated 26.02.2024 in W.P.No.32560 of 2023 because an issue not raised earlier was included in the impugned draft assessment order in that case. She also submits that the fact situation in Bharat Aluminium Company Limited v. Union of India (2022)134 taxmann.com 187 is distinguishable.
4. The case turns on an interpretation of clause (viii) of subsection (6) of Section 144B of the I-T Act. In W.P.No.11098 of 2024, I had extracted the said provision and concluded that the statutory prescription is intended to be mandatory for reasons set out therein. The petitioner has placed on record evidence that a request for personal hearing was made not only in the reply dated 03.02.2024 to the show cause notice but also by adopting the method prescribed in such regard. In those circumstances, the impugned order cannot be sustained by reason of breach of the mandatory requirement of Section 144B.
5. For reasons set out above, impugned assessment order dated 22.03.2024 is set aside and the matter is remanded. The first respondent is directed to provide a reasonable opportunity to the petitioner, including by way of a personal hearing through video conferencing, and thereafter issue a fresh assessment order. This exercise shall be completed within three months from the date of receipt of a copy of this order.
6. W.P.No.11910 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.13006, 13008 and 13009 of 2024 are closed.
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