INCOME TAX ACT, 1961

Section 144B

Assessment - Validity - No opportunity of personal bearing given to assessee -

Notice along with the draft assessment order was given to assessee on 4-4-2021, the response to the same was given within two days by assessee in the mode as prescribed under the Law. It also filed further reply to the said notice on 8-4-2021 as well as on 15-4-2021 in continuation of the first reply of 6-4-2021. Accordingly, AO passed the impugned assessment order adding the income as mentioned above under section 144(3) read with section 144B. Assessee questioned this on the ground of non-observance of principle of natural justice. A letter was sent by assessee to AO on 7-4-2021 requesting for personal hearing, however, the same was not granted. According to AO, on 6-4-2021 while responding to the request, there would have been a hyper-link available which assessee ought to have clicked but assessee missed out and therefore, if any subsequent request for the same was not sustainable. Further, there was no reference of the request made on 7-4-2021 in a subsequent reply made in continuity on the part of assessee of 8-4-2021 as well as 15-4-2021. Held: Though, there was no reference of the request made on 7-4-2021 in a subsequent reply made in continuity on the part of assessee of 8-4-2021 as well as 15-4-2021. However, that would not in any manner question the conduct of requesting for the personal hearing in as much as that aspect was neither disputed nor belied from the material which was available from the e-portal of the IT Department. In fact, in the affidavit-in-reply itself there was a reference of such a request made by assessee which according to AO was impermissible as assessee had not exercised the option while responding to the notice and the draft assessment order on 6-4-2021. In clause (xii) of sub-section (7) of section 144B, there is nothing which insists that on the day on which the reply is given, there is any prohibition to tender the subsequent reply in continuity. It also does not anywhere prohibit making of such a request through the e-portal of the department. It was a time when this regime of faceless assessment had merely begun and there were many hiccups in absence of the revenue having shown that the link was created at the relevant point of time and in absence of any material on that issue, when it recognized the fact that it had received the request of 7-4-2021, there was no earthly reason for it to have ignored it and not to avail the hearing. Therefore, not only on the ground of serious prejudice for want of opportunity of hearing but also when there was a huge additions of tax by way of a draft assessment order, which eventually become the final assessment order, as framed by AO on 21-4-2021, the matter was remanded back to AO, who would grant an opportunity of personal hearing to assessee by way of the video conferencing and thereafter pass a reasoned order in accordance with law.

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