SDS Infratech Private Limited v. National Faceless Assessment Centre Delhi

1. The petition has been heardby way of video conferencing.

2. Present writ petition has been filed challengingthe Assessment Order dated 21st April 2021 passed by the Respondent and seeking directions therebyprohibiting theRespondentfrom collecting the demand raised by the Respondent.

3. Learned counsel for the Petitioner states that the impugned assessment order is challengedon the ground of violation of principle of natural justice as no Video Conferencing or oral hearing opportunity was provided to petitioner despite specificrequest made vide communication dated 21st April 2021 as mandatedin relevant statutory norms and Central 2021:DHC:2013-DB W.P.(C) 6272/2021 Page[2] of 4 Board of Direct Taxes (CBDT) instructions. He emphasises that serious injusticehas been causedto petitioner by not providing a fair opportunity of Video Conferencing to the petitioner or oral hearing, prior to closure/finalization of impugnedtax assessment.

4. He points out that the petitioner has no other efficacious alternative remedy but to approach this Court and relies on the Supreme Court judgment in the case of Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd in Civil Appeal No. 8129 of 2019 amongst others.

5. Issue notice.Mr. Ruchir Bhatia,Advocateacceptsnoticeon behalf of Department of Revenue.

6. Mr.Bhatiastates that the expression used in clause (vii) of sub-section (7) of Section 144B is ‘may’ and not ‘shall’ and therefore, there is no vested right in the petitioner to claim a personal hearing.

7. Having heard learned counselfor the parties,this Court is of the view that Section 144B (7) provides for a personal hearing. The relevant portion of Section 144B (7) is reproduced hereinbelow:- “144B. Faceless assessment – (1) xxx xxx xxx (7) For the purposes of faceless assessment— xxx xxx xxx

(vii) in a case where a variation is proposed in the draft assessment order or final draft assessment order or revised draft assessment order, and an opportunity is provided to the assessee by serving a notice calling upon him to show-cause as to why the assessment should not be completed as per the such draft or final draft or revised draft assessment order, the assessee or his authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the income-tax authority W.P.(C) 6272/2021 Page[3] of 4 in any unit;

(viii) the Chief Commissioner or the Director General, in charge of the Regional Faceless Assessment Centre, under which the concerned unit is set up, may approve the request for personal hearing referred to in clause (vii) if he is of the opinion that the request is covered by the circumstances referred to in sub-clause (h) of clause (xii);

(xii) the Principal Chief Commissioner or the Principal

Director General, in charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, proceduresand processes for effective functioning of the National Faceless Assessment Centre, Regional Faceless Assessment Centres and the unit set up, in an automated and mechanised environment, including format, mode, procedure and processes in respect of the following, namely:— (h) circumstances in which personal hearing referred to clause

(viii) shall be approved;

8. The learned Predecessor Division Bench in Sanjay Aggarwal v. National Faceless Assessment Centre Delhi in W.P.(C) 5741/2021, while interpreting aforesaid section has heldas under:- “11.4. A careful perusal of clause (vii) of Section 144B (7) would show that liberty has been given to the assessee, if his/her income is varied, to seek a personal hearing in the matter. Therefore, the usage of the word ‘may’, to our minds, cannot absolve the respondent/revenue from the obligation cast upon it, to consider the request made for grant of personal hearing. Besides this, under sub-clause (h) of Section 144B (7)(xii) read with Section 144B (7) (viii), the respondent/revenue has been given the power to frame standards, procedures and processes for approving the request made for according personal hearing to an assessee who makes a request qua the same. W.P.(C) 6272/2021 Page[4] of 4

11.5. In several matters, we have asked the counsels for the revenue as to, whether any standards, procedures and processes have been framed for dealing with such requests. The response, which we have got from the standing counsels including Mr. Chandra, is that, to the best of their knowledge, no such standards, procedures as also processes have been framed, as yet.

12. Therefore, in our view, given the aforesaid facts and circumstances, it was incumbent upon the respondent/revenue to accord a personal hearing to the petitioner. As noted above, several requests had been made for personal hearing by the petitioner, none of which were dealt with by the respondent/revenue.