AO is to Hold Personal Hearing in Designated Area of Tax Office If Video Conference Facility is Not Available | HC

Case Details: Fusion Granito (P.) Ltd. v. ACIT - [2024] 164 taxmann.com 5 (Gujarat)

Judiciary and Counsel Details

• Bhargav D. Karia & Niral R. Mehta, JJ.
• B.S. Soparkar for the Petitioner.
• Karan G. Sanghani for the Respondent.

Facts of the Case

Assessee’s case was selected for scrutiny, and an assessment order was passed. After that, revisionary proceedings were initiated under section 263, and an assessment order was set aside. The Assessee requested a personal hearing.

However, revenue denied the same on the grounds that a personal hearing through videoconferencing was not possible. The assessment order was passed without providing the assessee with the opportunity, and additions were made under section 68. The assessee filed a writ petition before the Gujarat High Court.

High Court Held

The High Court held that the AO passed the assessment order under section 143(3) read with section 263 without providing the opportunity of personal hearing in violation of the principle of natural justice.

As per the provisions of section 144B of the Income Tax Act and Circular No. 06.09.2021 issued by the CBDT, the AO is required to give a personal hearing through video conference. If the facility is unavailable, the personal hearing is to be conducted in a designated area in the Income Tax Office, and the proceedings are to be recorded.

Therefore, the AO’s contention that there needed to be functionality to conduct hearings through video conferences cannot be accepted. Not providing the opportunity of hearing to the assessee, though required as per the provisions of section 144B, was a breach of the principle of natural justice.

Accordingly, the matter was remanded to the AO to give the assessee an opportunity to be heard either through video conference or through a personal hearing in the designated area of the income tax office.