HC expounds Section 144B (7) of the Income Tax Act provides for a personal hearing of the Party

  

On 16^th July, a bench of Delhi High Court consisting of Justice Navin Chawla, while setting aside the notice of demand passed under section 156 of the Income Tax Act, 1961 by the Assessing Officer, held that held that an order challenging the assessment under section 143(3) read with Section 144B of the Income Tax Act provides for the personal hearing of the party against whom such order is made.

Facts of the Case:

The Present writ petition had been filed challenging the assessment order dated 22nd June 2021 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, notice of demand dated 22nd June 2021 passed under Section 156 of the Act and notice for penalty dated 22nd June 2021 passed under Section 274 read with Section 270A of the Act for the Assessment Year. A direction was also sought by the petitioner to restrain the respondents from giving effect to the impugned assessment orders and notices.

Contention of the Petitioner:

The learned Counsel for the petitioner submitted the following contention:

 

1. It was submitted that the Respondent gave the Petitioner very short time to submit its reply, i.e. by 25^th April, 2021.
2. It was also submitted that the Petitioner made request to the Respondent for grant of adjournment for fifteen days as the time allowed was too short taking into consideration the complexity of the issue and the prevalent lockdown, due to which the employees were not able to reach their place of work.
3. It was argued that the petitioner vide order dated 25^th May,2021 in addition to a detailed reply, categorically requested for grant of personal hearing to explain its case. However, neither the response was considered nor a personal hearing was granted and in fact the respondent passed the impugned order dated 22nd June, 2021.
4. It was contended that the said impugned order and notices had been passed without proper appreciation of the facts of the present case and without affording the Petitioner an opportunity of hearing, which is in gross violation of principles of natural justice and therefore is not in accordance with the provisions of the Act.

Contention of the Respondent:

Mr.Puneet Rai, learned senior standing counsel appearing on behalf of the respondent contended the following:

1. It was submitted that the respondent did not consider the submission/objection filed by the petitioner as it was given without a covering letter and was not warranted as it was against the basic purpose for which faceless assessment was introduced.
2. It was also urged 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.
   

   Observation and judgement of the court:

    Having heard learned counsel for the parties, this Court wass of the view that Section 144B (7) provides for a personal hearing of the party.

   Thus, the impugned assessment order dated 22nd June 2021, notice of demand dated 22nd June 2021 passed under Section 156 of the Act and notice for penalty dated 22nd June 2021 were set aside and the matter was remanded back to the Assessing Officer, who shall grant an opportunity of personal hearing to the petitioner by way of a Video Conferencing and thereafter pass a reasoned order in accordance with law.

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source ; .latestlaws.com

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