Income Tax Faceless Appeal Scheme 2020 – Commissioner (Appeals) is mandatorily required to allow request for personal hearing – ITAT
ABCAUS Case Law Citation:
ABCAUS 3826 (2023) (12) ITAT
Important Case Laws relied upon by parties:
Vijay v. State of Maharashtra & Ors. (2006) 6 SCC 28
Bank of India Vs. ACIT
Sabnis Ashok Anant v. Asstt. CIT [(2009) 29 SOT 29
Hirday Narain v. ITO [(1970) 78 ITR 26 (SC)
In the instant case, the assessee had challenged the order passed under Faceless Appeal Scheme 2020 by the CIT(A) NFAC in passing the impugned appellate order ex-parte without granting opportunity of being heard in person.
The assessee contended that the CIT(Appeals) erred in passing ex-parte order without granting opportunity of being heard in person in spite of request made by the assessee.
It was submitted that in the grounds of appeal before NFAC, the assessee specifically requested to provide opportunity for representing the appeal in person as mandate by provision of section 250 of the Act which the CIT(Appeals) ignored and passed an ex-parte order.
It was further submitted that non allowing the opportunity of personal hearing was in violation to the provisions of Faceless Appeal Scheme, 2021 rule 12(3) of which stipulates allowing the request of the assessee for personal hearing.
The assessee submitted that in the course of appellate proceedings a notice u/s 250 was issued by NFAC notifying the date of compliance and in reply the assessee made submission online requesting for an adjournment for ten days on ground of illness. Thereafter there was no reply received from NFAC either accepting or rejecting the request made for adjournment and finally the order was passed without hearing the assessee.
Therefore, it was prayed that the order may be restored back to the file of the CIT(Appeals) for denovo adjudication.
The Tribunal observed perusal of the Rule 12(3) of Faceless Appeal Scheme, 2021, shows that the scheme made it mandatory to the Commissioner (Appeals) for allowing the request for personal hearing.
The Tribunal noted that the Co-ordinate Bench had observed that in terms of rule 12(2) of the National Faceless Appeals Scheme 2020 the appellant or his authorized representative may request for personal hearing so as to make his oral submissions or present his case before the appeal unit under this Scheme”, and under rule 12(3) the Chief Commissioner or the Director-General, in charge of the Regional Faceless Appeal Centre, under which the concerned appeal unit is set up, may approve the request for personal hearing referred in certain circumstances. It is through this framework of rules that video conferencing, as was the permissible mode for making submissions, was sought. As to what should be such circumstances, the call once again was to be taken by the Chief Commissioner or the Director-General, with the prior approval of the CBDT.
The Co-ordinate Bench further observed that once a request is made for the hearing through video conferencing, in the course of the faceless appellate proceedings, in our considered view, it was incumbent upon the Chief Commissioner or the Director-General concerned to either grant the opportunity, or, if so deemed fit, decline the same for the reasons to be set out, and there cannot be any justification for not making a decision on such a request.
The Bench went on to observe that though the expression used in rule 13(2) is that the Chief Commissioner of the Director-General in charge of the related Regional Faceless Appeals Centre “may” approve such a request for personal hearing, it is only elementary that whenever law confers any powers in any public authority, such a public authority has the corresponding duty to exercise these powers when circumstances so justify or warrant.
The Co-ordinate Bench also observed that in view of the the Faceless Appeals Scheme 2021, which has come into effect from 28th December 2021 in supersession of the Faceless Appeals Scheme 2020, even a specific call on the request for video conferencing hearing may is not really necessary.
The Co-ordinate Bench observed that as a result of new rules, the opportunity of a personal hearing, through video conferencing, is to be granted in all such cases in which the request for a personal hearing is made. There is no question of any discretion about allowing or not allowing the opportunity of a personal hearing, as upon a request.
The Co-ordinate Bench further noted that law as settled by a constitutional bench of the Hon’ble Supreme Court, is that when an opportunity of presenting the case, through the video conferring in the faceless appeal proceedings, is now available to every taxpayer, on-demand, the same must also be held to be admissible in the proceedings, if so demanded by the assessee, in the old rules as well.
In view of the decision of the Co-ordinate Bench, the Tribunal allowed the appeal and restored the matter to the file of the CIT(Appeals)-NFAC to provide adequate opportunity of being heard to the assessee in accordance with law.
The dispute whether grant of opportunity of personal hearing under Faceless Scheme 2020 is mandatory or not was already before the Hon’ble Supreme Court (ABCAUS 3549 2021 09 SC). It was the submission of the CBDT that the Department had a second look at the matter and had issued the Faceless Appeal Scheme 2021 vide notification dated 28.12.2021 in terms whereof sub-clause 2 and 3 of Clause 12 stipulate that the appellant or his authorized representative can request for a personal hearing to make his oral submissions and the same “shall” be allowed by the concerned Commissioner (Appeals). The ITAT in the instant case seems to be not made aware of this case.
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