Reassessment order quashed due to error in personal hearing video conferencing link

Reassessment order quashed as assessee could not join the link of personal hearing through video conferencing due to technical failure of the e-filing portal

In a recent judgment, the Hon’ble High Court has set aside the reassessment order u/s 147 as the assessee could not join the link of  personal hearing through video conferencing due to technical failure of the e-filing portal

ABCAUS Case Law Citation:
ABCAUS 3975 (2024) (04) HC

In the instant case, the assessee had filed a Writ Petition before the Hon’ble High Court impugning the assessment order passed under the provisions of Section 147 read with Section 144 and 144B of the Income Tax Act, 1961 (the Act) for the assessment year 2016-17.

The case of the Petitioner was that there was violation of the principles of natural justice and denial of effective hearing to the petitioner.

The petitioner assessee had not filed his return of his income for the assessment year 2016-17 under Section 139 of the Act. The information available with the Department revealed

that the petitioner had sold an immovable property during the relevant assessment year. The Department was of the view that the capital gains earned by the petitioner in this transaction had escaped assessment for income tax under the provisions of the Act.

Therefore, a Show Cause Notice was issued to the petitioner and after fixing the hearing date(s). The petitioner filed reply to the Show Cause Notice and, thereafter order under Section 148A(d) of the Act was passed for issuing notice under Section 148 of the Act.

In response to the said notice, the petitioner filed return of his income for the assessment year in question. In the while, petitioner filed reply to the Show Cause Notice and opted for personal hearing through video conferencing.

The petitioner was provided the link for the video conferencing however, the petitioner could not join the link for technical failure on the part of the Department. However, no further opportunity was given to the petitioner and the impugned order had been passed.

Before the Hon’ble High Court, the Petitioner placed the screenshot showing error in joining the personal hearing through video conferencing link sent to him and also the e-mail sent to the Department regarding the issue that the petitioner could not log in to address the argument.

It was submitted by the Petitioner that the opportunity of hearing means ‘effective opportunity of hearing’ and that the petitioner could not log in to address the argument because of the technical failure in the website itself, there was no hearing at all. It was submitted that since there has been failure of compliance of the statutory provision of hearing as well as principles of natural justice as enshrined under Article 14 of the Constitution of India, the order suffers from inherent illegality and, therefore, it may be set aside.

The Hon’ble High Court observed that the petitioner was not given effective hearing and without providing the effective hearing the impugned assessment order had been passed. The Hon’ble High Court opined that the impugned order suffered from violation of the principles of natural justice and, therefore, the same was set aside.

The matter was remitted back to the Assessment Unit of the Income tax Department to provide fresh link to the petitioner intimating the date and time for hearing and after hearing the petitioner on the date and time fixed, the assessment order should be finalised in accordance with the law.

Accordingly, the writ petition was allowed

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