Unless request made, personal hearing not mandatory in faceless assessment – Patna HC

Unless request made, personal / oral hearing not mandatory and faceless assessment would be concluded without an oral hearing – Patna High Court

Unless request is made, the In a recent judgment, the Hon’ble Patna High Court has held that there is a specific option provided for personal hearing, which has to be ticked in the affirmative, to make the request while uploading the objection and if the option is not exercised, it amounts to a waiver.

ABCAUS Case Law Citation:
ABCAUS 4000 (2024) (05) HC

Important Case Laws relied upon:
Commissioner of Wealth-Tax Vs. Sri Jagdish Prasad Choudhary, (1995) 211 ITR 472X
State of H.P & Ors. v. Gujarat Ambuja Cement Limited & Anr.; (2005) 6 SCC 499

In the instant case, the assessee had filed a Writ Petition challenging the assessment order passed under section 143(3) of the Income Tax Act, 1961 (the Act) without affording an opportunity of personal hearing.

Relying on the Full Bench decision of the Court, the Petitioner sought a remand so that an opportunity be afforded for a proper hearing.

In the said case before the Full Bench, the dictum was laid on the provisions of Section 18(2) of the Wealth Tax Act which provided that no order shall be made under sub-section (1) unless the person concerned has been given a reasonable opportunity of being heard.

It was held by the Full Bench that the word “heard” occurring in Section 18(2) of the Wealth Tax Act means to be heard “orally” and not a mere consideration of the case as made out in the written representation. Incidentally, it was also examined whether such an oral hearing can be given only on the request of the person concerned or whether under the scheme of the Act, there is an implied obligation of the concerned authority to offer an opportunity of oral hearing. It was found on the scheme of the Wealth Tax Act, specifically sub-Section (2) of Section 18 that even without a request there is an implied obligation on the authority.

In the instant case, the Hon’ble High Court observed that keeping in view the law laid down by Full Bench, the section 144B(vii) of the Act was to be examined which provides that the assessee shall file his response to the notice referred to in clause (vi), within the time specified therein or such time as may be extended on the basis of an application in this regard, to the National Faceless Assessment Centre.

The Hon’ble High Court observed that, under the scheme of the Income Tax Act, specifically after the faceless assessment was brought into force, a request has to be made for an oral hearing. There is a specific option provided, which has to be ticked in the affirmative, to make the request while uploading the objection. Unless the request is made, the faceless assessment would be concluded without an oral hearing, which again is as per the scheme of the Act.

The Hon’ble High Court opined that dictum of the Full Bench did not apply to the case.

It was further noticed that there is a provision for appeal where all the facts can be argued in person. The appellate authority also has sufficient power to get a report from the Assessing Officer, after affording an opportunity of hearing before the Assessing Officer.

Further, the Hon’ble High Court noted the contours of the jurisdiction under Article 226 of the Constitution of India to interfere with appellable orders laid down by the Hon’ble Supreme Court. It has been held that if an assessee approaches the High Court without availing the alternate remedy, it should be ensured that the assessee has made out a strong case or that there exists good grounds to invoke the extraordinary jurisdiction.

The Hon’ble Apex Court laid down that while reiterating that Article 226 of the Constitution confers very wide powers on the High Court, it was clarified that nonetheless the remedy of writ is an absolutely discretionary remedy. The High Court, hence, can always refuse the exercise of discretion if there is an adequate and effective remedy elsewhere. The High Court can exercise the power only if it comes to the conclusion that there has been a breach of principles of natural justice or due procedure required for the decision has not been adopted.

It was stated that the High Court would also interfere if it comes to a conclusion that there is infringement of fundamental rights or where there is failure of principles of natural justice or where the orders and proceeding are wholly without jurisdiction or when the vires of an Act is challenged.

The Hon’ble High Court opined that the plea of the Petitioner of no oral hearing afforded has to be considered in the context of the option not having been exercised; which amounts to a waiver.

Accordingly, the Hon’ble High Court declined to interfere with the assessment order and dismissed the Petition but reserved the liberty of the petitioner to approach the appellate authority.

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