Personal hearing can't be denied in faceless assessment: Delhi HC

In a case related to Umkal Healthcare vs National Faceless Assessment Centre, court set aside demand notice of tax dept given to the company as the request of personal hearing wasn't accepted

The Delhi High Court has ruled that the tax authorities have to grant a personal hearing to an assessee if he demands so before passing an order to raise additional demand under the faceless assessment scheme.

In a case related to Umkal Healthcare Ltd versus National Faceless Assessment Centre, the court set aside the demand notice of tax authorities given to the company as the request of personal hearing was not accepted.

The court remanded back the matter to the assessing officer.

The court said the officer shall grant an opportunity of hearing to the company by way of video conferencing and thereafter pass a reasoned order in accordance with law, Sandeep Sehgal, Director- Tax and Regulatory, AKM Global, a tax and consulting firm, said while informing about the order.

The tax authorities argued that the law prescribed that personal hearing "may be and not shall be" granted and as such there is no vested right in the petitioner to claim it.

However, the court ruled that it was incumbent upon the tax authorities to accord a personal hearing to the assessee.

The court said there is a violation of principles of natural justice as well as mandatory procedure prescribed in the faceless assessment scheme and stipulated in section 144B of the Income Tax Act.

Sehgal said,“the faceless assessment was introduced with the objective of enabling transparent and fair tax assessments. However, in the process, there have been several instances where the revenue has proceeded ahead without adhering to the principles of natural justice."