Assessment — Faceless assessment — Grant of personal hearing where there is variation of income and requested by assessee — Failure to grant personal hearing requested by assessee on passing of draft assessment order — Assessment order and consequential demand and penalty notices set aside — Matter remanded to AO to grant personal hearing through video conferencing

Assessment — Faceless assessment — Grant of personal hearing where there is variation of income and requested by assessee — Failure to grant personal hearing requested by assessee on passing of draft assessment order — Assessment order and consequential demand and penalty notices set aside — Matter remanded to AO to grant personal hearing through video conferencing

The assessee was in real estate business. For the A.Y. 2018-19, a notice was issued against the assessee proposing to make addition to its income. The assessee filed a response and sought personal hearing through video conferencing. Another notice was served with the draft assessment order reducing the addition in response to which the assessee filed a detailed reply with documents and again sought a personal hearing through video conferencing to explain the issues which were complex in nature to the Assessing Officer in correct perspective with the layout plan, the disputed land and the towers which were incomplete. However, no personal hearing was allowed and assessment order was passed u/s 143(3) read with section 144B of the Income-tax Act, 1961 enhancing the income and consequential demand and penalty notices were issued.

The Delhi High Court allowed the writ petition filed by the assessee and held as under:

“Section 144B(7) of the Income-tax Act, 1961 provides an opportunity for a personal hearing, if requested by the assessee. As the option to opt for personal hearing was not enabled, the assessee due to technical glitches could not request for personal hearing on the e-portal. Consequently, it could not be said that the assessee did not opt for personal hearing. Therefore, the assessment order passed u/s. 143(3) read with section 144B and the consequential demand and penalty notices were set aside.”

The matter was remanded back to the Assessing Officer to grant an opportunity of personal hearing to the assessee through video conferencing.