In Faceless assessments, if the AO does not agree with the explanations provided by the assessee, an opportunity for personal hearing is mandatory: Allahabad HC
M/S Ara India Llp vs National Faceless Assessment Centre (WP No 698 of 2024)
Facts:
- The case of the Petitioner was that the impugned assessment order had been passed by the NFAC without considering that request for personal hearing.
- The Revenue opposed the Writ on the ground of availability of statutory alternative remedy of appeal.
Hon Allahabad HC observed and held as below:
- Section 144B of the Income Tax Act [by virtue of sub-Section 6(vii) and (viii)] mandates opportunity of hearing to be given to the petitioner upon show-cause notice issued to show-cause why assessment may not be completed as proposed. Further, if at the time of submission of his reply to the show-cause notice, the assessee “requests” for opportunity of personal hearing, the same is necessary to be provided.
- For the purpose of an effective discussion to arise and a reasoned conclusion to be drawn thereafter by the Assessing Officer, oral hearing remains an important and near about mandatory requirement to be fulfilled to ensure both, the requirement to pass a just and proper judicial or quasi judicial order and also to preserve the faith in the adjudicatory authorities.
- While it is not in doubt that the appeal authority has all powers of Assessing Officer, at the same time, it is not the Scheme of the Act to require the job of the Assessing Authority to be routinely performed by the First Appeal Authority.
- If on reading the explanation furnished, the Assessing Officer maintains his tentative opinion to pass the assessment order as proposed, that may be adverse to the assessee, he would necessarily fix a date for personal hearing and communicate the same to the assessee, through electronic mode (as provided under the Act).
- So, AO should necessarily fix a date for personal hearing, where explanation of assessee towards proposed variations is not acceptable.
The copy of the order is as under:
M_S_Ara_India_Llp_vs_National_Faceless_Assessment_Centre_on_6_May_2024
