Is providing a personal hearing in a faceless assessment scenario mandatory even if not asked for?
In a recent ruling, the Hon’ble Allahabad High Court underscored the significance of affording taxpayers a personal hearing, even in cases where a formal request has not been made.
Here are some of the important takeaways from the decision:
1. Section 144B(6)(vii) of the Income-tax Act, 1961, mandates that the taxpayer must be given an opportunity for a hearing regarding the proposed variation to their income.
2. When the taxpayer submits their reply to the show-cause notice, and requests an opportunity for a personal hearing, it must be provided as per section 144B(6)(viii).
3. Granting the opportunity of a personal hearing is not at the discretion of the Assessing Officer. Providing the opportunity for a personal hearing is a mandatory rule under the Act, and waiving it is an exception that the taxpayer must exercise.
4. When the taxpayer makes a specific request in terms of section 144B(6)(vii), it must be enforced on the assessing authority through the National Faceless Assessment Centre as per section 144B(6)(viii).
5. The provision cannot be interpreted to mean that a personal hearing may be granted only if the taxpayer specifically requests it.
6. The word “request” used under section 144B(6)(vii) and (viii) only implies that, where a taxpayer submits a written reply to the show-cause notice but does not choose to have a personal hearing, the Assessing Officer may not be required to grant such an opportunity if he intends to accept the taxpayer’s explanation.
7. However, if the Assessing Officer maintains their tentative opinion to pass the assessment order as proposed after reading the explanation furnished by the taxpayer, which may be adverse to the taxpayer, they must set a date for a personal hearing and communicate it to the taxpayer through electronic mode as provided under the Act.
8. Assessment proceedings involve disputed questions of facts and law. Therefore, for an effective discussion to arise and a reasoned conclusion to be drawn by the Assessing Officer, an oral hearing remains an important and near-mandatory requirement to ensure both the requirement to pass a just and proper judicial or quasi-judicial order and to preserve the faith in the adjudicatory authorities.
The copy of the order is as under:
