Smt K B Bhagyamma V. National Faceless Assessment Centre

WP/16799/2022

AI Insights

The case involves Smt K B Bhagyamma, the petitioner, challenging various orders and notices issued by the National Faceless Assessment Centre related to her income tax assessment. The petitioner argued that she was denied a personal hearing, which is her right under Section 144B(7)(vii) of the Income Tax Act, 1961, especially after she had requested one through her representations. The respondent contended that the personal hearing could be conducted via video conferencing, as per the norms of the National Faceless Assessment Centre. The court found that the petitioner's request for a personal hearing should have been honored and that the proceedings were vitiated by not providing this opportunity.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 798530 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 28-06-2023
• Assessment Year: misc
• Laws Referred To: Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: RAGHAVENDRA HANJER
• Keywords: Assessment Order; Faceless assessment; Income Tax; Personal hearing; Writ petition
• Section: 226; 227; 144B(7)(vii); 144B(7)(viii); 144B(7)(vi)

Judgement Text

" - 1 - NC: 2023:KHC:22505 WP No. 16799 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JUNE, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 16799 OF 2022 (T-IT) BETWEEN: 1. SMT K B BHAGYAMMA W/O LATE SRI SAMPANGIRAMAIAH AGED ABOUT 68 YEARS OCCUPATION: HOUSE WIFE NO.596, BEHIND MIDDLE SCHOOL NEW EXTENSION KADUGODI BANGALORE-560 067 … PETITIONER (BY SRI. RAGHAVENDRA B. HANJER, ADVOCATE) AND: 1. NATIONAL FACELESS ASSESSMENT CENTRE REPRESENTED BY THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER INCOME TAX DEPARTMENT ROOM NO.401, 2ND FLOOR E-RAMP, JAWAHARLAL NEHRU STADIUM NEW DELHI-110 003 … RESPONDENT (BY SRI. M. DILIP, ADVOCATE) Digitally signed by B K MAHENDRAKUMAR Location: High Court of Karnataka - 2 - NC: 2023:KHC:22505 WP No. 16799 of 2022 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ASSESSMENT ORDER DTD.19.4.2021 (PRODUCED AT ANNEXURE-'A') PASSED BY THE RESPONDENT, COMPUTATION SHEET BEARING DOCUEMENT DTD.19.4.2021 (PRODUCED AT ANNEXURE-'B') THE DEMAND NOTICE BEARING DTD.19.4.2021 (PRODUCED AT ANNEXURE-'C') ISSUED BY THE RESPONDENT AND THE SHOW CAUSE NOTICE DTD.19.8.2021 (PRODUCED AT ANNEXURE-'D') ISSUED BY THE RESPONDENT AND THEREBY AND ETC. THIS WRIT PETITION COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has sought for setting aside of the Assessment Order at Annexure-'A' dated 19.04.2021, Computation Sheet at Annexure-'B' dated 19.04.2021, Demand Notice at Annexure-'C' dated 19.04.2021 and Show Cause Notice at Annexure-'D' dated 19.08.2021 issued by the respondents. The petitioner has specifically sought for issuance of direction to the respondents to grant an opportunity of fixing hearing to the petitioner as per their representations at Annexures - 'P' and 'R'. 2. Learned counsel appearing for the petitioner draws attention to the Assessment Order at Annexure-'A' - 3 - NC: 2023:KHC:22505 WP No. 16799 of 2022 dated 19.04.2021 to the observations made at para-4 which reads as follows:- \"…During the course of proceedings, the assessee sought personal hearing to say about the land as and when she faced legal notices, and ultimately after winning of legal battles she acquired the rights of all natures on the plot. However, after going through the documents and submissions which were furnished by the assessee, I found that I am in a position to made my mind to complete assessment, and no personal hearing is required to her. …\". 3. It is submitted that, eventually the expenditure was disallowed and addition was made in the course of the assessment proceedings. It is contended that the procedure under Section 144B(7)(vii) of the Income Tax Act, 1961 ('I.T. Act' for brevity) provides an opportunity of personal hearing to the petitioner. Therefore, it is submitted that the proceedings having been concluded without affording an opportunity of personal hearing is - 4 - NC: 2023:KHC:22505 WP No. 16799 of 2022 vitiated, as it is contrary to the provisions of Section 144B of the I.T Act. 4. Learned counsel appearing for the respondent submits that since the assessment is of National Faceless Assessment Centre, the words 'personal hearing' in Section 144B(7)(vi) and (vii) must be construed as only an opportunity of hearing through Video Conferencing and also refers to Section 144B(7)(viii). 5. It is seen that the petitioner has made specific request for personal hearing in terms of the representations at Annexures-'P' and 'R'. A perusal of Section 144B(7)(vi) and (vii) makes the position clear. The said provision reads as hereunder:- \"144B. xxx (7) For the purposes of faceless assessment.- xxx (vi) a person shall not be required to appear either personally or through authorized representative in connection with - 5 - NC: 2023:KHC:22505 WP No. 16799 of 2022 any proceedings before the income-tax authority at the National Faceless Assessment Centre or Regional Faceless Assessment Centre or any unit set up under this sub-section; (vii) in a case where a variation is proposed in the draft assessment order or final draft assessment order or revised draft assessment order, and an opportunity is provided to the assessee by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the such draft or final draft or revised draft assessment order, the assessee or his authorized representative, as the case may be, request for personal hearing so as to make his oral submissions or present his case before the income-tax authority in any unit;.\" 6. It is clear that, if variation is proposed in the income, there must be an opportunity afforded to the petitioner, who is the assessee or his representative, if request for personal hearing has been made to present his case. Accordingly, in the present case, the disallowance - 6 - NC: 2023:KHC:22505 WP No. 16799 of 2022 of expenditure claimed falls within the aspect covered under Clause (vii) of Section 144B(7) and accordingly, the petitioner's request for personal hearing ought to have been honoured. An opportunity of physical hearing will have to be read in terms of Section 144B(7)(viii) and the respondent Authority has to afford an opportunity in terms of Section 144B(vii) of the I.T. Act. 7. Accordingly, the order at Assessment Order at Annexure-'A' dated 19.04.2021, Computation Sheet at Annexure-'B' dated 19.04.2021, Demand Notice at Annexure-'C' dated 19.04.2021 and Show Cause Notice at Annexure-'D' dated 19.08.2021 are set aside and the matter is remanded to the stage of post reply to the Show Cause Notice. The petitioner's request in terms of Annexures-'P' and 'R' require to be honoured. 8. In light of the discussion made hereinabove, petition is disposed off. The petitioner is at liberty to - 7 - NC: 2023:KHC:22505 WP No. 16799 of 2022 produce such evidence as may be required to substantiate his reply. All contentions are kept open. Sd/- JUDGE VGR "