The obligation of the respondent to consider the request for grant of personal hearing under Section 144B (7) and the violation of the principle of natural justice led to setting aside the assessment order.

JUDGMENT

Manmohan, J. - The petition has been heard by way of video conferencing.

2. Present writ petition has been filed challenging the Assessment Order dated 21st April 2021 passed by the Respondent and seeking directions thereby prohibiting the Respondent from collecting the demand raised by the Respondent.

3. Learned counsel for the Petitioner states that the impugned assessment order is challenged on the ground of violation of principle of natural justice as no Video Conferencing or oral hearing opportunity was provided to petitioner despite specific request made vide communication dated 21st April 2021 as mandated in relevant statutory norms and Central Board of Direct Taxes (CBDT) instructions. He emphasises that serious injustice has been caused to petitioner by not providing a fair opportunity of Video Conferencing to the petitioner or oral hearing, prior to closure/finalization of impugned tax assessment.

4. He points out that the petitioner has no other efficacious alternative remedy but to approach this Court and relies on the Supreme Court judgment in the case of Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd in Civil Appeal No. 8129 of 2019 amongst others.

5. Issue notice.Mr. Ruchir Bhatia, Advocate accepts notice on behalf of Department of Revenue.

6. Mr.Bhatia states that the expression used in clause (vii) of sub-section (7) of Section 144B is 'may' and not 'shall' and therefore, there is no vested right in the petitioner to claim a personal hearing.

7. Having heard learned counsel for the parties, this Court is of the view that Section 144B (7) provides for a personal hearing. The relevant portion of Section 144B (7) is reproduced hereinbelow:-

"144B. Faceless assessment

(1) xxx xxx xxx

(7) For the purposes of faceless assessment-

xxx xxx xxx

(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 authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the income-tax authority in any unit;

(viii) the Chief Commissioner or the Director General, in charge of the Regional Faceless Assessment Centre, under which the concerned unit is set up, may approve the request for personal hearing referred to in clause (vii) if he is of the opinion that the request is covered by the circumstances referred to in sub-clause (h) of clause (xii);

xxx xxx xxx

(xii) the Principal Chief Commissioner or the Principal Director General, in charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre, Regional Faceless Assessment Centres and the unit set up, in an automated and mechanised environment, including format, mode, procedure and processes in respect of the following, namely:-

xxx xxx xxx

(h) circumstances in which personal hearing referred to clause

(viii) shall be approved;

xxx xxx xxx"

8. The learned Predecessor Division Bench in Sanjay Aggarwal v. National Faceless Assessment Centre Delhi in W.P. (C) 5741/2021, while interpreting aforesaid section has held as under:-

"11.4. A careful perusal of clause (vii) of Section 144B (7) would show that liberty has been given to the assessee, if his/her income is varied, to seek a personal hearing in the matter. Therefore, the usage of the word 'may', to our minds, cannot absolve the respondent/revenue from the obligation cast upon it, to consider the request made for grant of personal hearing. Besides this, under sub-clause (h) of Section 144B (7)(xii) read with Section 144B (7) (viii), the respondent/revenue h