The court held that failure to grant a personal hearing, when requested, violates principles of natural justice, rendering the assessment order invalid under Section 144B.

JUDGMENT

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

2. Present writ petition has been filed challenging the Assessment Order dated 09th June 2021 passed by the Respondents under Section 143(3) read with Section 144B of the Act for Assessment Year [AY] 2018-19 as well as notice of demand issued under Section 156 of the Act and all proceedings initiated pursuant thereto.

3. Learned counsel for the Petitioner states that the impugned order dated 09th June 2021 passed under Section 143(3) read with Section 144B of the Act, for the assessment year 2018-19 is without jurisdiction, arbitrary, illegal and deserves to be quashed. He states that the impugned order dated 09th June 2021 was passed without affording personal hearing, even when, specifically requested by the Petitioner and hence, the impugned order is violative of the principles of natural justice and Section 144B of the Act.

4. He points out that as against the draft assessment order dated 08th April 2021, the Petitioner had filed a response, therefore in terms of clause (xxiii)(b) of section 144B, the response was required to be sent to the assessment unit and the assessment unit was to pass a revised draft order. He contends that the Revised draft order under clause (xxiv) to section 144B of the Act was not prepared. He emphasises that the final assessment order is virtually a copy of draft assessment order dated 08th April 2021.

5. Issue notice. Mr. Sunil Agarwal, learned senior standing counsel accepts notice on behalf of respondents. He submits that the expression used in clause (vii) of sub-Section (7) of Section 144B of the Act is `may' and not `shall' and therefore, there is no vested right in the petitioner to claim a personal hearing.

6. Having heard learned counsel for the parties, this Court is of the view that Section 144B (7) provides for an opportunity of personal hearing, if requested, by the assessee. The relevant portions of Section 144B (7) and Section 144B (9) are reproduced hereinbelow:

"144B. Faceless assessment-

(1) xxxx xxxx xxxx xxxx

(7) For the purposes of faceless assessment-

xxxx xxxx xxxx xxxx

(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);

xxxx xxxx xxxx xxxx

(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:

xxxx xxxx xxxx xxxx

(h) circumstances in which personal hearing r