Denial of a personal hearing in income assessment cases under Section 144B(6)(vii) violates natural justice, necessitating the assessment order's cancellation.

JUDGMENT

[Physical Hearing/Hybrid Hearing (as per request)]

Rajiv Shakdher, J. (ORAL):

1. The record shows, that on 22.10.2021, this matter was heard by one of us [i.e., Rajiv Shakdher, J.] sitting with Hon'ble Mr Justice Talwant Singh.

1.1. On that date, the broad contours of the controversy arising in the matter were etched out. For the sake of convenience, the relevant part of the said order is extracted hereafter:

"3. Via this writ petition, in effect, challenge is laid to the assessment order dated 28.09.2021, for the assessment year (AY) 2017-18.

3.1. Mr. Jayant Mehta, learned senior counsel, who appears for the petitioner, has drawn our attention, inter alia, to paragraph nos. 8 and 8.1 of the impugned order.

3.2. For the sake of convenience, the said paragraphs of the impugned assessment order, are extracted hereafter:

"8. A showcause notice was issued to the assessee on 22/09/2021 along with Draft Assessment Order for compliance on 24/09/2021. The assessee has given the reply to showcause notice on 23/09/2021 along with Statement of Sales partywise above 5 Lakhs with address and TIN Number, Statement of partywise purchases above 5 Lacs with address and PAN/TAN No., List of Debtors, Form 26AS, screen shot from website, List of Creditors, Purchase of raw material partywise and (i) reply letter dated 16/08/2021 to Notice u/s. 142(1), dated 14/08/2021, (ii) reply letter dated 23/09/2021 to showcause notice, dated 22/09/2021 & (iii) reply letter dated 5/09/2021 to Notice u/s. 142(1) dated 3/9/21. The assessee's representative Ankit P. Jain & Co., CAs vide letter dated 22/09/2021 in reply to showcause notice has given the statement of opening and closing stock for the last three year and further stated that, "It is requested to allow video conferencing for some crucial discussion in the matter and allow some time to arrange more documents as asked in the letter. It is also requested to keep the provisional Assessment under abeyance and do not add any income till the Assessment is complete and also requested to complete regular Assessment as being undertaken by you as the Income Tax Portal is not working Properly. "

8.1 The above request of the assessee could not be granted due to paucity of time as the time barring date is 30/09/2021. The assessee was accorded various opportunities to give the submissions but the assessee has not given any reply. The onus was on the assessee to give valid proof against the reopening proceedings to prove that the discrepancies pointed out by the complainant in his books of accounts are not correct. The assessee would have given his submission and supporting documents well in advance after first Notice u/s. 142(1) was issued to the assessee on 29/01/2021 and also, the assessee would have given his reply with the supporting documents on 13/02/2021 when the assessee company has given part reply."

3.3. A perusal of the aforementioned extract from the impugned assessment order shows that, although, personal hearing was sought, the same was declined only on account of paucity of time, as the end date for passing the assessment order was expiring, on 30.09.2021.

4. Given the foregoing, prima facie, we are of the view that, there is a case for interference, as there has been a breach of the principles of natural justice.

5. Issue notice.

5.1 Ms. Easha Kadian, Advocate, who appears for Mr. Sanjay Kumar, learned standing counsel, accepts notice on behalf of respondents/revenue.

5.2. Counter-affidavit will be filed within four weeks from today.

5.3. Rejoinder thereto, if any, will be filed before the next date of hearing.

6. Although, there is no separate application for grant of interim relief, t