Writ against Faceless Assessment regarding mandatory requirements of Opportunity of Personal Hearing quashed by HC

A favorable decision for revenue where High Court of Madhya Pradesh Quashed Writ Against Faceless Assessment Order passed under Section 144B Regarding Mandatory Requirements like Grant of Opportunity of Personal Hearing.

The Relevant Text of the Order as follows:

7. Learned counsel for the assessee/petitioner submits that despite the said prayer having been made for personal hearing contained in Para 7 of the reply (at Page No. 115 of the Paper Book), no personal hearing was afforded and the impugned order was passed thereby amounting to a denial of a statutory right of personal hearing.

7.1 Close scrutiny of the text of Section 144(B)(7)(vii) reveals that the right to make oral submissions before the Assessing Authority is circumscribed by a corresponding obligation of the assessee to request for the same. The request as alleged by the petitioner to be made in Para 7 of the reply is as follows:-

“7) In view of the above facts, I hereby object to the showcase notice and proposed addition in the draft assessment order and request you to complete the assessment on returned income, and if there is any doubt I am ready through my consultant for Video-conferencing.”

8. The aforesaid express request made in the reply as reproduced above reveals that the petitioner objected to the show cause notice and the proposed addition in the draft assessment order and requested to complete the assessment on returned income and thereafter mentioned that in case of any doubt, the assessee is ready through his consultant for video conferencing.

8.1 From the aforesaid alleged request, it was left upon the Assessing Authority to grant a hearing through video conferencing in case the Assessing Officer is in doubt as regards the contention of the assessee in his reply.

8.2 A bare perusal of the impugned assessment order (Annexure P/1) reveals that notices were issued twice to the petitioner once u/S 143(2) of the IT Act through e-mail and thereafter u/S 142(1) of the Act. Both these notices were responded to by the petitioner-assessee. Both these responses were not found satisfactory and were rejected on reasons mentioned in detail in the impugned assessment order. The Assessing Authority also found that the assessee failed to provide documents supportive of his stand, thereafter, a final show-cause notice was again issued on 27.01.2021 for proposed additions of Rs.2,86,01,971/- treating it as unexplained income. The impugned order of the assessment further reveals that in response to this final show-cause notice, the assessee/petitioner has submitted details with documents of capital increased which were considered and not found satisfactory, thereafter, another show-cause notice was issued on 27.01.2021, in response to which assessee submitted certain details and documents with the capital account. After having afforded liberty as aforesaid of being heard which appears to be not only reasonable but sufficient, the Assessing Authority passed the impugned order (Annexure P/1).

9. In the conspectus of the aforesaid discussion, what comes out loud and clear is that liberty of being heard was offered to the petitioner. The decision taken by the impugned order may or may not be correct is not for this Court to dwell upon especially when the statutory appeal preferred by the petitioner is pending consideration. More so, since the petitioner did not make any specific express demand for a personal hearing, the nongrant of personal hearing by the Assessing Officer cannot lead to a case of breach of principles of natural justice (audi alteram partem) thereby enabling the petitioner to directly approach this Court under Article 226 of the Constitution especially in the face of pending statutory appeal.

10. It is trite law that in a taxing statute one has to look merely at what is clearly said in the terminology employed. There is no presumption as to a taxing statute. Nothing is to be read in and nothing implied in the text of a taxing statute. While interpreting/analyzing taxing statute one can only look at the language used. This was the view taken a century ago by Rowlatt J. in Cape Brandy Syndicate vs. Inland Revenue Commissioners.

11. In view of above, the contention of denial of reasonable liberty of being heard cannot be countenanced in law. Accordingly, this petition is dismissed with liberty to pursue the remedy of appeal availed by petitioner.

12. It is made clear that no findings on merits of the claim put up by the petitioner-assessee before the Appellate Authority have been made in this order and thus it will be open for the parties to raise all such legitimate contentions in accordance with law before the Appellate Authority.

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