Faceless Assessment: The word ‘may’ u/s 144B(7) of I-T Act cant absolve Revenue from obligation to consider taxpayer’s request for personal hearing, says Delhi HC

Read Judgement: NARESH KUMAR GOYAL v. NATIONAL FACELESS ASSESSMENT CENTRE & ORS 

LE Staff

New Delhi, July 23, 2021: The Delhi High Court recently ruled that liberty has been given to an assessee under clause (vii) of Section 144B (7) of Income tax Act, if his/her income is varied, to seek a personal hearing in the matter. 

The Division Bench of Justice Manmohan and Justice Navin Chawla observed that the word ‘may’ under section 144B(7), cannot absolve the Revenue from the obligation cast upon it to consider the request made by a taxpayer for grant of personal hearing.

The petitioner (taxpayer) in the present case had challenged the Assessment order passed without granting an opportunity for personal hearing as envisaged u/s 144B(7)(vii) of the Act even though it was specifically sought by the taxpayer in response to show cause notice issued by the I-T Department.

The counsel for the Revenue Department contended 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 assessee to claim a personal hearing. 

However, the High Court opined that Section 144B (7) provides for a personal hearing. 

“The Predecessor Division Bench in Sanjay Aggarwal v. National Faceless Assessment Centre Delhi, while interpreting said section has held that 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,” said the Bench. 

Besides this, under sub-clause (h) of Section 144B (7)(xii) read with Section 144B (7) (viii), the revenue has been given the power to frame standards, procedures and processes for approving the request made for according personal hearing to an assessee who makes a request qua the same, reiterated the High Court. 

Therefore, keeping in view the facts and mandates of law, the assessment order as well as notice of demand and penalty notice were set aside and the High Court remanded the matter back to the AO for re-adjudication.