Opportunity Of Personal Hearing Was Not Availed Due To Technical Glitches And For Such Fault, Taxpayer Cannot Be Made To Suffer: Calcutta HC

While granting relief to Bangabasi College (petitioner), the Calcutta High Court quashed the assessment order as well as the penalty notice issued to the college by the Income Tax authorities.

Finding that no incontestable evidence was provided by the respondent authority to show that the request of the petitioner for providing opportunity of personal hearing by video conferencing was complied with or that the request of the petitioner was considered after pointing out such technical fault in the system, the High Court remanded the matter to the concerned assessing officer to pass a fresh assessment order in accordance with law after giving an opportunity of hearing to the petitioner through video conferencing by providing a proper link.

A Single Judge Bench of Justice Rajarshi Bharadwaj observed that “The opportunity of personal hearing could not be availed due to technical difficulties and for such technical fault, the petitioner cannot be made to suffer”.

Advocate Subash Agwarwal appeared for the Petitioner, whereas Advocate Smita Das De appeared for the Respondent. 

Briefly, the petitioner was a West Bengal Government aided college, duly affiliated under the University Grants Commission and Calcutta University. It had approached the High Court seeking to challenge the assessment order issued under Section 147 read with Section 144B of the Income Tax Act, along with the penalty notice under Section 274 of the Act.

After considering the submission, the Bench observed that the assessment order dated Mar 18, 2023 adversely affected the interests of the petitioner, since the petitioner's inability to engage in a personal hearing was attributed to technical issues.

Therefore, since the inability of the petitioner to appear through virtual mode was not attributable to them, the Bench stated that the petitioner could not be penalized for such technical glitches.

Notably, the Income Tax authority had failed to present conclusive evidence demonstrating that the petitioner's plea for a video conferencing-based personal hearing was acknowledged and acted upon, particularly after highlighting the technical fault within the system, added the Bench.

Referring to Administrative Circular No. 14(XL-35) dated Apr 11, 1995 to guide the Income Tax Officers on assessment matters, the Bench highlighted that though the petitioner was a government-aided institution affiliated with Calcutta University and availing relief under Section 10(23C) of the Income Tax Act, the petitioner however, was not conversant with the Income Tax ‘e-proceeding facility’.

The situation being such, the Bench remarked that the Income Tax Authority was expected to empathize with the petitioner’s plight considering departmental Circular No. 14(XL-35) dated Apr 11, 1995.

Accordingly, the High Court remanded the matter to the concerned assessing officer to pass a fresh assessment order after giving an opportunity of hearing to the petitioner through video conferencing by providing a proper link.

Cause Title: Bangabasi Collage v. Union of India and Ors.

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