CRESCENT INDIA MEDICAL EDUCATION TRUST ,PUNE vs. AO/DY CIT, PUNE

Findings and analysis: We have heard both the parties and perused the records. In this case, the assessee trust had filed return of income for AY 2023-24 on 29.11.2023 declaring total income at Rs.Nil. During the assessment proceedings, the Assessing Officer (AO) observed that the assessee had paid Rs.50,00,000/- to an entity Acumen Consulting Inc., outside India. The AO issued show cause notice to the assessee. The Ld. AR admitted that the assessee had not taken permission from Income Tax Department u/s 11(1)(c) of the Act. Therefore, during the assessment proceedings, the assessee admitted that it was an inadvertent mistake. The assessee filed

Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee took a ground which is as under : “5. AO failed to give opportunity for personal hearing via Video despite request thereby contravention of the principle of natural justice therefore impugned assessment order be set aside.”

Aggrieved by the order of the Ld. CIT(A), the assessee filed an appeal before this Tribunal. Even before us, the assessee has raised ground No. 5 which is as under : “5. Violation of natural justice: The lower authorities failed to grant a personal hearing via video conference despite explicit request, violating the mandatory safeguards of Section

It is an accepted fact that opportunity of personal hearing via Video Conferencing was not provided to the assessee. The assessee had requested for personal hearing.

The Hon’ble Delhi High Court in the case of Balraj Hire Purchase (P.) Ltd. Vs. National Faceless Assessment Centre, [2021] 128 taxmann.com 190 (Delhi) held as under : Quote, “9.2 In the instant case, it would be relevant to note that the petitioner had its taxable income as Rs.81,570/-. Via the impugned assessment order, the petitioner's taxable income has been assessed at Rs.2,89,67,727/-. Thus, there is a substantial variation made by the AO in the taxable income of the petitioner. Therefore, in our view, the petitioner ought to have been granted a personal hearing in the matter. The failure to grant a personal hearing has vitiated the impugned assessment order. 10. Accordingly, the impugned assessment order dated 27-5-2021 is set aside. 10.1 Liberty is, however, given to the AO to pass a fresh assessment order. The AO will grant a personal hearing to the authorised representative of the petitioner before passing the fresh assessment order. For this purpose, the AO will issue a written notice to the petitioner setting out therein, the date and time of the hearing. The AO will conduct the personal hearing via video- conferencing (in short 'VC') mechanism, and transmit the VC link, in that behalf, to the petitioner. 10.2 The AO will pass the fresh assessment order after taking into account abovementioned reply dated 17-3-2021, filed by the petitioner. 10.3 In case, petitioner's authorized representative wishes to file written submissions, liberty in that behalf will be granted by the AO. Needless to add, the said submissions will be considered by the AO. 11. The writ petition and pending application are disposed of in the aforesaid terms. The case papers shall stand consigned to the record.” Unquote.

Similarly, the Hon’ble Delhi High Court in the case Sanjay Aggarwal Vs. National Faceless Assessment Centre, Delhi, [2021] 127 taxmann.com 637 (Delhi) has held as under : Quote, “12. Therefore, in our view, given the aforesaid facts and circumstances, it was incumbent upon the respondent/revenue to accord a

Similarly, the Hon’ble Bombay High Court in the case of Piramal Enterprises Ltd. Vs. ACIT, 129 taxmann.com 18 (Bom.) has also held that if the assessee asked opportunity for personal hearing then it has to be provided.

In the case of the assessee, the assessee had requested for personal hearing, however, no personal hearing was granted. Therefore, respectfully following the judicial precedents of the Hon’ble Delhi High Court and the Hon’ble Bombay High Court, we set aside the assessment order to the AO for de-novo adjudication. The AO shall provide opportunity of personal hearing to the assessee. The assessee shall be at liberty to file necessary details. The AO shall be at liberty to enquire/verify the documents filed by the assessee and if required may call for further documents.

In the result, the appeal of the assessee is allowed for statistical purpose.