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Facts
The assessee purchased a property, and the AO made an addition of Rs. 27,52,500 under Section 56(2) for AY 2018-19, representing the difference between the stamp duty value and the declared purchase consideration. This addition was upheld by the Ld. Commissioner. The assessee challenged this decision, arguing that the AO failed to provide a personal hearing via Video Conferencing, violating principles of natural justice.
Held
The Tribunal found that the failure to provide a Video Conferencing facility for a personal hearing, despite specific requests, constituted a violation of natural justice and CBDT guidelines, citing a relevant High Court judgment. It held that such an omission renders the assessment order invalid. Therefore, the orders of the lower authorities were set aside, and the case was remanded to the AO for a fresh decision after affording a reasonable opportunity of hearing to the assessee.
Key Issues
Whether the failure to provide a personal hearing through Video Conferencing, despite requests, constitutes a violation of natural justice, thereby rendering the assessment order invalid.
Sections Cited
250, 56(2), 142(1)
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Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH :: NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY
This appeal has been preferred by the Assessee against the order dated 26/12/2023 impugned herein passed by the National Faceless Appeal Centre (NFAC)/Commissioner of Income Tax (Appeals), Delhi (in short, ‘Ld. Commissioner’) u/sec. 250 of the Income Tax Act, 1961 (in short, ‘Act’) for the A.Y. 2018-19.
(Ramratan Sahebrao Pundkar) 2. At the outset, it is observed that there is a delay of 130 days in filing the instant appeal. The Assessee by filing a condonation application along with duly sworn affidavit dated 02/07/2024 prayed for condonation of delay. Considering the reasons assigned by the Assessee, appears to be genuine, bonafide and unintentional, hence, delay of 130 days in filing the appeal is condoned.
In the instant case, the Assessing Officer (AO) by assessment order dated 19/04/2021 made the addition of Rs. 27,52,500/- being difference between the stamp duty value of the property at Rs. 62,52,500/- as per the stamp authority and the purchase consideration declared by the Assessee to the tune of Rs. 35 Lac u/sec. 56(2) of the Act.
The Assessee, being aggrieved challenged the said addition before the Ld. Commissioner, who by considering the value determined by Departmental Valuation Officer (DVO), affirmed the addition made by the Ld. Ld. AO.
The Assessee, being aggrieved, challenged the decision of Ld.Commissioner before this Court. The Assessee, at the outset, demonstrated the fact that Ld.AO during the assessment proceedings, despite asking specifically to provide Video Conferencing facility, not afforded the same and thus, violated the (Ramratan Sahebrao Pundkar) principles of natural justice and/or guidelines laid down by the CBDT. Further, Ld. Commissioner as well, in the impugned order though mentioned that the Assessee had sought for Video Conferencing facility, however, held that Assessee cannot challenge the assessment order only on the basis that he was not provided personal hearing through Video Conferencing, as the Assessee was granted various opportunities by sending notices u/sec. 142(1) of the Act.
This Court has given thoughtful consideration to the peculiar facts and circumstances of the case and specifically to the issue with regard to not affording the opportunity of hearing through Video Conferencing, which is a violation of relevant notifications issued by CBDT from time to time as held by the Hon'ble Gujarat High Court in the case of in Tyger Capital Pvt. Ltd. vs. Assessment Unit, Income Tax Department & Anr. 2025 (8) TMI 386, holding that “if the assessee is not granted mandatory requirement of video conference for personal hearing, it would amount to breach of principles of natural justice”, consequently held that “the authorities have failed to follow the mandatory requirement of the Standard Operating Procedure, and therefore, the impugned Assessment Order as well as the demand notice, would not stand at all”.
(Ramratan Sahebrao Pundkar) 7. Thus, in view of the aforesaid analyzations, the orders passed by the authorities below are set aside and the case is remanded to the file of Ld. AO for decision afresh, suffice to say by affording reasonable opportunity of hearing to the Assessee.
In the result, Assessee’s appeal is allowed for statistical purpose.
Order pronounced in open court on 23.09.2025 as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963.