Facts of the Case

The Petitioner, Subodh Gupta, filed writ petitions concerning Assessment Years 2015–16 and 2016–17 challenging assessment orders dated 30.05.2023 and 31.05.2023 passed by the Assessing Officer.

The dispute originated from show cause notices dated 11.05.2023 proposing variation in income. A personal hearing was scheduled via video conferencing on 22.05.2023. However:

  • The Assessing Officer did not join the hearing on the scheduled time.
  • A fresh hearing was fixed on 24.05.2023.
  • During the hearing, audio malfunction occurred, resulting in ineffective communication, and interaction took place only through chat.

Subsequently, assessment orders were passed without effective hearing, which led to the filing of writ petitions on the ground of violation of principles of natural justice 

Issues Involved

  1. Whether assessment orders passed without effective personal hearing due to technical glitches violate principles of natural justice.
  2. Whether such assessment orders are liable to be set aside.
  3. Whether a fresh opportunity of hearing must be granted before passing assessment orders 

Petitioner’s Arguments

  • The Petitioner contended that there was a clear breach of natural justice.
  • The hearing conducted through video conferencing was ineffective due to absence of audio, making proper representation impossible.
  • The assessment orders were passed without granting meaningful opportunity of hearing.
  • Thus, the orders deserved to be quashed 

Respondent’s Arguments

  • The Revenue, upon instructions from the Assessing Officer, acknowledged that audio disruption had indeed occurred.
  • It was admitted that due to the technical glitch, effective hearing did not take place.

Court Findings / Order

  • The admitted position was that the hearing suffered from audio disruption, resulting in lack of effective opportunity.
  • This amounted to a breach of principles of natural justice.

Order Passed:

  • Assessment Orders dated 30.05.2023 and 31.05.2023 were set aside.
  • The Assessing Officer was granted liberty to:
    • Pass fresh assessment orders, and
    • Provide proper personal hearing to the petitioner.
  • The AO was directed to:
    • Issue fresh notice,
    • Specify date and time of hearing,
    • Ensure effective opportunity of representation.

The writ petitions were disposed of accordingly.

Important Clarification

  • Even in virtual hearings, effective communication is essential.
  • Technical glitches (such as absence of audio) invalidate the hearing process.
  • Mere scheduling of hearing is not sufficient; meaningful participation must be ensured.
  • This judgment reinforces that procedural fairness is mandatory, irrespective of the mode of hearing.

Sections Involved

  • Section 143(3), Income Tax Act, 1961 – Assessment
  • Principles of Natural Justice – Right to fair hearing (Audi Alteram Partem)

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60801092023CW94712023_175855.pdf

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