Facts of the Case

The petitioner, Subodh Gupta, challenged assessment orders for Assessment Years 2015–16 and 2016–17. The challenge was limited to violation of principles of natural justice.

  • Show cause notices dated 11.05.2023 proposed variation in income.
  • Personal hearing was scheduled through video conferencing on 22.05.2023.
  • The Assessing Officer failed to join the hearing initially.
  • A fresh hearing was scheduled on 24.05.2023.
  • During the hearing, audio disruption occurred, forcing communication through chat instead of proper oral hearing.
  • Subsequently, assessment orders dated 30.05.2023 and 31.05.2023 were passed without effective hearing. 

Issues Involved

  1. Whether disruption in virtual hearing amounts to denial of proper opportunity of hearing.
  2. Whether assessment orders passed without effective hearing violate principles of natural justice.
  3. Whether such procedural defect vitiates the entire assessment proceedings. 

Petitioner’s Arguments

  • There was a clear breach of natural justice due to ineffective hearing.
  • The video conferencing hearing was not properly conducted due to:
    • Non-availability of the Assessing Officer initially
    • Audio malfunction during the rescheduled hearing
  • Communication via chat cannot substitute a proper hearing.
  • Hence, assessment orders were liable to be quashed. 

Respondent’s Arguments

  • The Revenue sought instructions from the Assessing Officer.
  • It was admitted that audio disruption did occur, resulting in ineffective hearing. 

Court’s Findings / Order

  • Effective hearing is a fundamental requirement under principles of natural justice.
  • The admitted audio disruption meant no proper opportunity of hearing was granted.
  • Therefore, the assessment proceedings stood vitiated.

Order

  • Assessment orders dated 30.05.2023 and 31.05.2023 were set aside.
  • The Assessing Officer was granted liberty to:
    • Pass fresh assessment orders
    • After granting proper personal hearing
  • The writ petitions were disposed of accordingly.

Important Clarification by Court

  • Virtual hearings must ensure effective participation, not mere procedural compliance.
  • Technical glitches that prevent meaningful hearing invalidate proceedings.
  • Authorities must provide a fair and real opportunity, not an illusory one.

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

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