Violation of Faceless Hearing Rights

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Gujarat High Court Quashes Assessment


AO's Failure to Grant Video Conferencing Opportunity Leads to Remand.

The **Faceless Assessment Scheme** under Section 144B of the Income-tax Act, 1961, guarantees the taxpayer a specific mechanism for interaction: hearing through video conferencing. In a recent significant ruling, the Gujarat High Court emphasized that denying this opportunity—even when specifically requested—constitutes a clear breach of principles of natural justice, rendering the resulting assessment order void.

Case Background and Legal Breach

  • The Issue: The assessee's return for AY 2023-24 was selected for scrutiny. A Show Cause Notice proposed disallowance of expenses/loss from the sale of VDA assets.
  • Assessee’s Request: The assessee provided a detailed response and specifically requested a hearing through video conferencing, as permissible under Section 144B.
  • AO’s Action: An assessment order was passed by the National E-Assessment Centre, making the addition and raising the demand, but **without granting the requested video conferencing opportunity**.

High Court Verdict and Remand

Judicial Outcome:

The Revenue conceded that the opportunity for video conferencing was indeed missed. The Gujarat High Court therefore ruled that the assessment order was passed in clear breach and violation of the principles of natural justice.

  • ➡️ The impugned assessment order was **quashed and set aside**.
  • ➡️ The matter was **remanded** to the Assessing Officer to pass a fresh de novo order in accordance with law.

Professional Insight: Key Takeaway for Taxpayers 💡

This judgment provides critical leverage for taxpayers in the faceless regime. It establishes that the right to a hearing via video conferencing, when requested, is mandatory and not optional for the AO. If you have been assessed without your specific request for a video conference being addressed, the resulting order is **vulnerable to being quashed** on procedural grounds alone. Always document your request clearly and timely.

Case Citation: Siddharth Maneklal Patel vs. National E-Assessment Centre [2025] 179 taxmann.com 263 (Gujarat).

Statutory Reference: Section 144B, read with Section 143, of the Income-tax Act, 1961.

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