Assessment Set Aside as Failure to Provide Mandatory Faceless

Assessment Set Aside as Failure to Provide Mandatory Faceless Personal Hearing Violates Principles of Natural Justice

Issue

Whether an assessment order passed under Section 144B of the Income-tax Act, 1961 (Section 273 of the Income-tax Act, 2025) is legally sustainable when the Assessing Officer fails to grant a personal hearing through video conference despite an express written request made in the assessee’s reply to the show cause notice.

Facts

Request for Personal Hearing: In response to the show cause notice issued under Section 144B, the assessee submitted a written reply containing an express request for a personal hearing through video conferencing.
AO Acknowledged Reply: The assessment order explicitly recorded the receipt of the assessee’s reply.
No Hearing Granted: Despite acknowledging the reply, the faceless unit finalized the assessment order without granting the requested video conference hearing.
Procedural Defense: The Revenue contended that the assessee did not formally request the hearing by clicking the dedicated “seek video conferencing” button on the portal.
Writ Petition Filed: The assessee challenged the validity of the final assessment order on grounds of natural justice violation.

Decision

Statutory Duty to Provide Hearing: Under Section 144B, once an assessee submits an express request for a personal hearing in response to a show cause notice, the faceless assessment unit is mandatorily required to afford a hearing via video conferencing.
Substance Over Portal Aesthetics: A statutory right to be heard cannot be denied merely because the request was made in written text within the reply rather than by clicking a specific portal button.
Order Quashed & Remanded: The High Court/Tribunal set aside the impugned assessment order and remanded the matter back to the Assessing Officer to reconsider the assessment afresh from the stage of conducting the video conference hearing.

Key Takeaways

Mandatory Compliance with Section 144B: Providing an opportunity for a personal hearing via video conferencing upon request is a mandatory procedural safeguard under the faceless assessment scheme.
Non-Compliance Vitiates Assessment: Passing an assessment order without granting a requested video hearing amounts to a violation of natural justice, rendering the resulting order void and liable to be set aside.
Portal Technicalities Cannot Defeat Statutory Rights: Failure to click a specific online button or tab does not extinguish an assessee’s fundamental right to a personal hearing if the request is clearly articulated in written responses on record.

HIGH COURT OF MADRAS

Process Sensing Technologies PST (P.) Ltd.

Assessment Unit (faceless) Income-tax Department

Senthilkumar Ramamoorthy, J.

WP No. 22328 of 2026
W.M.P.Nos. 24210 and 24213 of 2026

AUGUST 4, 2026

Raghunandan Sriram for the Petitioner. Mrs. S. Premalatha, Sr. SC for the Respondent.

ORDER

1. Assessment order dated 16.03.2026 is impugned on the ground that a personal hearing by video conference was not provided in spite of a specific request for the same.

2. Adverting to reply dated 09.02.2026 to the show cause notice, learned counsel for the petitioner submits that a personal hearing through video conference was expressly requested for therein. In spite of such request, learned counsel submits that the impugned assessment order was issued without providing such video conference hearing.

3. Responding to this contention, learned standing counsel for the Income Tax Department points out that the show cause notice indicated that the petitioner should make a request for a video conference hearing only by clicking the seek video conference button available against the show cause notice.

4. Under Section 144B of the Income Tax Act, when a request for personal hearing is received, the relevant faceless unit is required to provide a personal hearing through video conference. The impugned assessment order records that the petitioner’s reply to the show cause notice was received. Said reply makes an express request for the video conference hearing. Merely because such request was not made by clicking on the seek video conferencing button, the petitioner’s statutory right cannot be denied. Therefore, the impugned assessment order is set aside and the matter is remanded for reconsideration from the video conferencing stage. Consequently, after providing a hearing through video conferencing, a fresh assessment order shall be issued within four months from the date of receipt of a copy of this order.

5. Therefore, this writ petition is disposed of on the above terms. There shall be no order as to costs. Consequently, the connected writ miscellaneous petitions are closed.