NFAC Must Provide Video Conferencing If Assessee Seeks Personal Hearing: Delhi High Court

The Delhi High Court has held that a taxpayer who seeks a personal hearing during appellate proceedings before the NFAC is entitled to such a virtual hearing.

“There are various issues which can be better explained with the help of personal or virtual assistance by assessee or its authorised representative. Mere written submissions or memo of appeal are not sufficient for proper adjudication,” division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed.

The court thus set aside an order of the Commissioner of Income Tax (Appeals) NFAC, passed without hearing the assessee despite requests.

Petitioner-assessee had challenged the appellate order contending that despite repeatedly requesting a personal hearing to explain the nature of the disputed transactions, no opportunity of hearing through video conferencing was granted.

Although hearing notices had been issued and written submissions were filed, the request for virtual hearing was ignored.

Before the High Court, the Revenue accepted, on instructions, that the assessee had sought a personal hearing and that no video conferencing link had been communicated

In this backdrop the High Court remarked,

"The appellate proceedings and hearing of an appeal... presupposes hearing of an assessee or its authorised representative physically or in virtual mode... Consideration of written submissions or memo of appeal, can in no manner, substitute the oral or personal hearing."

Accordingly, the Court set aside the appellate order and restored the appeal to the CIT(A), directing the NFAC to issue a fresh notice of hearing and provide a video conferencing link.

Significantly, the Court has also directed the Chairman of the Central Board of Direct Taxes (CBDT) and the Principal Chief Commissioner of Income Tax (National Faceless Appeal Centre) to ensure that a video conferencing facility is made available in appellate proceedings, within three months.

“It is necessary so that in case, any assessee or its authorised representative asks for video conferencing, the same can be provided, as a matter of right to the appellant or its authorised representative,” the Court said.

For Petitioner: Senior Advocate Kavita Jha with Advocates Aditya Bali and Vaibhav Kulkarni.

For Respondents: Senior Standing Counsel Abhishek Maratha with Junior Standing Counsels Apoorv Agarwal and Viplav Acharya, and Advocates Nupur Sharma, Muskaan Goel and Himanshu Gaur.