LI Network
Published on: 31 August 2023 at 06:26 IST
Bangabasi College received reprieve from the Calcutta High Court as it invalidated both the assessment order and penalty notice issued by Income Tax authorities.
The court observed that the college’s request for a personal hearing via video conferencing had not been fulfilled due to technical glitches, and hence, the taxpayer should not bear the consequences of such faults.
Justice Rajarshi Bharadwaj, presiding over the Single Judge Bench, emphasized that “The opportunity of personal hearing could not be availed due to technical difficulties and for such technical fault, the petitioner cannot be made to suffer.”
The petitioner, Bangabasi College, is a government-aided institution affiliated with the University Grants Commission and Calcutta University in West Bengal.
The college contested an assessment order under Section 147 of the Income Tax Act and a penalty notice under Section 274 of the Act, both issued by the Income Tax authorities.
Upon examination, the court found that the assessment order dated March 18, 2023, negatively impacted the college due to its inability to attend a personal hearing attributed to technical issues.
The court emphasized that the college’s inability to participate in a virtual hearing due to technical glitches should not result in penalization. The Income Tax authority failed to provide conclusive evidence demonstrating that the college’s plea for a video conferencing-based personal hearing was acknowledged and acted upon, especially after pointing out the technical fault within the system.
Referring to Administrative Circular No. 14(XL-35) dated April 11, 1995, which guides Income Tax Officers on assessment matters, the court highlighted that although the college availed relief under Section 10(23C) of the Income Tax Act as a government-aided institution affiliated with Calcutta University, it was not familiar with the Income Tax ‘e-proceeding facility’.
In light of this, the court stressed that the Income Tax Authority should have shown understanding for the college’s situation, taking into account departmental Circular No. 14(XL-35) dated April 11, 1995.
Consequently, the High Court remanded the case to the relevant assessing officer with instructions to issue a fresh assessment order.