ITAT: Video hearing a retrospective right – Times of India

MUMBAI: A recent decision by the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) will benefit a host of taxpayers whose right to a personal hearing via video conferencing had been denied earlier in the mechanism of faceless appeals.
The ITAT bench — composed of vice-president Pramod Kumar and judicial member Aby T Varkey — held that the revised scheme (introduced last December), which provides that a personal hearing via video conferencing would be available in ‘all’ cases when the taxpayer makes such a request, would apply retrospectively. This decision was given in the case of Bank of India and is binding on tax authorities in its territorial jurisdiction — a significant percentage of high-value assessments and consequently appeals are centred in Mumbai. In all other instances, it will strengthen the stand of the taxpayers.

In the past, several requests for a personal hearing, albeit via video conference, made by individuals and business entities for their appeal cases at the first appellate level (with commissioner-appeals) had been denied. For appeals involving high demands or complex transactions, this denial was a severe set-back for taxpayers.
Under the earlier scheme of faceless appeals, the taxpayer as a matter of right had no opportunity for a personal hearing. The discretion to grant such a request vested with the chief commissioner or director general in charge of the regional faceless appeals centre. Following lawsuits challenging this scheme, the Central Board of Direct Taxes (CBDT) revised it last December, removing the discretionary powers and granting a personal hearing in all cases, when requested for.
The ITAT bench relied on two Supreme Court judgments that dealt with the doctrine of fairness. The apex court had held, “Where a law is enacted for the benefit of the community as a whole, even in the absence of a provision, the statue may be held to be retrospective in nature.”
In this backdrop, in the context of faceless appeals, the ITAT members in their order state, “It is an amendment in the faceless appeal rules which is meant to obviate the undue hardships of the taxpayer in presenting their cases to the first appellate authority, and when such an amendment is made to cure the shortcomings of the scheme, and thus obviate the unintended hardships to the taxpayers, the amendment is to be treated as retrospective in effect.”
This case has been remitted back to the commissioner (appeals) and a personal hearing will be granted to the appellant, namely, Bank of India.

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