Bombay High Court cancels faceless tax assessment for disregarding reply and refusing hearing

The Bombay High Court set aside a faceless tax assessment after finding that the tax authority completely overlooked a timely reply submitted by the assessee and wrongfully refused a request for a personal hearing. The court ruled that such omissions violate foundational principles of natural justice and procedural fairness during taxpayer evaluations. In tax administration, the faceless assessment scheme is designed to operate through electronic communication without physical contact between officials and taxpayers, reducing bias.

However, this system must strictly adhere to statutory safeguards, including the mandatory consideration of written submissions and the provision of an oral hearing when requested under specified conditions. The old position often saw mechanical processing of automated orders, whereas this ruling confirms that ignoring valid submissions renders the resulting order legally invalid. Tax professionals and CAs should meticulously document all submission timestamps, acknowledgement receipts, and formal hearing requests made during tax proceedings.

Legal teams must monitor portal communications closely to challenge procedural lapses promptly in higher judicial forums. Bottom line: Always secure digital proof of timely filings to protect client assessments from arbitrary administrative omissions.