High Court of Gujarat · Judgments and reasoned final orders
GFL Limited v. Assessment Unit, Income Tax Department & Anr.
R/Special Civil Application No. 14177 of 2023 ·
Faceless penalty proceedings under section 271AA(1) read with section 144B(3): order levying Rs. 14,64,82,243 penalty quashed because officer who passed the penalty order was not the officer who heard the assessee via video conferencing; CBDT directed to issue pan-India instructions.
1. FACTS OF THE CASE
For AY 2018-19, following a TPO adjustment under section 92CA(3) and dropping of section 271G penalty proceedings on 26.09.2022, the Faceless Assessment/Penalty Unit issued show-cause notices under section 271AA(1) for alleged failure to maintain/report international transaction documentation under section 92D. The petitioner attended a video-conference hearing on 13.03.2023 and filed written submissions on 14.03.2023, but on 29.03.2023 a penalty of Rs. 14,64,82,243 was levied under section 271AA(1) by a different officer than the one who had conducted the video hearing.
2. DISCUSSION BY THE COURT
Examining section 144B(3) and the Faceless Penalty Scheme, 2021 (as amended in 2022) alongside Gullapalli Nageswara Rao v. APSRTC and Automotive Tyre Manufacturers Association v. Designated Authority, the Division Bench held that personal hearing via video conferencing becomes an empty formality if one officer hears the assessee and a different officer passes the order. The Court directed CBDT (impleaded as Respondent No. 3) to issue instructions to all Assessment and Penalty Units ensuring that the officer who grants the video-conference hearing passes the assessment or penalty order.
3. JUDICIAL DECISION
Quashing and setting aside the penalty order dated 29.03.2023 passed under section 271AA(1), the High Court remanded the matter to the Assessment/Penalty Unit to provide a fresh opportunity of hearing and pass a fresh order by the same officer who hears the petitioner via video conference, and made the rule absolute to that extent.
4. OUTCOME
Assessee - Impugned section 271AA(1) penalty order of Rs. 14,64,82,243 quashed and remanded for fresh order by the same officer who conducts video-conference hearing; CBDT directed to issue instructions.
5. AKHB REVIEW POINT
AKHB analysis: in faceless assessment or penalty challenges where a change of incumbent occurs inside the Assessment/Penalty Unit between the video-conference hearing and the final order without a fresh hearing, invoke GFL Limited and Gullapalli Nageswara Rao to challenge the order for breach of the rule that the officer who hears must decide.
Source: AKHB analysis based on Paragraphs 7-22; PDF pp. 5-21
Source and verification
22-page official High Court of Gujarat judgment PDF (20250422_GJHC240529352023.pdf).
Original PDF: 22 pages · SHA-256: e1f252fb2ea9ad883ee773c0b6b6856ee4a22e21dcb3ecdcbc714cd51b96671e
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies sections 144B(3) and 271AA(1) of the Income-tax Act, 1961 and the Faceless Penalty Scheme, 2021 (amended 2022) for AY 2018-19. Income-tax Act, 2025 equivalence is not verified.
Full primary judgment PDF read page-by-page and verified against the AKHB Google Drive repository. Comprehensive subsequent judicial treatment has not been independently verified.
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