The Delhi High Court, in High Vista Buildcon Pvt. Ltd. (Earlier Known as Vikram Electric Equipment Pvt. Ltd.) v. National Faceless Appeal Centre (NFAC), Delhi & Others, has held that consideration of written submissions cannot substitute an oral or virtual hearing in appellate proceedings under Section 250 of the Income Tax Act, 1961. The Court set aside the faceless appellate order after finding that the assessee’s request for a personal hearing through video conferencing had not been granted.
The judgment was delivered on 21 July 2026 by a Division Bench comprising Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta in W.P.(C) 4594/2026, along with the connected applications.
Background of the Dispute
The petitioner had filed an appeal before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, against an assessment order dated 30 December 2019 passed under Section 143(3) of the Income Tax Act. The appeal was instituted on 28 January 2020.
Subsequently, during penalty proceedings, the Assessing Officer informed the petitioner that its appeal had already been rejected. The petitioner thereafter downloaded the appellate order dated 28 July 2025 from the Income Tax portal and challenged it before the Delhi High Court.
The principal contention raised by the petitioner was that the appellate order had been passed in violation of the principles of natural justice. Although written submissions and requests for adjournment had been filed during the appellate proceedings, the petitioner’s specific request for a virtual hearing had not been accepted, and no video conferencing link had been provided.
Written Submissions Cannot Replace Oral Hearing
The Revenue acknowledged before the Court that the assessee had requested an opportunity for personal hearing and that no video conferencing link had been communicated.
The High Court observed that appellate proceedings necessarily contemplate an opportunity for the assessee or its authorised representative to be heard, either physically or through virtual mode. According to the Court, consideration of the memorandum of appeal and written submissions cannot, by itself, be treated as an adequate substitute for oral or personal hearing.
The Court noted that several factual and legal issues may be more effectively explained through direct interaction between the appellate authority and the assessee or its authorised representative. In the present case, the disputed matters included the disallowance of advances written off amounting to ₹1,27,92,250 and an addition of advances under Section 68 amounting to ₹20.70 crore.
The failure of the NFAC to provide a virtual hearing, despite a specific request, was therefore held to have resulted in a failure of justice.
Appellate Order Set Aside and Appeal Restored
The Delhi High Court quashed the appellate order dated 28 July 2025 and restored the petitioner’s appeal to the CIT(A), NFAC.
The Court directed the NFAC to issue a fresh hearing notice and provide the petitioner with a video conferencing link. It further clarified that where the designated video conferencing facility is unavailable, the appellate authority may use any other virtual platform, including Zoom, Cisco Webex, Google Meet, WhatsApp or another suitable virtual mode.
The appellate authority must thereafter reconsider the appeal after providing an effective opportunity of hearing to the petitioner.
Consequential Penalty Orders Also Quashed
Since the underlying appellate order was set aside, the High Court also quashed the penalty order dated 16 March 2026 passed under Section 271AAC(1) and the order dated 18 March 2026 passed under Section 270A of the Income Tax Act.
The Assessing Officer was granted liberty to initiate or pass fresh penalty orders, where required, after the restored appeal is decided by the appellate authority.
CBDT Directed to Provide Video Conferencing Facility
The judgment also contains an important systemic direction concerning faceless appellate proceedings.
The Court directed the Chairman of the Central Board of Direct Taxes and the Principal Chief Commissioner of Income Tax, NFAC, to coordinate and ensure that a video conferencing utility is made available for appellate proceedings under Section 250 within three months, where such a facility is not already operational.
The Court held that when an assessee or its authorised representative requests a video conference, the facility must be provided as a matter of right. A copy of the judgment was directed to be sent to the CBDT Chairman and the Principal Chief Commissioner of Income Tax, NFAC, for compliance.
Significance of the Judgment
The ruling reinforces the application of natural justice principles within the faceless appellate system. While digital administration may eliminate physical interaction, it does not eliminate the assessee’s right to effectively present and explain its case.
The judgment makes it clear that faceless proceedings cannot be reduced to an exchange of notices and written submissions where the assessee has specifically requested an oral hearing. Appellate authorities must provide a meaningful opportunity of virtual interaction before deciding issues involving substantial additions, factual explanations or complex transactions.
The decision is particularly relevant for advocates, Chartered Accountants, tax consultants, corporate tax teams and taxpayers appearing before the NFAC. It confirms that the right to seek a virtual hearing forms an integral part of a fair appellate procedure under Section 250 of the Income Tax Act.
