Passing Assessment Order Without Providing Reasonable

Passing Assessment Order Without Providing Reasonable Opportunity Violates Principles Of Natural Justice

Issue

Whether a best judgment assessment order passed under Section 144 read with Section 144B is legally sustainable when the Revenue provides inadequate response windows, ignores an adjournment request, and gives only a three-hour notice for a video conference personal hearing.

Facts

The assessee filed their return of income for the Assessment Year 2024-25 on 25.10.2024.
On 23.01.2026, the Revenue issued a show-cause notice proposing a variation, which the assessee received on 24.01.2026 at 10:30 p.m., leaving approximately three days to draft a reply.
On 28.01.2026, the assessee submitted an adjournment application, explicitly requesting a personal hearing via video conferencing on or after 12.02.2026 to compile the necessary details.
Instead of addressing the request fairly, the Revenue issued an intimation on 30.01.2026 at 12:55 p.m., scheduling the mandatory video conference for the exact same day at 4:00 p.m.—offering a mere three hours’ notice.
Without granting further extensions or a real opportunity to be heard, the Revenue passed a best judgment assessment order under Section 144 read with Section 144B on 10.02.2026.

Decision

Held, yes: The high-handed conduct and subsequent formatting actions of the Revenue were completely untenable in law.
The assessment order dated 10.02.2026 was explicitly quashed and set aside because the categorical request for an extension until 12.02.2026 was ignored, denying the taxpayer a fair chance to respond.
Held, yes: The matter was officially remanded back to the respondent authorities with instructions to pass a fresh order only after providing a genuine, reasonable opportunity of being heard to the assessee.

Key Takeaways

Statutory Right to Personal Hearing: Under the faceless assessment paradigm (Section 144B), granting a personal hearing via video conferencing upon request is mandatory, not discretionary, whenever a variation is proposed.
Reasonable Notice Standard: Providing a three-day window to reply to a complex show-cause notice, followed by a mere three-hour notice for a video conference, constitutes a textbook violation of the principles of natural justice (Audi Alteram Partem).
Consequence of Prejudicial Haste: Assessment orders rushed through by tax authorities without affording realistic timelines to the taxpayer are constitutionally flawed and liable to be quashed by appellate authorities or courts.

HIGH COURT OF GUJARAT

Sanjay Mahendrabhai Desai

National e-Assessment Centre Assessment Unit

A.S. Supehia and Pranav Trivedi, JJ.

R/SPECIAL CIVIL APPLICATION NO. 3773 of 2026

APRIL 7, 2026

Darshan R Patel, Adv. for the Petitioner. Dev D Patel, Adv. for the Respondent.

JUDGMENT

Pranav Trivedi, J. – Heard Mr.Darshan Patel, learned advocate appearing for the petitioner and learned Senior Standing Counsel Mr.Dev Patel for the respondents.

2 Rule returnable forthwith. Mr.Dev Patel, learned Senior Standing Counsel, waives service of notice of rule on behalf of the respondents.

3 Having regard to the controversy involved in this petition, with the consent of the learned advocates appearing for the respective parties, the matter is taken up for final hearing and final disposal today. The present petition preferred under Article 226 of the Constitution of India challenges the Assessment Order dated 10.02.2026 passed under Section 144 of the Income Tax Act, 1961 (for short hereinafter referred to as “the Act”), read with Section 144B of the Act.

4 The brief facts leading to filing of the present writ petition are as under:

4.1 The petitioner is an individual assessee, who filed its return of income for the Assessment Year 2024-25 on 25.10.2024.

4.2 It is the case of the petitioner that several notices were issued which were not received by him. Subsequent thereto, the petitioner received an SMS for show-cause notice under Section 144 of the Act on 16.09.2025 and it was on that date that the petitioner came to know about the earlier notices.

4.3 Thereafter, the petitioner received show-cause notice for the proposed variation on 23.01.2026. In response to the show-cause notice, the petitioner requested for an adjournment. It was further pointed out by the petitioner that since the show-cause notice was received by the petitioner only on 24.01.2026 i.e. on Friday at 10:30 p.m, and only three days time was given to the petitioner to file reply which was very inadequate. In such a situation, the petitioner requested for an adjournment.

4.4 It is the case of the petitioner that the petitioner also made a request on 28.01.2026 for providing him an opportunity of personal hearing through video conferencing on or after 12.02.2026. However, the respondents scheduled the video conference hearing on 30.01.2026 at 4:00 p.m by issuing an intimation to the petitioner on 30.01.2026 itself at 12:55 p.m. Therefore, it is the case of the petitioner that only three hours were given to the petitioner to attend the video conference.

4.5 It is the case of the petitioner that since the intimation was given on 30.01.2026 at 12:55 p.m, a request was made by the petitioner to reschedule the video conference after 12.02.2026. However, the respondents did not consider the request of the petitioner and passed an Assessment Order under Section 144 read with Section 144B of the Act on 10.02.2026 which is impugned in the present petition.

5 Mr.Darshan Patel, learned advocate appearing on behalf of the petitioner, submitted that the respondents has passed the final Assessment Order under Section 143(3) read with Section 144B of the Act in gross violation of the principles of natural justice without providing an opportunity of video conferencing as per Section 144B(6)(vii) and Section 144B(6) (viii) of the Act.

5.1 It was further submitted by learned advocate Mr.Darshan Patel that the final Assessment Order is passed with a predetermined approach which is detrimental to the petitioner as it is without granting adequate opportunity of hearing to the petitioner.

5.2 It was further pointed out by learned advocate Mr.Darshan Patel that Section 144B(6)(vii) specifically states that in a case where a variation is proposed in the income or loss or in the draft assessment order, an opportunity has to be provided to the assessee by serving notice and calling upon him to show-cause as to why the assessment should not be completed as per such income or loss as determined. In such cases, the assessee may request for personal hearing.

5.3 Further, in the instant case, the notice is issued on 23.01.2026, wherein, the petitioner has requested for hearing after 12.02.2026. However, without giving any opportunity, another intimation is given on 30.01.2026 at 12:55 p.m for a hearing which was scheduled after three hours at 4 p.m, which is de hors the principles of natural justice. In such a situation, Mr.Darshan Patel, learned advocate, has prayed to grant the prayers as made in the present writ petition.

6 Per Contra, learned Senior Standing Counsel Mr.Dev Patel appearing for the respondent, was not in a position to counter the fact that the petitioner was given only three hours intimation to remain present for video conferencing. It was also categorically accepted by the learned Senior Standing Counsel that the petitioner has made a categorical request to grant an adjournment after 12.02.2026. However, video conferencing notice was given only on 30.01.2026 within a span of three hours and such fact cannot be disputed.

7 In wake of such factual aspect, Mr.Dev Patel, learned Senior Standing Counsel, has requested to pass appropriate orders.

8 In the instance case, it is not disputed that the showcause notice was issued to the petitioner on 24.01.2026. A request was made by the petitioner on 28.01.2026 to grant video conference to the petitioner after 12.02.2026. Despite such request made by the petitioner, an intimation of Video Conferencing was given on 30.01.2026 at around 12:55 p.m directing the petitioner to remain present for video conferencing at 4:00 p.m i.e. after period of three hours. Further, the petitioner had made a categorical request to grant adjournment till 12.02.2026 so that appropriate reply can be filed. The conduct and subsequent actions of the respondent are not tenable and therefore the Assessment Order passed by the respondent in case of the petitioner dated 10.02.2026 under Section 144 read with Section 144B of the Act for the Assessment Year 2024-25 is required to be quashed and set aside.

9 The petition accordingly succeeds. The Assessment Order dated 10.02.2026 passed under Section 144 read with Section 144B of the Act for the Assessment Year 2024-25 passed by the respondent are hereby quashed and set aside. The matter is remanded back to the respondent authorities to pass a fresh order after giving an opportunity of hearing to the petitioner to file reply and also providing him an opportunity of video conferencing.

10 Such exercise shall be completed within a period of 12 weeks from the date of receipt of copy of this order.

11 The petition is accordingly disposed of. Rule is made absolute accordingly.