Case Law Details
Sanjay Mahendrabhai Desai Vs National E-Assessment Centre Assessment Unit & Anr. (Karnataka High Court)
The Karnataka High Court quashed an assessment order passed under Sections 144 and 144B of the Income Tax Act, 1961, holding that the assessee was not provided a reasonable opportunity of hearing before completion of the assessment.
The petitioner, an individual assessee, filed the return of income for Assessment Year 2024-25 on 25 October 2024. According to the petitioner, several notices issued by the Income Tax Department were not received. The petitioner became aware of the earlier notices only after receiving an SMS regarding a show-cause notice under Section 144 on 16 September 2025.
A show-cause notice proposing variation in the assessment was issued on 23 January 2026. The petitioner submitted that the notice was received only on 24 January 2026 at 10:30 p.m., leaving only three days to respond, which was inadequate. The petitioner therefore requested an adjournment. On 28 January 2026, the petitioner also sought a personal hearing through video conferencing on or after 12 February 2026.
Despite this request, the respondents issued an intimation on 30 January 2026 at 12:55 p.m., fixing the video conference for 4:00 p.m. on the same day, effectively providing only three hours’ notice. The petitioner requested that the hearing be rescheduled after 12 February 2026, but the request was not considered. The respondents thereafter passed the assessment order on 10 February 2026 under Sections 144 and 144B.
The petitioner contended that the assessment order was passed in violation of the principles of natural justice and without complying with Sections 144B(6)(vii) and 144B(6)(viii), which contemplate an opportunity of hearing where a variation is proposed and permit the assessee to request a personal hearing. It was also argued that the assessment was completed without granting an adequate opportunity to present the case.
During the hearing, the Revenue was unable to dispute that only three hours’ notice had been given for the video conference despite the petitioner’s request for a hearing after 12 February 2026. It was also accepted that the petitioner had sought an adjournment.
The High Court observed that the petitioner had specifically requested additional time to submit a reply and a later date for the video conference. Nevertheless, the respondents scheduled the hearing with only three hours’ notice and proceeded to complete the assessment. The Court held that such conduct was not tenable and that the assessment order could not be sustained.
Accordingly, the High Court allowed the writ petition, quashed the assessment order dated 10 February 2026, and remanded the matter to the respondent authorities for fresh consideration. The authorities were directed to provide the petitioner an opportunity to file a reply and grant a video conference hearing before passing a fresh order. The Court directed that the entire exercise be completed within 12 weeks from the date of receipt of its order.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
1. 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 show-cause 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.
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