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THE HIGH COURT FOR THE STATE OF TELANGANA
APARESH KUMAR SINGH, CJ., G.M.MOHIUDDIN, J.
Spandana Rural and Urban Development Organisation - Appellant
Vs.
Assessment Unit - Respondent
Writ Petition No.35178 of 2025
Decided On : 26-11-2025
| Table of Content |
|---|
| 1. factual background of the case. (Para 1 , 2) |
| 2. claim of non-compliance with natural justice. (Para 3 , 4) |
| 3. chronology of assessment proceedings. (Para 5) |
| 4. court's decision on the merits of the case. (Para 6 , 7) |
| 5. judgment concluding with dismissal of writ petition. (Para 8) |
ORDER :
Heard Mr. S.Annamalai, learned counsel representing Ms. Akruti Agarwal, learned counsel for the petitioner; Mr. Vijhay K.Punna, learned Senior Standing Counsel for Income Tax Department appearing for respondents No.1 and 2 and Mr. B.Mukherjee, learned counsel representing Mr. N.Bhujanga Rao, learned Deputy Solicitor General of India for respondent No.3.
2. Petitioner- Organization has preferred an appeal before the Commissioner of Income Tax (Appeals) (for short ‘CIT(A)’) on 10.04.2025, against the assessment order dated 20.03.2025, passed under Section 143(3) read with Section 144B of the INCOME TAX ACT , 1961 (for short ‘the Act’), for the assessment year 2023-24. Thereafter, the petitioner has preferred the present Writ Petition on 18.11.2025 against the same assessment order passed under Section 143(3) read with Section 144B of the Act for the assessment year 2023-24. Petitioner also sought for quashing of the computation sheet dated 20.03.2025 issued by respondent No.1 under Section 143(3) of the Act and demand notice dated 20.03.2025, issued by respondent No.1 under Section 156 of the Act.
3. Learned counsel for the petitioner submits that proper notice was not issued to the petitioner/assessee before undertaking the assessment proceedings, which is in contravention of the SOP issued for Faceless Assessments under Section 144B of the Act. Therefore, the impugned assessment is hit by non-compliance of principles of natural justice.
4. Learned counsel further submits that during pendency of the appeal, this Court had been pleased to quash the assessment proceedings in a batch of Writ Petitions led by W.P.No.23491 of 2025 and other cases, by order dated 16.10.2025. A mere perusal of the said order shows that the proceedings in those batch of cases have been quashed only on the ground that the assessment proceedings were initiated by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer.
5. Learned Senior Standing Counsel for Income Tax Department has furnished chronology of dates and events of the assessment proceedings, which are extracted hereunder:
| Date | Notice/Event | Date of Hearing | Remarks | Annexure | Page No. |
| 19.06.2024 | Notice u/s. 143(2) | 04.07.2024 | No response | R1 | 1 |
| 10.07.2024 | Notice u/s. 142(1) | 25.07.2024 | R2 | 4 | |
| 17.07.2024 | Assessee requested for adjournment till 05.08.2024 | NA | No action has been taken by the AO till the date of adjournment requested. | R3 | 9 |
| 05.08.2024 | Assessee further requested for adjournment till 16.08.2024 | NA | No action has been taken by the AO till the date of adjournment requested i.e. till 16.08.2024 | R4 | 10 |
| 16.08.2024 | Assessee filed written submissions in response to notice u/s. 142(1) dated 10.07.2024 | NA | R5 | 11 | |
| 28.11.2024 | Assessee filed further written submissions in response to notice u/s. 142(1) dated 10.07.2024 | NA | R6 | 14 | |
| 02.12.2024 | Notice u/s. 142(1) | 11.12.2024 | 11.12.24: Assessee requested for adjournment till 21.12.2024 | R7 | 18 |
| 11.12.2024 | Assessee requested for adjournment till 21.12.2024 | No action has been taken by the AO till the date of adjournment requested. | R8 | 25 | |
| 20.12.2024 | Assessee further requested for adjournment till 26.12.2024 | NA | No action has been taken by the AO till the date of adjournment requested i.e. 26.12.2024 | R9 | 26 |
| 26.12.2024 | Assessee further requested for adjournment till 03.01.2025 | NA | Adjourned to 07.01.2025 | R10 | 27 |
| 27.12.2024 | Issued letter by NFAC | 07.01.2025 | The request for the adjournment is considered and hearing adjourned to 07.01.2025 | R11 | 28 |
| 06.01.2025 | Assessee filed written submissions | NA | R12 | 29 | |
| 07.01.2025 | Assessee filed further submissions in continuation to submissions on 06.01.2025 | Assessee filed further annexures in continuation to the submission on 06.01.2025 | R13 | 39 | |
| 09.02.2025 | Assessee filed further submissions in continuation to sub | ||||
Proper procedural safeguards must be adhered to in assessment proceedings; however, sufficient opportunities for response mitigate claims of natural justice violations.
The court established that adherence to principles of natural justice is essential in tax assessments, particularly the right to a personal hearing.
Taxation - Assessment order - Demand Notice - Section 144B (7) mandatorily provides for issuance of a prior show cause notice and draft assessment order before issuing the impugned assessment order.
Mandatory procedures must be followed in tax assessments, ensuring that parties are given prior notice and opportunity for a hearing to uphold principles of natural justice.
The central legal point established in the judgment is the mandatory requirement of issuing a prior show cause notice and draft assessment order under the Faceless Assessment Scheme as stipulated in ....
Assessment orders must adhere to principles of natural justice, including granting personal hearing as per statutory requirements.
Assessment orders under the Income Tax Act must comply with mandatory procedural requirements, including issuing a show-cause notice and draft assessment order, to uphold principles of natural justic....
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