IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD The Hon’ble The Chief Justice Sri Aparesh Kumar Singh and The Hon’ble Sri Justice G.M.Mohiuddin Writ Petition No.3716 of 2026 Dated: 19.02.2026 Between:

The ICFAI Society, 52, Nagarjuna Hills, Punjagutta, Hyderabad Rep. by its Authorised Signatory M.Taraka Srinivasa Rao ...Petitioner and Union of India Rep. by its Secretary, Ministry of Finance, Department of Revenue, New Delhi and 4 others.

...Respondents

Order

Heard Mr. S.Ravi, learned Senior Counsel appearing for Mr. Kailashnath.P.S.S., learned counsel for the petitioner and Mr. Vijhay K.Punna, learned Senior Standing Counsel for Income Tax Department appearing for respondents No.2 to 5.

2 The Assessment Order dated 06.01.2026, passed by respondent No.2-Assessing Officer, National Faceless Assessment Centre, for the assessment year 2015-16 has been assailed by the petitioner-Society in this Writ Petition, on the grounds of denial of opportunity to submit reply to the show cause notice dated 09.12.2025, issued by respondent No.5- Commissioner of Income Tax (Exemption), Hyderabad, under Section

143(3) of the Income Tax Act, 1961, and also disallowance of exemption under Section 10(23C)(vi) of the Act.

3. It is the case of the petitioner that earlier the assessment order dated 29.12.2017, passed under Section 143(3) of the Act, for the same assessment year 2015-16, was subjected to appeal before respondent No.3, who dismissed the same by order dated 31.10.2023. However, in the further appeal preferred before the Income Tax Appellate Tribunal (ITAT), by Order dated 30.07.2024, the assessment order dated 29.12.2017 was set aside and the matter was remanded to respondent No.2- Assessing Officer for fresh consideration with a direction to the petitioner/assessee to furnish all the details/documents to prove that its activities are not commercial in nature and are interlinked with the imparting of education.

4. In the meantime, order dated 30.09.2024 came to be passed by respondent No.4- Commissioner of Income-tax (Exemptions), Hyderabad, whereby the proposal for initiation of cancellation proceedings in respect of the registration granted under 15^th proviso to Section 10(23C) of the Act was dropped.

5. Learned counsel for the petitioner submitted that in pursuance of remand by the ITAT, respondent No.2 initiated proceedings by issuing notice dated 23.05.2025 under Section 142(1) of the Act and subsequent notice under Section 143(3) of the Act on 09.12.2025, which was digitally signed on 10.12.2025, giving time till 13.12.2025 for filing reply. As the petitioner’s requests for further time on the scheduled dates of personal hearing were not acceded to, he uploaded his reply on the Income Tax Grievance Cell on 29.12.2025, but the same has also not been taken into consideration while passing the impugned order of assessment dated 06.01.2026. Learned counsel submits that the last date for passing the assessment order after remand by the ITAT is 31.03.2026. The petitioner has assailed the impugned assessment order dated 06.01.2026, stating that if reply to the show cause notice is taken into consideration by the assessing officer, its grievance would be met.

6. The matter was adjourned on 09.02.2026 to enable the learned Standing Counsel for Income Tax Department to obtain instructions.

7. Today, learned Standing Counsel for Income Tax Department has placed before this Court, the Standard Operating Procedure (SOP) for Assessment Unit, Verification Unit, Technical Unit and Review Unit under the faceless assessment provisions of Section 144B of the Act, dated 03.08.2022. He has drawn the attention of this Court to the SOP prescribed in the process of assessment, relevant portion of which is extracted hereunder:

N.1 Show Cause Notice (SCN) shall be issued in the prescribed format (Annexure AU-7), in all cases where any variation prejudicial to the assessee is proposed –

N.1.1 SCN shall be drafted after conduct of all necessary enquiry/verifi