2026 (3) TMI 181 - HC - Income Tax

Right to be heard: faceless assessments without opportunity to reply or personal hearing must be set aside and reheard.

Failure to afford an assessee the mandated opportunity to file a reply to a show-cause notice and to obtain personal hearing in faceless assessment ... Validity of assessment order passed u/s 144 r/w Section 144B and consequential demand notice u/s 156 - denial of opportunity to file reply and denial of personal hearing - violation of principles of natural justice - denial of e-submission and video-conference opportunity under faceless assessment - HELD THAT: - The Court found on the record that the petitioner was prevented by the portal from filing her reply to the show-cause notice and that an online grievance lodged on that day was not redressed. Although the appellate authority had remanded the matter with a direction to afford sufficient opportunity before completing the assessment afresh, no personal hearing was offered and the faceless assessment portal access remained closed. On these facts the Court concluded that the impugned assessment order was passed in breach of the principles of natural justice. The Court did not examine the merits of the assessment but held that the procedural denial of the opportunity to be heard rendered the assessment invalid and required fresh consideration after granting the opportunity to file replies and be heard. [Paras 10, 11] Final Conclusion: The writ petition is allowed - faceless assessment order and demand notice are set aside for breach of natural justice and the respondents are directed to re-open assessment proceedings, permit filing of the reply and grant opportunity of hearing before passing fresh orders. Issues: Whether the assessment order dated 04.12.2025 passed under Section 144 read with Section 144B of the Income-tax Act, 1961, together with the consequential demand notice dated 04.12.2025 under Section 156, is vitiated by denial of opportunity to file reply and denial of personal hearing as directed by the appellate authority.Analysis: The remand by the appellate authority required fresh assessment after affording sufficient opportunity to the assessee. Proceedings were conducted under the faceless assessment framework invoking Section 144B and Section 144 of the Income-tax Act, 1961, and notices under Section 142(1) were issued seeking explanations. The record shows that the assessee was unable to e-file her reply due to portal closure, lodged a grievance which was not remedied, and was not offered personal hearing before the impugned order was passed. Failure to provide the statutory and remand-directed opportunity to file a reply and to be heard engages the principles of natural justice and renders the assessment process unfair and procedurally infirm.Conclusion: The impugned assessment order dated 04.12.2025 and the demand notice dated 04.12.2025 are set aside; the assessee is permitted to file her reply to the show cause notice and shall be afforded opportunity of hearing before fresh assessment is completed; writ petition allowed in favour of the assessee.