Assessment order passed without considering detailed reply filed on same day violates principles of natural justice.

The petitioner, a hospitality company operating "Park Hotels," filed its income tax return for the assessment year 2024-2025 declaring "NIL" income.

The case was selected for scrutiny via CASS over issues including high liabilities, large deductions, and depreciation claims.

Following notices under Sections 143(2) and 142(1), the petitioner furnished documents on August 30, 2025.

On March 11, 2026, a Show Cause Notice was issued; the petitioner sought an adjournment and subsequently uploaded a detailed reply on March 24, 2026, between 12:30 pm and 12:40 pm.

Within minutes of the upload, specifically at 12:42:53 IST, the respondent issued an assessment order making an addition of Rs. 114,77,14,844/- and raising a demand of Rs. 60,68,19,180/-, alongside penalty notices.

The petitioner challenged the order on the grounds of violation of natural justice.

1. Whether the assessment order dated 24.03.2026 is sustainable in law given the timing of the petitioner's compliance and the principles of natural justice.

The court examined Section 143(3) and Section 144B of the Income Tax Act, 1961, which govern the procedure for assessment and the Faceless Assessment Scheme.

Crucially, the court applied the principles of natural justice, which require authorities to provide an effective opportunity of hearing and to consider materials placed on record before passing an adverse order.

The court observed that while the respondents claimed sufficient opportunity was granted, the chronology of events on March 24, 2026, indicated a mechanical approach.

The petitioner uploaded a comprehensive reply and supporting documents just minutes before the assessment order was digitally signed.

The court reasoned that since the assessment order was issued almost simultaneously with the reply, the authorities failed to actually consider the materials provided or the explanations offered by the assessee.

The court held that passing a high-pitched assessment order without evaluating a timely filed reply constitutes a failure to afford an effective opportunity of hearing and lacks due application of mind.

Consequently, the Court quashed and set aside the assessment order dated March 24, 2026.

The Respondent No. 2 was directed to consider the petitioner's reply, afford an opportunity for a personal hearing, and pass a reasoned speaking order within four weeks.

The writ petition was disposed of without entering into the merits of the tax addition.