Missed Tax Show-Cause Deadline, Sought Hearing After ILDP Without Extension: P&H HC Upholds Assessment, Says No Duty To Reopen

The petitioner challenged the assessment order for AY 2024–25 under Sections 143(3) and 144B of the Income-tax Act, 1961, and the consequential demand notice.

A show-cause notice dated 24 February 2026 required a response by 1 March 2026 at 5:40 p.m. and stated that a request for video-conference (VC) hearing had to be made before that deadline.

The petitioner neither replied nor sought an extension or hearing within the stipulated time.

The Income or Loss Determination Proposal (ILDP) was approved and generated on 13 March; the petitioner sought a VC hearing on 16 March and filed a reply on 17 March, before the assessment order was digitally authenticated that day.

The order did not address those late communications.

The petitioner also challenged the difference between the order’s stated date, 16 March, and its digital-signature date, 17 March, and disputed related penalty notices.

Sections 143(3) and 144B(1)(xii)–(xv) of the Income-tax Act govern the assessment process, including notice of proposed prejudicial variations, the assessee’s reply, and the consequences of failing to respond within the specified time; Section 144B(6)(vii)–(viii) permits an assessee to request an oral hearing and requires the authority to allow it when requested in the prescribed process.

The authority may fix a reasonable response deadline, and an assessee unable to comply must seek an extension under Section 144B(1)(xiii).

Where the assessee fails to respond or seek an extension within time, the authority may proceed to prepare the ILDP and is not required to reopen a completed stage or give a reasoned decision on a belated request or reply, absent sufficient cause.

The Court also applied the principle that natural justice must be understood within the governing statutory framework, and considered the CBDT-approved SOP dated 3 August 2022, including its sequence for the show-cause process, VC hearing (if sought), and ILDP.

Section 246A provides a statutory appeal; Section 249(3) permits consideration of delay condonation.

The Court distinguished Arihant Roller Flour Mills v. NFAC, Suvidhi Udyog Pvt. Ltd. v. National Faceless Assessment Centre, and Champion Exim Company v. Union of India on their facts.

The Court held that the petitioner’s VC request and reply came after the stated deadline, without a timely extension application, and after the ILDP had been generated and the draft order prepared.

Although the request preceded final authentication and the reply was uploaded before authentication, those circumstances did not oblige the authority to restart the assessment sequence or consider the late submissions; the remaining time before the statutory limitation date did not alter that conclusion.

The petitioner’s explanation—that he overlooked the notice—was unsupported and insufficient, particularly given his prior participation in the assessment proceedings.

The discrepancy between the order date and authentication date was a technical variance, without demonstrated prejudice, and did not invalidate the order.

The penalty notices were not subject to a quashing prayer, and the petitioner could respond to them separately; the merits of the additions could be pursued in a statutory appeal.

It left the petitioner free to appeal under Section 246A and directed that the appellate authority may consider condonation of delay, taking account of time spent bona fide pursuing the writ petition.

The petitioner may also respond to the penalty notices, with the authorities to proceed according to law.

Any merits raised in appeal are to be decided uninfluenced by the Court’s observations on natural justice.