If AO rejects a reply, he has to offer opportunity of personal hearing to assessee

If assessing officer rejects a reply, he had to offer an opportunity of personal hearing to the assessee– Allahabad High Court

In a recent judgment, Allahabad High Court has held that in terms of section 144B of the Income Tax Act, once a reply had been filed, it should have been considered by the assessing officer. If assessing officer wishes to reject the reply, he has to offer an opportunity of personal hearing to the assessee.

ABCAUS Case Law Citation:
5017 (2026) (01) abcaus.in HC

In the instant case, the Petitioner/assessee had challenged the ex-parte Assessment Order passed by the Assessing Officer (AO) without granting a personal hearing.

The Petitioner was aggrieved as the last show cause notice was issued to the petitioner on 3.12.2025 fixing the date to file reply on 12.12.2025. Though the petitioner could not file that reply within time granted, she did file written reply through electronic mode on 15.12.2025. However, without fixing or communicating any date for personal hearing and without considering the reply furnished by the petitioner, the AO passed an ex-parte best judgment assessment on 23.12.2025.

The Revenue raised a preliminary objection in maintainability of the Writ Petition stating that statutory remedy of appeal was available to the petitioner. Also, it was urged that the earlier notice was issued to the petitioner remained unresponded. It was stressed that the petitioner was not having any real grievance.

The Hon’ble High Court observed that the division bench of the High Court had held (ABCAUS 3995 (2024) (05) HC) that there is no warrant to interpret that the processual law prescribes that opportunity of personal hearing may not be granted by the assessing authority unless specifically requested for by the petitioner, in writing. To do that would be to give meaning to the word “request” used under Sections 144B(6)(vii) and (viii), larger and much wider than intended by the legislature. Under the general scheme of the Act, assessment orders are to be passed after giving opportunity to the assessee to present his case. To that extent, the revenue does not dispute the contention of the assessee and it does not claim a right to frame ex parte assessment orders. It contends, the opportunity for personal hearing is not inherent in the right to participate in the assessment proceedings. The assessee may participate in the assessment proceedings by furnishing his written reply. If however, he seeks to avail of the opportunity of personal hearing, he may necessarily make a specific request, in that regard.

It was further held by the Division Bench that the word “request” used under Sections 144-B(6)(vii) and (viii) only implies, where an assessee may furnish his written reply to the show-cause notice but not opt to avail of the opportunity of personal hearing, it may not be mandatory for the assessing officer to grant such opportunity of personal hearing if he intends to accept the explanation furnished. He may pass appropriate ex parte order accepting the explanation furnished by the assessee. If however, on reading the explanation furnished, the assessing officer maintains his tentative opinion to pass the assessment order as proposed, that may be adverse to the assessee, he would necessarily fix a date for personal hearing and communicate the same to the assessee, through electronic mode as provided under the Act. Thereafter, it would be for the assessee to avail of that opportunity. If the assessee fails to avail of that opportunity, the assessing officer may proceed in accordance with law.

The Hon’ble High Court observed that though it may be true that earlier notices issued to the petitioner may have remained unresponded, it was equally true that on 3.12.2025, the last notice was issued to the petitioner only communicating to her the date for filing reply fixed for 12.12.2025. It is also true, though the petitioner did not file such reply within time, no assessment order came to be passed on 10.12.2025. That order was passed thirteen days thereafter, on 23.12.2025. No further notice or intimation was given to the petitioner on that date fixed. At the same time, it is apparent from the record and it may not be denied, on 15.12.2025, the petitioner did file her reply through electronic mode. The acknowledgement number generated by the system was itself proof of such reply being furnished. The impugned order did not bring out any consideration of the reply thus furnished. In fact, it records that the petitioner had not filed any reply.

The Hon’ble High Court held that in view of the law laid down in the earlier decision of the High Court, the petitioner did have a right of personal hearing distinct from her right to file objection/reply. Once a reply had been filed, it should have been considered by the assessing officer. If assessing officer were to reject the reply, he had to offer an opportunity of personal hearing to the petitioner.

The Hon’ble High Court opined that rules of natural justice had been breached both for reason of non-consideration of reply furnished and also for reason of date of personal hearing not fixed and not communicated before the impugned order of assessment came to be passed, procedural defect existed in the proceedings. It was equally true that the assessment order had been passed thirteen days after the last date fixed in the proceedings. That was also a procedural defect in the proceedings to the extent date had not been fixed for 23.12.2025 to pass the assessment order.

As a result, the impugned order was set aside. Matter remitted to the assessing authority to pass a fresh order after granting brief opportunity of hearing to the petitioner. It was further directed that if the petitioner intends to file any further reply, she may do so and may appear before the assessing authority.

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