You asked for a video hearing after the show cause notice and the order came anyway. Is that fatal?
Yes. Once you have responded to a show cause notice under s.144B and asked for a personal hearing, the request must be taken into account, and ordinarily it will not be refused. An order passed without dealing with that request is unsustainable, and the fact that a further remedy exists later in the process does not cure it.
Decided by the High Court (Sunil P. Deshmukh J and Abhay Ahuja J) on 2021-07-30, reported as Writ Petition (L) No. 11040 of 2021 (Bombay High Court); (2021) 282 Taxman 407 / 205 DTR 81 / 322 CTR 370 (Bom.). It bears on section 144B, section 143(3), section 144C of the Income Tax Act 1961, in Faceless Assessment & Appeals and Assessment & Scrutiny matters.
This is the Bombay High Court's fullest statement on the hearing right inside s.144B, and it disposes of the Department's favourite answer, that you will get your say at the next stage anyway. The Court held the s.144B hearing is a right of its own and cannot be displaced by the later s.144C route.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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For assessment year 2017-18 the petitioner, a pharmaceutical company, filed a return declaring nil income in November 2017 and a revised return in March 2019. On 25 March 2021 the National e-Assessment Centre issued a show cause notice proposing very large additions, including amounts under s.14A, differences in turnover, differences in opening and closing stock and a transfer pricing adjustment. The petitioner wrote on 26 March 2021 and 28 March 2021 asking for a personal hearing through video conferencing, and filed its substantive responses on 7 and 8 April 2021. No hearing was given. A draft assessment order under s.144C(1) read with s.143(3) was passed on 22 April 2021. The petitioner moved the High Court under Article 226 contending that the procedure in s.144B, including the hearing contemplated by s.144B(7)(vii), had not been followed.
The petition was allowed. The draft assessment order dated 22 April 2021 was held unsustainable and the authorities were left free to carry the process forward in accordance with s.144B after giving the petitioner an opportunity of hearing (para 69). The Court held that where an assessee responds to a show cause notice and asks for a personal hearing, that request has to be taken into account, and it would not be proper to answer it by saying that an opportunity will arise later under s.144C.
The Court read the hearing provisions as part of the statutory fabric rather than as a concession. Principles of natural justice run through s.144B(1), and where a draft, final draft or revised draft assessment order is prejudicial to the assessee, a personal hearing for oral submissions on a request from the assessee is strongly entwined in the provisions unless the request is absurd, strategised or intended to protract the assessment; ordinarily such a request would not be declined (para 63). Since hearing has been envisioned and incorporated in s.144B, it is imperative to observe the principles of natural justice as stipulated (para 66). On the facts, the show cause notice of 25 March 2021 had been answered by letters of 26 and 28 March 2021 requesting personal hearing and by responses of 7 and 8 April 2021, and there was nothing to show that the prescribed procedure was followed thereafter, so the petitioner was losing an opportunity available under clause (xxiii)(b) read with sub-section (7) sub-clause (vii) (para 67). The Court rejected the argument that the later opportunity under s.144C answered the complaint, holding that this would intercept the operation of the scheme contained in s.144B (para 68).
Principles of natural justice firmly run through fabric of section 144B(1) of the Income Tax Act, 1961.
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Handle my notice → Ask a CA on WhatsAppYes. Once you have responded to a show cause notice under s.144B and asked for a personal hearing, the request must be taken into account, and ordinarily it will not be refused. An order passed without dealing with that request is unsustainable, and the fact that a further remedy exists later in the process does not cure it. This was decided by the High Court (Sunil P. Deshmukh J and Abhay Ahuja J) and bears on section 144B, section 143(3), section 144C of the Income Tax Act 1961. It is reported as Writ Petition (L) No. 11040 of 2021 (Bombay High Court); (2021) 282 Taxman 407 / 205 DTR 81 / 322 CTR 370 (Bom.). This is the Bombay High Court's fullest statement on the hearing right inside s.144B, and it disposes of the Department's favourite answer, that you will get your say at the next stage anyway. The Court held the s.144B hearing is a right of its own and cannot be displaced by the later s.144C route. If it applies to you, the first step is this: Put the request for personal hearing in writing in the reply to the show cause notice itself, not in a separate letter, and keep the acknowledgement.
For assessment year 2017-18 the petitioner, a pharmaceutical company, filed a return declaring nil income in November 2017 and a revised return in March 2019. On 25 March 2021 the National e-Assessment Centre issued a show cause notice proposing very large additions, including amounts under s.14A, differences in turnover, differences in opening and closing stock and a transfer pricing adjustment. The petitioner wrote on 26 March 2021 and 28 March 2021 asking for a personal hearing through video conferencing, and filed its substantive responses on 7 and 8 April 2021. No hearing was given. A draft assessment order under s.144C(1) read with s.143(3) was passed on 22 April 2021. The petitioner moved the High Court under Article 226 contending that the procedure in s.144B, including the hearing contemplated by s.144B(7)(vii), had not been followed. The matter was decided on 2021-07-30 by the High Court (Sunil P. Deshmukh J and Abhay Ahuja J). On those facts the High Court held as follows. The petition was allowed. The draft assessment order dated 22 April 2021 was held unsustainable and the authorities were left free to carry the process forward in accordance with s.144B after giving the petitioner an opportunity of hearing (para 69). The Court held that where an assessee responds to a show cause notice and asks for a personal hearing, that request has to be taken into account, and it would not be proper to answer it by saying that an opportunity will arise later under s.144C.
The Court read the hearing provisions as part of the statutory fabric rather than as a concession. Principles of natural justice run through s.144B(1), and where a draft, final draft or revised draft assessment order is prejudicial to the assessee, a personal hearing for oral submissions on a request from the assessee is strongly entwined in the provisions unless the request is absurd, strategised or intended to protract the assessment; ordinarily such a request would not be declined (para 63). Since hearing has been envisioned and incorporated in s.144B, it is imperative to observe the principles of natural justice as stipulated (para 66). On the facts, the show cause notice of 25 March 2021 had been answered by letters of 26 and 28 March 2021 requesting personal hearing and by responses of 7 and 8 April 2021, and there was nothing to show that the prescribed procedure was followed thereafter, so the petitioner was losing an opportunity available under clause (xxiii)(b) read with sub-section (7) sub-clause (vii) (para 67). The Court rejected the argument that the later opportunity under s.144C answered the complaint, holding that this would intercept the operation of the scheme contained in s.144B (para 68). In the words reproduced by the source cited on this page: "Principles of natural justice firmly run through fabric of section 144B(1) of the Income Tax Act, 1961."
It was decided by the High Court on 2021-07-30 and is reported as Writ Petition (L) No. 11040 of 2021 (Bombay High Court); (2021) 282 Taxman 407 / 205 DTR 81 / 322 CTR 370 (Bom.). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 144B, section 143(3), section 144C, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The petition was allowed. The draft assessment order dated 22 April 2021 was held unsustainable and the authorities were left free to carry the process forward in accordance with s.144B after giving the petitioner an opportunity of hearing (para 69). The Court held that where an assessee responds to a show cause notice and asks for a personal hearing, that request has to be taken into account, and it would not be proper to answer it by saying that an opportunity will arise later under s.144C. It arises in Faceless Assessment & Appeals and Assessment & Scrutiny matters, on section 144B, section 143(3), section 144C of the Income Tax Act 1961, and was decided by Sunil P. Deshmukh J and Abhay Ahuja J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Record the request again in every subsequent submission so the trail is unbroken. If the order comes without the hearing, check whether the file shows any reason for refusing it; the Court's point is that a refusal must be justified, not silent. Do not accept the argument that the draft order route under s.144C or an appeal makes the s.144B hearing unnecessary - para 68 rejects exactly that.
Searched for later treatment; none was found. That is not the same as a source affirming it. No later decision doubting this judgment was searched for or found. The judgment was cited on behalf of the assessee before the Mumbai Bench of the Tribunal in Sahyadri Erectors Pvt Ltd v National e-Assessment Centre (ITA No. 4396/MUM/2023, order dated 12 March 2026), where it is recorded at para 4.3(d) among the authorities relied on by counsel; the Tribunal decided the appeal on Trendsutra Client Services (Bom.)(HC) and did not reproduce or expressly rely on paragraph 63. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The report citation (2021) 282 Taxman 407 / 205 DTR 81 / 322 CTR 370 (Bom.) is carried by the itatonline digest of this judgment, which digests it under s.144B for AY 2017-18, matching this decision. The writ petition number and date are taken from the judgment itself. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The petition was allowed. The draft assessment order dated 22 April 2021 was held unsustainable and the authorities were left free to carry the process forward in accordance with s.144B after giving the petitioner an opportunity of hearing (para 69). The Court held that where an assessee responds to a show cause notice and asks for a personal hearing, that request has to be taken into account, and it would not be proper to answer it by saying that an opportunity will arise later under s.144C.
TaxSphere, “Piramal Enterprises Ltd v Addl/Jt/Dy/Asst CIT”, https://taxnotice.vittsphere.com/caselaw/case/piramal-enterprises-personal-hearing-144b/ (validity last checked 2026-09-06)
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