Authority: Calcutta High Court (High Court at Calcutta)

Order Date: 25 June 2026

Case Overview

  • Parties: Petitioner – Pricewaterhouse Coopers Private Limited (consultancy company); Respondents – Assistant Commissioner of Income Tax, Circle‑1 (1) Aayakar Bhawan & others, including the Jurisdictional Assessing Officer, National Faceless Assessment Centre (NFAC), and the Union of India.
  • Petition: Challenged the Assessment Order dated 30 March 2026 passed under Section 143(3) of the Income Tax Act, 1961 for Assessment Year 2024‑25, together with a demand and penalty of Rs 87,20,87,760.
  • Procedural Timeline:
  • 29 Nov 2024: Return filed electronically declaring loss of Rs 52,27,57,732.
  • 28 Jan 2025: Return processed, resulting in refund of Rs 134,29,45,540.
  • 3 Jun 2025: Return modified, loss declared as Rs 42,51,35,850.
  • 24 Jun 2025: Case selected for scrutiny assessment; preliminary details submitted on 9 Jul 2025 and 11 Jul 2025.
  • 29 Jul 2025 & 21 Nov 2025: NFAC issued notices under Section 142(1); petitioner replied on 18 Aug 2025 and 16 Dec 2025 respectively.
  • 22 Dec 2025: Case transferred from NFAC to the Jurisdictional Assessing Officer (JAO).
  • 27 Jan 2026, 6 Mar 2026, 12 Mar 2026: JAO issued further notices under Section 142(1); petitioner replied on 13 Mar 2026, 19 Mar 2026 and filed two additional replies on 25 Mar 2026.
  • 28 Mar 2026: Show‑cause notice issued alleging PwC’s involvement in the acquisition of KSK Energy Ventures Ltd by Gland Celsus Bio Chemicals Pvt Ltd and seeking explanation of any consultancy fees.
  • 30 Mar 2026: PwC complied with the show‑cause notice; on the same day the Assessing Officer passed the impugned Assessment Order demanding Rs 87,20,87,760, without granting a reasonable hearing.
  • Petitioner’s Contentions: No proper show‑cause notice; denial of effective hearing; reliance on CBDT Instructions No. 20/2015, No. 8/2017, No. 1/2018 and Circular 27/2019 which mandate a show‑cause before disallowance; cited precedents (Inox Wind Energy Ltd vs ACIT, e‑Shakti.com Pvt Ltd vs ACIT, Sahara India Firm vs CIT) emphasizing natural‑justice requirements.
  • Respondent’s Contentions: Multiple opportunities were provided via notices; cited circulars predating Section 144B as inapplicable; argued petitioner has an efficacious alternative remedy through appeal; relied on judgments limiting writ jurisdiction when alternative remedies exist (Thansing Nathmal vs Superintendent of Taxes, Britannia Industries Ltd vs Union of India).

Final Outcome

  • The Court held that the Assessment Order dated 30 Mar 2026 was vitiated by gross violation of natural‑justice principles and the denial of an effective opportunity of hearing.
  • The writ petition was deemed maintainable despite the existence of an alternative statutory remedy.
  • Consequently, the Assessment Order, the demand notice and all related penalty proceedings were quashed and set aside.
  • The matter was remanded to the Assessing Officer for a fresh assessment, with a mandatory personal hearing to be granted; the new assessment must be passed within eight weeks of this order.
  • No costs were awarded; parties are to receive a certified copy of the order on priority; no adjournments are permitted; the petition WPO 212 of 2026 and all connected applications were allowed and disposed of.

Topics: Tax Assessment; Natural Justice