APHC010187852026 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3529] TUESDAY, THE FIFTH DAY OF MAY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION NO: 12387/2026 Between: 1. SURYA BHASKARAM PALLA,, S/O. SREE RAMULU PALIA, AGED ABOUT 65 YEARS R/O. H.NO. 1-107, MERAKA STREET, PANDURU, KAKINADA DISTRICT, ANDHRA PRADESH - 533005. ...PETITIONER AND 1. UNION OF INDIA, REP. BY ITS SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, INCOME TAX DEPARTMENT, NEW DELHI. 110001 2. THE PRINCIPAL COMMISSIONER OF INCOME TAX, OFFICE AT 50- 92-35, INFINITY TOWERS, INCOME TAX OFFICE, SANKARA MATAM ROAD, OPPOSITE RELIANCE FRESH, DWARAKA NAGAR, VISAKHAPATNAM, ANDHRA PRADESH - 530016. 3. THE ASSESSMENT UNIT INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI - 110003.. ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased tomay be pleased to issue an appropriate Writ, Order or Direction, more particularly one in the nature of Writ of Mandamus, declaring the action of the Respondent No.3s, particularly Respondent No.3 in issuing the show cause notice dated 25.02.2026 and passing the Assessment Order bearing 2 RRR,J & TCDS,J W.P.No.12387 of 2026 ITBA/AST/S/144/2025-26/1087227963(1) dated 12.03.2026 under Section 144 read with Section 144B of the Income Tax Act, 1961, for the Assessment Year 2021-22, as illegal, arbitrary, contrary to the provisions of the Income Tax Act, 1961, violative of the mandatory procedure prescribed under Section 144B and the binding Standard Operating Procedure governing faceless assessments, CBDT Circular NoO.36/2016 dated 25.10.2016, violative of the principles of natural justice, and violative of Articles 14 and 265 of the Constitution of India, and consequently set aside the said Assessment Order dated 12.03.2026, and further direct the Respondent No.3 to extend to the Petitioner the benefit of exemption in respect of the compensation received on compulsory acquisition of agricultural land and to delete the addition of 10,89,200/- made under Section 69A of the Act, and pass such IA NO: 1 OF 2026 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to STAY all further proceedings pursuant to the Assessment Order bearing ITBA/AST/S/144/2025-26/1087227963(1) dated 12.03. 2026, passed under Section 144 read with Section 144B of the Income Tax Act, 1961, and all consequential proceedings initiated or proposed to be initiated by the Respondent No.3 and pass such Counsel for the Petitioner: 1. KADIMISETTY SAI SREENADH Counsel for the Respondent(S): 1. 3 RRR,J & TCDS,J W.P.No.12387 of 2026 The Court made the following Order: (per Hon’ble Sri Justice R. Raghunandan Rao) Heard Sri Dheera Kanishka, the learned counsel appearing on behalf of Sri Kadimisetty Sai Sreenadh, the learned counsel appearing for the petitioner and the learned Standing Counsel for Income Tax, appearing for the respondents. 2. The petitioner has approached this Court, for challenging a show-cause notice, dated 25.02.2026 as well as the subsequent order of assessment, dated 12.03.2026, passed under Section 144 of the Income Tax Act, 1961, for the assessment year, 2021-2022. 3. The petitioner had received an amount of Rs.58,75,000/- as well as cash deposits of Rs.10,89,200/-, during the assessment year, 2021-2022. 4. Both the aforesaid amounts were added to the income of the petitioner, in the order of assessment, passed by the assessing authority. Aggrieved by the same, the petitioner had filed an Appeal, which came to be remanded, for a fresh assessment order to be passed, after an adequate opportunity of hearing was given to the petitioner. Thereafter, the Assessing Officer, issued a show-cause notice, dated 25.02.2026, calling upon the petitioner to produce documentary evidence to demonstrate that the sum of Rs.58,75,000/-, received by the petitioner was on account of compulsory acquisition of the land of the petitioner. The time given for production of such documentary evidence was 5 days, ending with 02.03.2026. Thereafter, the Assessing 4 RRR,J & TCDS,J W.P.No.12387 of 2026 Officer, had also passed an order of assessment, dated 12.03.2026, confirming the proposed addition of income, in the show-cause notice. 5. Aggrieved by this order, the petitioner, approached this Court, by way of this Writ Petition, contending that, both the show-cause notice and the subsequent order of assessment, were in violation of Standard Operating Procedure, issued by way of a Circular, dated 03.08.2022, and more specifically, clause N.1.3. & N.1.3.1., which stipulated that, a minimum period of 7 days would be granted as response time, in relation to any show-cause notice and such time could be curtailed, in the event of limitation for completing the assessment does not permit for grant of such time. 6. A perusal of the said Circular, shows that, the minimum time that had been granted to the petitioner was 7 days in as much as the limitation, for the said assessment, would expire only, on 31.03.2026. 7. In that view of the matter, it must be held that the order of assessment as well as show-cause notice, are not in compliance of the Standard Operating Procedure, which is circulated by the proceedings, dated 03.08.2022, issued by the National Faceless Assessment Centre, Delhi. 8. Apart from this, it can also be held that, there is violation of Principles of Natural Justice as a reasonable time, as stipulated, under the Standard Operating Procedure, had not been granted. 5 RRR,J & TCDS,J W.P.No.12387 of 2026 9. For both the aforesaid reasons, the show-cause notice, dated 25.02.2026, as well as assessment order, dated 12.03.2026, are set aside and the matter is remanded back to the Assessing Authority to take up fresh assessment, after due opportunity of hearing is given to the petitioner. 10. Accordingly, this Writ Petition is allowed. There shall be no order as to costs. As a sequel, pending miscellaneous applications, if any, shall stand closed. ________________________ R. RAGHUNANDAN RAO, J _________________ T.C.D. SEKHAR, J Date:05.05.2026 KPV 6 RRR,J & TCDS,J W.P.No.12387 of 2026 19 THE HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO AND THE HON'BLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION No.12387 of 2026 (per Hon’ble Sri Justice R. Raghunandan Rao) 05.05.2026 KPV