3-WP-2408-2026.doc Bharat Thakkar Vs. The NFAC IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2048 OF 2026 Bharat Karsanas Thakkar ...Petitioner V/s. The National Assessment Centre & Ors. ...Respondents _______________________________________ Mr. Dharan V. Gandhi, for the Petitioner. Mr. N. C. Mohanty, for the Respondents. _______________________________________ CORAM : B. P. COLABAWALLA AND FARHAN P. DUBASH, JJ. DATE : 11th SEPTEMBER 2026 P. C.: 1. Rule. Rule made returnable forthwith. With the consent of the parties, the present petition is taken up for final disposal. 2. At the outset, Mr. Mohanty learned Counsel for the Respondents, tenders an Affidavit-in-Reply dated 6th August 2026 by one Mr. Sanjay Kumar, Income Tax Officer, Ward 2(1)(1), Mumbai. The same is taken on record. 3. The present Petition challenges, inter alia, the Assessment Order passed under Section 144B read with Section 147 of the Income Tax Act, 1961 (“the Act”) dated 26th March 2026, the notice of demand under Section 156 of the Act dated 26th March 2026, and the Show Cause Notices for levy of penalty all dated 26th March 2026, for Assessment Year 2021-22, whereby the total income of the Petitioner was assessed at Rs. 26,83,88,328/- and a demand of ------------------------------------- Order dated 11th September 2026 AMOL PREMNATH JADHAV Digitally signed by AMOL PREMNATH JADHAV Date: 2026.09.21 13:48:51 +0530 3-WP-2408-2026.doc Bharat Thakkar Vs. The NFAC Rs. 34,13,91,100/- was raised. 4. In this Petition, the Petitioner has also challenged the validity of the notice under Section 148 of the Act dated 29th March 2025 as well as the constitutional validity of the provisions of Section 147A and Section 292BC of the Act. However, learned Counsel for the Petitioner, on instructions, states that at present he wants to press his challenge against the Assessment Order and the consequential notice of demand and Show Cause Notices for levy of penalty. He submitted that all other issues may be kept open to be agitated in appropriate proceedings should the need arise. 5. The short ground on which the challenge has been laid to the Assessment Order and the consequential notices is that the same have been passed in gross violation of the principles of natural justice and in violation of the provisions of Section 144B of the Act read with the Standard Operating Procedures (“SOPs”) issued by the NFAC. From the records, it can be seen that the Petitioner was issued a Show Cause Notice on 20th March 2026, which was a Friday. Such notice was undisputedly signed and issued at 7:51 PM. This notice granted the Assessee time to reply by 23rd March 2026, i.e., Monday by 4:00 PM. In the Show Cause Notice, additions were proposed to the extent of Rs. 26,81,38,328/- comprising of disallowance of business expenses of Rs. 37,08,100/-, capital gains addition of Rs. 14,78,451/-, addition of Rs. 1,05,32,758/- under Section 56 towards interest from Hatgad Resorts Pvt. Ltd., and additions of Rs. 24,39,19,019/- and Rs. 85,00,000/- under Section 68 towards unexplained credits from M/s Swas Construction ------------------------------------- Order dated 11th September 2026 3-WP-2408-2026.doc Bharat Thakkar Vs. The NFAC Co. and M/s Terra Firma Trading LLP respectively. 6. In response to this notice, a personal hearing was sought. The personal hearing notice was issued on 22nd March 2026, which is a Sunday, undisputedly signed at 9:27 PM, and which directed the Assessee to appear for a personal hearing on the next day, i.e. 23rd of March 2026 at 12:10 PM. In response to such notice, the Petitioner had sought an adjournment requesting one day’s time to appear. Such request was not acceded to. As a result, the Petitioner’s representative was compelled to appear at the scheduled time of personal hearing. In the personal hearing, as pleaded in paragraph 3.21 of the Petition, the representative for the Petitioner sought a day’s time to file a Reply to the Show Cause Notice and for a personal hearing. However, the same was refused. Further, in paragraph 3.22 of the Petition, it has been pleaded that the Petitioner tried to upload the Reply by 4:30 PM on 23rd March 2026. However, by such time the portal was closed for filing of Reply. Ultimately, an Assessment Order has been passed on 26th March 2026. In paragraph 4.5 of the Assessment Order [which is at page 470 of the Petition], it has been mentioned that despite sufficient opportunities, the Assessee did not submit any written reply to Show Cause Notice. Consequently, various additions have been made. 7. None of the above facts have been disputed in the Affidavit-in-Reply filed by the Respondents. However, what has been stated in the Reply is that the Petitioner appeared on video conference and made submissions which have been considered. ------------------------------------- Order dated 11th September 2026 3-WP-2408-2026.doc Bharat Thakkar Vs. The NFAC 8. After perusing the record and hearing the parties, we find that the Assessment Order has been passed in gross violation of the principles of natural justice for the following reasons: a) Firstly, admittedly the Show Cause Notice was issued on 20th March 2026, which is a Friday, late in the evening. The Petitioner was granted time to Reply by 23rd March 2026, i.e. a Monday, by around 4:00 PM. Effectively, only one working day’s time was given to the Petitioner to file their Reply. This is in contravention of the SOPs laid down by the National Faceless Assessment Centre which requires a minimum of 7 working days time to file the Reply. In any event, one working day’s time to file the Reply is clearly insufficient. Further, the request of the Petitioner to grant one more day’s time to file Reply was rejected. This is also not justifiable. b) The notice for personal hearing was issued on 22nd of March 2026 late in the evening at about 9:30 PM requiring the Petitioner to appear the next day afternoon at about 12:10 PM. This again grants insufficient time for the Petitioner to appear for the personal hearing i.e., not even 24 hours. Moreover, the Show Cause Notice itself provides that prior to a personal hearing being granted, the Assessee is given an opportunity to reply to the Show Cause Notice. In the present case, a personal hearing was scheduled before the time to file the Reply had expired. This is again not tenable. ------------------------------------- Order dated 11th September 2026 3-WP-2408-2026.doc Bharat Thakkar Vs. The NFAC c) The Petitioner’s request to adjourn the personal hearing by one day was not accepted. The request of adjournment was, in our view, very reasonable and not acceding to such request was wholly unjustified. 9. From what is narrated above, it is clear that the Assessment Order has been passed without granting the Petitioner sufficient opportunity of being heard inasmuch as insufficient time was given to the Petitioner to file its Reply and to appear for a personal hearing. Further, a reasonable request for adjournment for even one day was not accepted. In light of the above, we are of the clear opinion that the present matter requires interference, and we accordingly do so. The impugned Assessment Order dated 26th March 2026, the notice of demand dated 26th March 2026, and the Show Cause Notices for levy of penalty of the same date, are all hereby quashed and set aside. 10. We now remand the matter to the file of the Assessing Officer to commence the proceedings from the stage of the Show Cause Notice. He shall reopen the proceeding on the portal and issue an intimation to the Petitioner to file his Reply to the Show Cause Notice. A minimum period of 7 working days should be given to the Petitioner to file his Reply to the Show Cause Notice. Further, the Petitioner shall be afforded an opportunity of being heard personally through video conferencing, a notice whereof shall be served at least 3 working days in advance. If the Assessing Officer wants to rely upon any decisions or any other material, he shall provide a copy thereof to the Petitioner and grant him an opportunity to deal with the same before passing of the Assessment Order. The Assessment Order so passed shall be a ------------------------------------- Order dated 11th September 2026 3-WP-2408-2026.doc Bharat Thakkar Vs. The NFAC speaking order dealing with all the contentions raised by the Petitioner. The above process of completion of assessment should be done within a period of 12 weeks from the date of uploading of this order on the High Court website. 11. All other contentions raised in the Petition including challenge to the validity of the notice issued under Section 148 of the Act are expressly kept open for the parties to agitate in appropriate appellate proceedings, if the need so arises. 12. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs. 13. This order will be digitally signed by the Private Secretary / Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order. ( FARHAN P. DUBASH, J. ) ( B. P. COLABAWALLA, J. ) Amol ------------------------------------- Order dated 11th September 2026