2014 (10) TMI 623 - HC - Income Tax

Maintainability of appeal Alternate remedy availed by assessee - Validity of notice for reopening of assessment u/s 148 Held that - The assessee has already invoked an efficacious alternative of filing an appeal to CIT(A) raising all the issues including the issue of jurisdiction to reopen the assessment for AY 2007-08 - the conduct of the AO in delaying the proceeding and thereafter pleading helplessness by stating that unless he passes the reassessment order before 31 March 2014 the same would become time barred is a little strange - This conduct on the part of the AO is not appreciated - The entire procedure of giving of reasons and dealing with objections before reassessment proceedings can commence as decided in GKN Driveshafts (I) Ltd. v/s. I.T.O. 2002 (11) TMI 7 - SUPREME Court was only to ensure that the reassessment proceedings are not taken by the AO without satisfaction of the preconditions of Sections 147 and 148 of the Act as a safeguard against harassment the hurry in passing Assessment order could lead to injustice not only to the assessee but also to the Revenue as it is likely the proper consideration would not be given to the issues involved - However, as the asessee has already invoked an efficacious alternative remedy by filing an appeal before CIT (A), there no reason to entertain the petition - All contentions left open to be urged before CIT(A) Decided against assessee.

Summary

Issues Involved:
Challenging notice seeking to reopen assessment for Assessment Year 2007-08 under Section 148 of the Income Tax Act, 1961; Disposing objections raised by the petitioners to the grounds relied for issuing the notice; Assessment order passed by the Assessing Officer.

Analysis:

Challenging Notice Seeking to Reopen Assessment:
The petition under Article 226 challenged the notice dated 12 March 2013 issued under Section 148 of the Income Tax Act, 1961, seeking to reopen assessment for Assessment Year 2007-08. The petitioner contended a gross delay by the Assessing Officer in providing reasons for the notice and in disposing of objections raised. The delay led to a situation where the reassessment proceedings had to be completed before the deadline to avoid time-bar. The petitioner argued that such delays hindered their ability to challenge the reassessment notices in court. However, the court declined to entertain the petition on merits as the petitioner had already filed an appeal to the Commissioner of Income Tax (Appeals) (CIT-A), addressing all issues, including jurisdiction to reopen the assessment.

Disposing Objections to Grounds Relied for Notice:
The Assessing Officer's conduct in delaying proceedings and then rushing to complete reassessment before the deadline was criticized by the court. The court noted that the reasons for the notice were furnished almost 10 months after the petitioner's request, and objections were disposed of with undue delay. The court emphasized that the process of giving reasons and addressing objections before reassessment was crucial to prevent harassment and ensure compliance with statutory provisions. The court expressed concern that the haste in passing the assessment order due to delays could lead to injustice for both the assessee and the Revenue. The court urged the Revenue to ensure expeditious handling of such matters to avoid such situations in the future.

Assessment Order Passed by the Assessing Officer:
The Assessing Officer passed the assessment order for Assessment Year 2007-08 on 29 March 2014. The petitioner filed an appeal to the CIT(A) against this order, including challenging the jurisdiction for issuing the notice under Section 148 of the Act. The court acknowledged the petitioner's right to appeal and decided not to entertain the petition further. However, in a unique circumstance, the court directed that no coercive proceedings for tax recovery would be initiated by the Revenue until the petitioner's appeal before the CIT(A) was resolved. The court concluded the judgment with observations on the conduct of the Assessing Officer and disposed of the petition without any costs.