2019 (7) TMI 1850 - HC - Income Tax

Validity of reopening of assessment u/s 147 - procedure to be followed pursuant to the issuance of notice - grounds raised grounds stating that the notice is barred by limitation as contemplated under Section 148 of the Act and that the reasons which are sought to be adduced, are of such of opinion, which is improper - HELD THAT - When the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd's case 2002 (11) TMI 7 - SUPREME COURT had categorically clarified the procedure to be followed pursuant to the issuance of notice, which includes filing of returns and seeking for objections, it cannot be said that such a contention is opposed to the provisions of the Act and further submitted that the decision should not be followed is far-fetched. Since this Court has relied upon the decision of GKN Driveshafts (India) Ltd's case of the Hon'ble Supreme Court, which has a binding nature on this Court in view of Article 141 of the Constitution of India, I am not relying upon any of the other decisions cited by the learned counsels. Writ Petitions stand closed with liberty to the petitioner either to file their returns or seek for reasons, if not already given. Such an exercise of raising their objections shall be done within a period of four weeks from the date of receipt of a copy of this order. In case, such objections are filed before the assessing officer, the same shall be considered in accordance with law and reasoned speaking orders shall be passed, as expeditiously as possible

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 based on grounds of limitation and improper reasons.

Analysis:
In the present case, multiple Writ Petitions challenge the notice issued under Section 148 of the Income Tax Act, 1961. The main contention raised by the learned counsels is that the notice is time-barred as per Section 148 of the Act and that the reasons provided are deemed improper. The counsels have relied on various judgments of the Hon'ble Supreme Court to support their arguments.

The Court, after considering the arguments, decided to primarily rely on the decision of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. Income-tax Officer. This judgment clarified the procedure to be followed post the issuance of a notice under Section 148, emphasizing the importance of filing returns, seeking objections, and receiving a reasoned speaking order from the assessing officer. The Court highlighted that this decision holds binding authority as per Article 141 of the Constitution of India.

The petitioner's counsel contested the applicability of the GKN Driveshafts case to the provisions of the Act, arguing that it should not be considered binding. However, the Court dismissed this argument, emphasizing that the Supreme Court's decision clearly outlines the post-notice procedure, which aligns with the Act's provisions. Consequently, the Court decided not to rely on other judgments cited by the counsels, as the GKN Driveshafts case held precedence.

As a result of the above analysis, the Court ordered the closure of the Writ Petitions, granting the petitioners the liberty to either file their returns or request reasons if not already provided. The petitioners were instructed to raise objections within four weeks from the date of receiving the order. Any objections filed were to be considered by the assessing officer promptly, with reasoned speaking orders to be passed expeditiously. The Court concluded by stating that no costs were to be awarded, and connected Miscellaneous Petitions were also closed.