2019 (1) TMI 1954 - HC - Income Tax

Validity of Reopening of assessment u/s 147 - Petitioner having not filed the objections before the AO against the reasons stated for re-opening - HELD THAT - Petitioner by way of their communication requested the Assessing Officer to provide the reasons for re-opening the assessment. Consequently the AO furnished those reasons through their communication. Even though such communication intimating the reasons for re-opening was received by the assessee admittedly they have not chosen to file any objections before the Assessing Officer. Needless to say that when no objection is received from the assessee on the reasons set out for re-opening the assessment the Assessing Officer cannot be found fault with in passing the consequential assessment order dated 07.12.2018 under Section 143(3) r/w 147 of the IT Act, 1961. This is what happened in the present case. Therefore the petitioner having not filed the objections before the Assessing Officer against the reasons stated for re-opening is not entitled to question about the re-opening before this Court by way of filing the present writ petition. On the other hand it is for the assessee/petitioner to file a regular statutory appeal before the First Appellate Authority as this Court is not inclined to entertain this writ petition only on the above stated reasons. The other contentions raised on merits of the assessment are not considered by this Court by expressing any view. Writ petitions are disposed of by granting liberty to the petitioner to file a statutory appeal before the Appellate Authority by raising all the contentions within a period of four weeks from the date of receipt of a copy of this order.

Summary

Issues:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 for re-opening the assessment.
2. Legality of the assessment order passed under Section 143(3) r/w 147 of the Income Tax Act.
3. Failure to file objections to the reasons for re-opening the assessment.

Analysis:

Issue 1: Validity of notice under Section 148
The petitioner challenged the notice issued under Section 148 of the Income Tax Act, 1961, dated 23.03.2018, for re-opening the assessment relevant to the assessment year 2011-2012. The Assessing Officer provided the reasons for re-opening through a communication dated 10.10.2018, to which the petitioner did not file any objections. The court noted that in the absence of objections from the assessee, the Assessing Officer was justified in passing the consequential assessment order dated 07.12.2018 under Section 143(3) r/w 147 of the IT Act, 1961. The court emphasized that failure to challenge the reasons for re-opening before the Assessing Officer barred the petitioner from questioning the re-opening through a writ petition.

Issue 2: Legality of the assessment order
The petitioner argued that the assessment order should be set aside as the reasons for re-opening were based on materials already available during the original assessment. However, the court held that since the petitioner did not object to the reasons provided by the Assessing Officer, the assessment order passed under Section 143(3) r/w 147 of the IT Act, 1961, was valid. The court clarified that challenging the merits of the assessment should be done through a regular statutory appeal, not a writ petition.

Issue 3: Failure to file objections
The court highlighted that the petitioner's failure to file objections to the reasons for re-opening the assessment prevented them from questioning the re-opening in the writ petition. The court directed the petitioner to pursue the matter through a statutory appeal before the Appellate Authority within four weeks from the date of the court's order. The court specified that the Appellate Authority should consider the appeal on its merits and in accordance with the law, without being constrained by the period of limitation.

In conclusion, the court disposed of both writ petitions, granting the petitioner the liberty to file a statutory appeal before the Appellate Authority within a specified period. The court emphasized the importance of following the statutory appeal process for challenging the assessment, rather than resorting to writ petitions without raising objections at the appropriate stage.