2016 (4) TMI 313 - HC - Income Tax

Reopening of assessment - Held that - It is undisputed that pursuant to the notices dated 25 November 2013 and 4 October 2013 issued by the Assessing Officer annexing therewith the reasons, the assessee submitted objection dated 19 November 2013 (Annexure-8) in which the details of interest received from various persons and the interest income disclosed in the tax return for the assessment year 2008-09 have been mentioned It has also been stated that there is no suppression as alleged in the notice and in this connection the assessee placed the Income Tax return and the disclosure made therein in Schedule TDS-2. Therefore, the Assessing Officer could not have in such circumstances observed in the order dated 7 February 2014 that the objections were vague and infructuous. GKN Driveshafts (India) Ltd. v. Income Tax Officer 2002 (11) TMI 7 - SUPREME Court we clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order.

Summary

Issues:
Challenge to reassessment proceedings for AY 2008-09 based on objections being considered vague.

Analysis:
The writ petition was filed seeking to quash the reassessment proceedings initiated against the petitioner for the assessment year 2008-09. The petitioner's objections to the reassessment notice were deemed vague by the Assistant Commissioner, Income Tax Officer, Kanpur. However, the petitioner had submitted objections specifying details of interest income received during the relevant assessment year. The court noted that the objections were not vague as alleged, as the petitioner had provided detailed information, including interest income disclosed in the tax return. The court referred to the duty of the assessing authority to decide objections as established in the case of GKN Driveshafts (India) Ltd. v. Income Tax Officer and Others. The Supreme Court clarified the procedure for handling objections to a notice under Section 148 of the Income Tax Act, emphasizing the requirement for the Assessing Officer to dispose of objections by passing a speaking order.

The court set aside the order deeming the objections vague and directed the Assessing Officer to pass a fresh order considering the objections filed by the petitioner before proceeding further with the reassessment proceedings. The judgment allowed the writ petition to the extent indicated, providing relief to the petitioner by ensuring a proper consideration of objections in accordance with the law.

This detailed analysis highlights the key legal arguments, procedural aspects, and the court's decision in addressing the challenge to the reassessment proceedings for the assessment year 2008-09 based on the alleged vagueness of objections raised by the petitioner.