2016 (7) TMI 932 - HC - Income Tax

Reopening of assessment - International transaction - Held that - Prima facie the sanction for re-opening the assessment of the Commissioner of Income Tax was also in respect of International transaction, which was a subject matter of assessment completed much prior to 1st day of July, 2012. Therefore, the impugned notice is hit by Sub-Section (2B) of Section 92CA of the Act. As this objection goes to the root of matter, it would be appropriate that this objection of the petitioner be considered by the Assessing Officer and disposed of expeditiously. It is true that normally we would not let an assessee challenge a reopening notice before us on a ground not taken in the objections made to the Assessing Officer. However, on the face of it, it appears that the impugned notice is without jurisdiction. However, rather then admitting the petition and staying the notice in the peculiar facts, the Assessing Officer should have a chance to deal with it. In the above view at this stage, we are not disturbing the impugned notice or the order disposing of the objection and only directing the Assessing Officer to consider the petitioner s objections in respect of Section 92CA (2C) of the Act. It is made clear that in case the petitioner files its objections/representation with regard to Section 92CA (2C) of the Act within one week from today, the Assessing Officer will dispose of the same within a period of four weeks from the date the petitioner file its objections/representation only on the issue of Section 92CA (2C) of the Act. It is made clear that with regard to the other objections contended by the petitioner we are not inclined to entertain this petition. We direct a stay of the impugned notice for further period of ten weeks from today. This would enable the petitioner to challenge the order disposing of the objection in respect of Section 92CA of the Act raised by the petitioner

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for Assessment year 2008-09; Jurisdiction of the Assessing Officer; Sanction by the Commissioner of Income Tax; Interpretation of Section 92CA (2C) of the Act regarding reassessment for completed assessment years.

1. Challenge to notice under Section 148:
The petitioner challenged a notice dated 31st March, 2015, seeking to re-open the Assessment for Assessment year 2008-09 under Article 226 of the Constitution of India. The Assessing Officer explained a mistakenly issued notice dated 17th June, 2016, which was withdrawn promptly. The petitioner raised objections regarding the jurisdiction of the Assessing Officer, the date of issuance of the notice, and the sanction by the Commissioner of Income Tax. The court found the impugned notice was validly issued on 31st March, 2015, and the reasons were signed by the correct Assessing Officer, despite a typographical error in mentioning the section.

2. Jurisdiction of the Assessing Officer:
The petitioner contended that the impugned notice lacked jurisdiction due to the involvement of a different officer in obtaining the sanction. However, the court held that the reasons for the notice were indeed signed by the correct Assessing Officer, and the typographical error in mentioning the officer's designation did not invalidate the notice. Thus, the objections regarding jurisdiction were dismissed.

3. Interpretation of Section 92CA (2C) of the Act:
The petitioner cited Section 92CA (2C) of the Act, which restricts the Assessing Officer from reassessing completed assessment years before 1st July, 2012. The regular assessment for the year 2008-09 was completed on 18th October, 2010. The court noted that the sanction for re-opening the assessment was related to an international transaction completed before the specified date, rendering the impugned notice in violation of Section 92CA (2C). Although the issue was not raised during objections, the court allowed it to be considered by the Assessing Officer due to its critical nature.

4. Conclusion:
The court directed the Assessing Officer to expeditiously consider the petitioner's objections regarding Section 92CA (2C) of the Act. A stay of the impugned notice was granted for ten weeks to enable the petitioner to challenge the objection disposal order. It was emphasized that objections related to other issues raised by the petitioner would not be entertained. The judgment was delivered in favor of the petitioner on the grounds of Section 92CA (2C) violation, allowing further proceedings to address this specific issue.

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