2018 (5) TMI 1327 - HC - Income Tax

Reopening of assessment - objections filed by the petitioner pursuant to the notice issued u/s 148 not been disposed of by the respondent-Authority - non passing a speaking order - Held that - Passing of the assessment order sans disposing of the objections raised subsequent to issuance of the notice under Section 148 of the Act is untenable and accordingly, the impugned assessment order as well as the demand notice are set-aside. See M/S. DEEPAK EXTRUSIONS PVT. LTD. VERSUS DCIT 2017 (3) TMI 1257 - KARNATAKA HIGH COURT - Decided in favour of assessee.

Summary

Issues:
Challenge to order under Section 147 r/w 143(3) of the Income-tax Act, 1961 and demand notice for assessment year 2009-10.

Analysis:
The petitioner challenged the order passed under Section 147 r/w 143(3) of the Income-tax Act, 1961, and the demand notice issued for the assessment year 2009-10. The main argument presented was that the objections filed by the petitioner in response to the notice issued under Section 148 of the Act had not been addressed by the respondent-Authority before the reassessment order was passed. The petitioner contended that a speaking order disposing of the objections is mandatory, citing the Judgment of the Hon'ble Apex Court in the case of GKN Driveshafts (India) Ltd. v. Income tax Officer (2003) 259 ITR 19 (SC) and a previous order of the High Court in W.P.No.4679/2018.

The respondent's counsel did not dispute the argument raised by the petitioner. Referring to a previous judgment of the High Court in W.P.No.4679/2018, the court held that passing an assessment order without addressing the objections raised after the notice under Section 148 of the Act is impermissible. The court relied on the Division Bench Judgment in the case of M/s Deepak Extrusions Pvt. Ltd. v. The Deputy Commissioner of Income Tax and set aside the impugned assessment order and demand notice.

Consequently, the court ruled that the impugned assessment order and demand notice could not be upheld and were set aside. The writ petition filed by the petitioner was allowed, but the Assessing Officer was permitted to proceed with the matter in accordance with the law. The judgment concluded by stating that all rights and contentions of the parties were left open for further legal proceedings.