2019 (8) TMI 23 - HC - Income Tax

Reassessment of notices issued u/s 147/148 - non disposal of objections - non following procedure laid down in GKN Driveshafts (India) Ltd. v. ITO 2002 (11) TMI 7 - SUPREME COURT - HELD THAT - In the present case, the AO has not chosen to dispose of the objections, filed by the Petitioner against the reopening of the assessment but has proceeded to the stage of passing the reassessment order itself. In almost an identical fact situation in Smt. Kamlesh Sharma v. B.L. Meena, Income-Tax Officer . 2006 (8) TMI 140 - DELHI HIGH COURT where the AO did not pass any speaking order but straightaway passed an assessment order, and simultaneously rejected the contention of the Petitioner. This Court has, therefore, no hesitation in setting aside reassessment order dated 29th December, 2018 for the Assessment Year AY 2011-12. Consequently, a direction is issued to the AO to once again take up for consideration, the Petitioner s objections to the reopening of the assessment for the aforementioned AY and dispose of those objections by a reasoned order not later than four weeks from today.

Summary

Issues Involved:
1. Proceeding with reassessment without considering objections filed by the Assessee.
2. Compliance with the procedure outlined by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO (2003) 259 ITR 19 (SC).
3. Setting aside reassessment order and directing the Assessing Officer to reconsider objections.

Analysis:

1. The primary issue in the present case revolves around the Assessing Officer's decision to finalize the reassessment without addressing the objections raised by the Assessee. The petitioner contended that the reassessment for the year 2011-2012 had been initiated without due consideration of their objections. The court emphasized the importance of a reasoned order on the objections before proceeding with reassessment, citing various judgments to support the Assessee's right to have objections duly considered.

2. The court highlighted the significance of complying with the procedure established by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO, emphasizing that the Assessee's objections must be reviewed and a reasoned order passed before finalizing the reassessment. Referring to previous decisions, the court reiterated that the process of considering objections is not a mere formality but a quasi-judicial function that must be conducted diligently by the Assessing Officer.

3. In line with previous rulings, the court set aside the reassessment order for the Assessment Year 2011-2012 and directed the Assessing Officer to reevaluate the Assessee's objections within a specified timeframe. The court mandated that a reasoned order addressing the objections must be issued within four weeks, with communication to the Assessee within one week thereafter. The court also granted the Assessee the right to pursue further remedies if their objections are dismissed by the Assessing Officer, ensuring a fair and transparent reassessment process.

In conclusion, the judgment underscores the importance of due process in reassessment proceedings, emphasizing the Assessee's right to have objections considered before finalizing any reassessment order. The court's decision to set aside the reassessment and direct a reevaluation of objections reflects a commitment to upholding procedural fairness and adherence to established legal principles in tax matters.