2021 (4) TMI 958 - HC - Income Tax

Reopening of assessment u/s 147 - Non speaking order dated 29.01.2016 had been communicated pursuant to which the impugned assessment has been passed .- HELD THAT - A perusal of the communication dated 29.01.2016 the relevant portion shows this is a non speaking order and merely conveys the decision over ruling the objection of the petitioner. The exercise carried out by the respondent was contrary to the decision of the Hon'ble Supreme Court in G.K.N Drive Shafts India Ltd. Vs Income Tax Officer , 2002 (11) TMI 7 - SUPREME COURT Therefore the impugned assessment order passed by the respondent is liable to be quashed. Under these circumstances, the impugned assessment order dated 30.03.2016 is quashed by directing the respondent to pass a speaking order in terms of the decision of the supreme Court in G.K.N Drive Shafts India Ltd. Vs Income Tax Officer within a period of three months from the date of receipt of a copy of this order. Thereafter, the assessment proceedings can be completed in accordance with law.

Summary

Issues:
Challenge to impugned assessment order under section 148 of the Income Tax Act, 1961 based on reopening of assessment notice dated 31.03.2015. Sustainability of impugned assessment order dated 30.03.2016 after petitioner's representation against reopening. Validity of communication dated 29.01.2016 rejecting objections to reopening based on lack of evidence. Compliance with the decision of the Hon'ble Supreme Court in G.K.N Drive Shafts India Ltd. Vs Income Tax Officer, 259 ITR 19 (SC) regarding passing a speaking order.

Analysis:

The petitioner challenged the assessment order dated 30.03.2016 passed by the 1st respondent following the reopening of the assessment notice dated 31.03.2015 under section 148 of the Income Tax Act, 1961. The respondent provided reasons for the reopening in a communication dated 26.08.2015, citing an amount paid to M/s.Kalaignar Television Limited during the year 2007-08. The petitioner submitted a representation against the reopening on 03.09.2015, but the assessment order was still passed on 30.03.2016, leading to the challenge of the proceedings' sustainability.

The respondent defended the impugned order, stating that the petitioner's representation was considered before passing the assessment order on 29.01.2016. The respondent contended that the assessment order was sustainable and sought the dismissal of the writ petition. However, during the hearing, it was revealed that the communication dated 29.01.2016 rejecting the objections to reopening was not compliant with the decision of the Hon'ble Supreme Court in G.K.N Drive Shafts India Ltd. Vs Income Tax Officer, 259 ITR 19 (SC) as it was deemed a non-speaking order.

The Court found that the communication dated 29.01.2016 was not a speaking order and did not align with the Supreme Court's decision, thus rendering the impugned assessment order liable to be quashed. Consequently, the Court directed the respondent to pass a speaking order within three months in accordance with the Supreme Court's decision. The writ petition was allowed, with no costs imposed, and the connected Miscellaneous Petition was closed.