2021 (8) TMI 1048 - HC - Income Tax

Validity of reopening of assessment - denial of natural justice - no opportunity to the petitioner to place all these materials and information provided - HELD THAT - The petitioner assessee could able to establish that the materials which all are now relied upon were the materials already adjudicated and proceedings were dropped, this Court thought fit to provide an opportunity to the petitioner to place all these materials and informations to the Assessing Officer, by way of an additional objections and the said additional objections are to be considered by the Assessing Officer with reference to the documents and evidences and pass an additional order, disposing of the additional objections to be filed by the writ petitioner and thereafter, the Assessing Authority shall proceed further. The opportunity is granted in view of the fact that the materials produced by the petitioner seems to be impressive. This Court is further conscious about the fact that the opportunity, as contemplated pursuant to the directions of the Hon'ble Apex Court of India in GKN Drive shafts India Ltd. 2002 (11) TMI 7 - SUPREME COURT has already been given. However, in the present case, there was an omission on the part of the assessee to include certain vital materials in the objections and in the interest of justice, such an additional opportunity is given to the petitioner to submit additional objections and further, considering the peculiar facts and circumstances. Petitioner is at liberty to submit their additional objections, as well as documents, materials, statements, etc., within a period of two weeks from the date of receipt of a copy of this order

Summary

Issues:
Reopening of assessment under Section 147/148 of the Income Tax Act, 1961; Lack of jurisdiction; Consideration of objections and materials by Assessing Authority; Opportunity for petitioner to submit additional objections.

Analysis:
The Writ Petitions challenge the reopening of assessment under Section 147/148 of the Income Tax Act, 1961. The petitioner argues lack of jurisdiction, pointing out that the reason for reopening is based on the assessment order for a different assessment year. It is contended that despite submitting all necessary information and records in response to notices under Section 142(1) for the relevant assessment years, the Assessing Authority did not consider these materials while passing the assessment orders. The petitioner highlights a similar situation with the Assessment Year 2007-08, where objections were accepted, and reopening proceedings were dropped. However, the same materials were used for the current reopening, without considering the earlier decision.

The respondents argue that the documents and objections related to the dropped reopening proceedings for the Assessment Year 2007-08 were not presented to the Assessing Officer during the objections submitted by the petitioner. They assert that the new materials cannot be used by the petitioner to seek relief under Article 226 of the Constitution. The respondents claim they were not given an opportunity to address the new documents or arguments raised in the Writ Petitions, leading to a request for rejection of the Writ Petitions.

The Court opines that the Assessing Authority cannot be expected to address grounds not raised in the objections by the assessee. While the petitioner now presents numerous materials to show that the earlier dropped proceedings were not considered in the current order, the Court emphasizes the need for the revenue to have an opportunity to review these documents. Recognizing the impressive nature of the materials produced by the petitioner, the Court grants an opportunity to submit additional objections. This decision is made in the interest of justice, acknowledging the omission of vital materials in the initial objections. The Court clarifies that this additional opportunity is specific to this case and should not set a precedent for future cases.

In conclusion, the Court allows the petitioner to submit additional objections and relevant documents within two weeks. The Assessing Authority is directed to consider these submissions, provide an opportunity for a personal hearing if requested, and pass an additional order within eight weeks. The Writ Petitions are disposed of with these directions, without costs, and connected Miscellaneous Petitions are closed.