2022 (2) TMI 120 - HC - Income Tax

Reopening of assessment u/s 147 - Whether there is no suppression on the part of the petitioner to justify reopening of the assessment ? - HELD THAT - It is the case where a notice for reopening of assessment was issued on 19.10.2011. The petitioner has replied to the same which culminated in Assessment Order dated 28.12.2011. The said order was passed in contravention of the directions of the Hon'ble Supreme Court inasmuch as no speaking order was passed in terms of the decision of the Hon'ble Supreme Court in G.K.N.Driveshafts case 2002 (11) TMI 7 - SUPREME COURT It was therefore set aside and the case was remitted back to pass a speaking order. The respondent has now passed the impugned order/communication over ruling the objection of the petitioner. By the impugned order, the respondent has merely concluded the reasons why the assessment has been reopened. The fact that the assessment has been reopened itself does not mean that the re-assessment has been completed. It is open for the petitioner to participate in the proceedings and make appropriate submissions before the respondent by convincing the respondent to the effect that there is no case made out for revising the assessment completed earlier.

Summary

Issues:
Challenge to impugned communication for reopening assessment for AY 2004-2005.

Analysis:
The petitioner contested a communication dated 29.10.2021 reopening the assessment for AY 2004-2005. This case involved a previous Assessment Order for the same year that was challenged in W.P.No.2520 of 2012 due to non-compliance with a Supreme Court direction. The Single Judge directed the respondent to pass a speaking order, leading to the impugned order. Similar proceedings for subsequent years were also initiated. The petitioner argued against the reopening, citing disallowed expenses and subsequent appeal outcomes. The reasons for reopening included non-deduction of TDS on payments to foreign companies. The petitioner asserted that the assessment could not be reopened due to adequate reasons and impermissible change of opinion. It was contended that there was no suppression to justify reopening under relevant sections of the Income Tax Act, 1961.

The petitioner's counsel argued against the reopening, emphasizing the earlier order and settled legal principles. The petitioner's response to the reopening notice resulted in an Assessment Order dated 28.12.2011, which was set aside for not being a speaking order as per Supreme Court directives. The respondent subsequently issued the impugned order, which only outlined the reasons for reopening without completing the reassessment. The petitioner was advised to participate in the proceedings and present arguments to convince the respondent against revising the earlier assessment. The petitioner was reminded of the option to appeal adverse decisions before the Commissioner of Income Tax (Appeals). Ultimately, the court found no merit in the writ petition and dismissed it without costs, closing connected Miscellaneous Petitions.