2022 (6) TMI 29 - HC - Income Tax

Reopening of assessment u/s 147 - Rejection of objections pursuant to the 148 notice - HELD THAT - Assessment orders were passed under Section 147 of the Act, prior to which, 148 notice was issued and the objections were raised, which were rejected through the impugned order. Challenging the assessment orders writ petitions were filed and the same were allowed by a separate order passed by this Court today, where, after setting aside those assessment orders, matters were remitted back to the Assessing Authority with a direction to issue fresh show cause notice by giving not less than one week time to the petitioner assessee to respond. Therefore, the said directions issued by this Court shall be scrupulously followed and executed punctually by the respondent Assessing Authority. Therefore, at this juncture, the present challenge made against the 148 notice or the rejection order with regard to the objections raised by the petitioner for the proposed opening of assessment under Section 147 may not stand in the way. If any additional reasons have been given by the Assessing Authority, the same can also be objected to, for which, reply can be given with supporting documents and inputs by the petitioner assessee along with the reply to be given to the show cause notice which is going to be issued by the respondent Assessing Authority pursuant to the orders passed in the other writ petitions referred to above. After considering all these reply or inputs to be supplied by the petitioner, the Assessing Authority can go ahead with the assessment process and complete the same by passing an order of assessment, if need arises. Therefore, the present challenge made against these orders in these writ petitions may not hold good for the purpose of legal scrutiny and decision

Summary

Issues:
Reopening of assessment under Section 147 of the Income Tax Act for Assessment Years 2014-15 and 2016-17; Objections raised by the petitioner assessee against the reasons for reopening; Rejection of objections by the Revenue; Issuance of notice under Section 144A read with Section 142(1); Passing of assessment orders before the petitioner could reply due to website closure; Setting aside of assessment orders and remittance back to the Revenue for reconsideration; Challenge to the validity of the reasons for reopening under Section 147; Effect of earlier writ petitions on the present challenge against rejection of objections; Compliance with directions issued by the Court for issuing a fresh show cause notice.

Analysis:
The High Court dealt with writ petitions concerning the reopening of assessments under Section 147 of the Income Tax Act for the years 2014-15 and 2016-17. Initially, the Revenue issued a notice under Section 148, followed by the filing of objections by the petitioner assessee upon receiving reasons for the reopening. Subsequently, the Revenue rejected the objections leading to the filing of the present Writ Petitions challenging these proceedings.

During the proceedings, a notice under Section 144A read with Section 142(1) was issued, setting a deadline for the petitioner to reply. However, due to the closure of the website, the petitioner could not respond before the Assessing Authority passed the assessment orders prematurely, which were later challenged and found to be flawed, resulting in the orders being set aside. The matters were then remitted back to the Revenue for reconsideration with specific directions to be followed.

The Court emphasized the importance of adhering to its directions, including issuing a fresh show cause notice with adequate time for response. The Court noted that any additional reasons provided by the Assessing Authority could be objected to by the petitioner along with supporting documents. The Assessing Authority was instructed to consider all responses and inputs from the petitioner before proceeding with the assessment process.

Ultimately, the Court concluded that the challenges raised in the writ petitions against the orders related to the reopening of assessments may not be valid in light of the directions issued by the Court for reconsideration. Therefore, the Court dismissed the writ petitions with observations and directed the Assessing Authority to proceed with the assessment process in accordance with the Court's directions.