9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (4) TMI 953 - HC - Income TaxReopening of assessment u/s 147 - Non furnishing the reasons for reopening to the assessee - Petitioner was informed that a return of income tax ought to be filed first whereafter only the reasons for reopening would be furnished - HELD THAT - As per the ratio of the judgment of the Apex Court in GKN Driveshafts (India) Ltd. 2002 (11) TMI 7 - SUPREME COURT after the issuance of notice under Section 148 of the Act, the noticee is required to file a return if he so desires and to seek reasons for issuing the notice under Section 148 of the Act. The A.O. is then bound to furnish the reasons within a reasonable period of time to which the noticee is entitled to file objections. There have been a plethora of judgments reiterating the importance of furnishing the reasons for reopening to the assessee so that the assessees in appropriate cases bring to the notice of the A.O. facts which could persuade the A.O. to drop the reassessment proceedings on the ground that the reopening was not warranted based upon issues of facts or of law of which the A.O. was either ignorant of or had entertained misconceptions regarding the same. It can be seen from the facts narrated hereinabove that after receipt of notice under Section 148 of the Act, by the Petitioner, there was some delay in filing the return. Petitioner had consistently requested the A.O. to furnish the reasons for reopening, which admittedly were never provided to the Petitioner. In the present case therefore failure on the part of the A.O. to furnish reasons recorded for purposes of reopening the assessment does make the order of assessment unsustainable in law. We allow the present petition. The order of assessment and notice of demand as also the notice under Section 148 are set aside.
Issues involved:
The issues involved in the judgment are the failure to furnish reasons for reopening and the unreasonably short period provided for filing objections to the draft assessment order. Reasons for Reopening: The Assessing Officer issued a notice under Section 148 of the Income Tax Act, seeking to reopen the assessment for the year 2014-15 as income chargeable to tax had allegedly escaped assessment. The petitioner requested a copy of the reasons recorded but was informed that a return of income tax must be filed first. The petitioner faced difficulties in filing the return due to health reasons and technical glitches on the portal. Despite repeated requests, the reasons for reopening were not provided by the respondents. Legal Principles - Furnishing Reasons: The judgment refers to the Apex Court's ruling in GKN Driveshafts (India) Ltd. v. Income-tax Officer, emphasizing that after receiving a notice under Section 148, the assessee is entitled to seek reasons for reopening and the Assessing Officer must furnish the reasons within a reasonable time. The failure to provide reasons hinders the assessee's ability to challenge the reassessment proceedings effectively. Judicial Precedents - Importance of Reasons: Various judgments stress the significance of providing reasons for reopening assessments to enable the assessee to present facts that may lead to dropping the reassessment proceedings if the reopening is unwarranted. The requirement for a speaking order, as per legal precedent, aims to prevent casual initiation of reassessment proceedings and ensure erroneous ones are dropped promptly. Unreasonable Time Period for Objections: The petitioner was given a short period to file objections to the draft assessment order, which was deemed insufficient considering the circumstances. The court found the time granted by the Assessing Officer inadequate for the petitioner to respond effectively. Decision and Remand: The court allowed the petition, setting aside the order of assessment, notice of demand, and the notice for reopening. The matter was remanded to the concerned officer under the Faceless Assessment Scheme with directions to provide the petitioner with the reasons recorded for reopening. The proceedings were to be completed within three months from the date of the judgment. The writ petition was disposed of accordingly.
|
