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2010 (4) TMI 56 - HC - Income TaxAssessment under section 147/148 reopen the case The assessee sought reasons for reopening. The same were supplied and the assessee preferred objections thereto in both cases. The assessee, thereafter, awaited the passing of the speaking orders in terms of the decision of the Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO 2008 -TMI - 6100 - SUPREME Court . However, the same was not forthcoming and the Assessing Officer proceeded with the assessment proceedings and framed the assessment orders in both cases on 31.12.2009 held that - no speaking orders have been passed and the objections have only been taken care of in the assessment orders. Consequently, the only course left to us is to direct that the assessment orders be set-aside and that the Assessing Officer be directed to consider the objections filed by the assessee in both cases and pass separate speaking orders dealing with the said objections. Thereafter, he may proceed with the framing of the assessments. It is ordered accordingly. In this case Delhi High Court-held that the assessment orders be set-aside and that the Assessing Officer be directed to consider the objections filed by the assessee in both cases and pass separate speaking orders dealing with the said objections. Thereafter, he may proceed with the framing of the assessments. It is ordered accordingly. The assessee will not raise the question of limitation. The writ petitions and pending applications stand disposed of.
Issues:
1. Whether the Assessing Officer followed the proper procedure before framing assessment orders under Sections 147/148 of the Income Tax Act, 1961? 2. Whether the Assessing Officer passed a speaking order prior to proceeding with the assessment proceedings? 3. Whether the assessment orders should be set-aside due to the failure to pass speaking orders as per the decision of the Supreme Court in GKN Driveshafts case? Analysis: 1. The writ petitions involved identical issues concerning assessments for the years 2002-03 and 2004-05 under Section 143(3) of the Income Tax Act, 1961. The Revenue later sought to reopen the assessments under Sections 147/148 through separate notices dated 30.03.2009. The assessee requested reasons for reopening, objected to the same, and awaited speaking orders as per the Supreme Court decision in GKN Driveshafts case. However, the Assessing Officer proceeded with framing the assessment orders on 31.12.2009 without passing speaking orders. 2. The petitioner contended that the Assessing Officer did not adhere to the procedure mandated by the Supreme Court in GKN Driveshafts case by not passing a speaking order before framing the assessment. Citing a previous decision, the petitioner argued for the necessity of passing speaking orders. The Court acknowledged the legal position established by the Supreme Court, emphasizing the requirement for passing speaking orders before proceeding with assessments. In this case, as no speaking orders were passed and objections were only addressed in the assessment orders, the Court directed the assessment orders to be set-aside. The Assessing Officer was instructed to consider the objections raised by the assessee and pass separate speaking orders before proceeding with the assessments. 3. The Court's decision was based on the clear legal principle outlined by the Supreme Court in GKN Driveshafts case, emphasizing the importance of passing speaking orders before finalizing assessments. By setting aside the assessment orders and instructing the Assessing Officer to address the objections through speaking orders, the Court ensured compliance with the procedural requirements. The Court also directed that the assessee should not raise the issue of limitation. Consequently, the writ petitions and pending applications were disposed of in accordance with the Court's directions. This detailed analysis of the judgment highlights the procedural lapses in the assessment process and the Court's intervention to ensure compliance with legal requirements based on established legal principles.
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