2016 (11) TMI 968 - HC - Income Tax

Validity of reopening of assessment - period of limitation - Held that - Considering objection filed by the petitioner vide annexure P-5, particularly objection with regard to limitation has not been decided by the Assessing Officer by a speaking order we dispose of this writ petition with the following direction The Assessing Officer shall first take up for consideration the objections raised by the petitioner both vide annexure P-3 and P-5, including the objection filed with regard to period of limitation in proceeding under Section 148, decide them by a speaking order and then only shall proceed in the matter of assessment, if permissible, under law based on decision taken on the representation.

Summary

Issues: Challenging show-cause notice under Section 148 of the Income Tax Act issued beyond the prescribed period.

In this case, the petitioner challenged a show-cause notice, Annexure P-1, issued under Section 148 of the Income Tax Act, 1961, on the grounds that it was issued beyond the prescribed period. The petitioner argued that the notice, issued on 2.6.2015, should have been issued on or before 31.03.2013. The petitioner sought quashment of the proceedings under Section 148 through a writ petition.

The petitioner's counsel referred to the notice, objections submitted by the petitioner, and the order passed by the Assessment Officer. The counsel highlighted that the assessment proceedings did not address the objections raised by the petitioner, including the objection related to the delay in issuing the notice. Citing the judgment of the Supreme Court in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & Ors. (2003) 179 CTR 0011, the petitioner argued that the notice, being beyond the limitation period, should be quashed.

On the other hand, the respondent's counsel pointed out that the objections raised by the petitioner, especially those in annexure P-5, had not been decided yet. Referring to the Supreme Court's observations in a similar case, the respondent argued against interference by the court at that stage.

After hearing both parties, the court noted that while the petitioner had raised objections through various annexures, including P-5, none of these objections had been addressed by the Assessing Officer. Citing the Supreme Court's guidance on the proper course of action for the noticee upon receiving a notice under Section 148, the court directed the Assessing Officer to consider and decide all objections raised by the petitioner, including those related to the limitation period, before proceeding with the assessment.

The court disposed of the writ petition with the direction that the Assessing Officer must first address the objections raised by the petitioner, provide a speaking order on them, and then proceed with the assessment based on the decision taken on the objections. The petitioner was granted the liberty to challenge the Assessing Officer's order if aggrieved, in accordance with the law.