2017 (9) TMI 742 - HC - Income Tax

Reopening of assessment - impugned order does not return any finding with regard to the objection raised by the petitioner - Held that - It is incumbent upon the authority to consider and decide the objection raised by the petitioner in respect of the reasons given for reopening the assessment under Section 147(2) read with Section 148 of the Income Tax Act, 1961. In the instant case, the impugned order not having dealt with the objections raised, the Assessing Officer ought not to have proceeded further and passed the order of assessment. An assessee is entitled to know the reasons for the invocation of Section 147 read with Section 148 of the Income Tax Act, 1961 and the fate of the objections raised with regard thereto. The fate of the objections in the present case has not been made known to the petitioner by a speaking order. In such circumstances, interest of justice would be sub-served by setting aside the impugned order dated July 31, 2017 and requesting the Assessing Officer to dispose of the objections raised by the petitioner on July 26, 2017 to the reasons for invoking the Section 147 read with Section 148 of the Income Tax Act, 1961 as expeditiously as possible and preferably within a period of two weeks from the date of communication of this order to him as prayed for on behalf of the Department.

Summary

Issues:
Challenging assessment order under Income Tax Act, 1961 for assessment year 2010-2011 due to lack of opportunity for hearing and consideration of objections.

Analysis:
The petitioner received a notice under Section 147 read with Section 148 of the Income Tax Act, 1961, proposing to reopen the assessment for the assessment year 2010-2011. The petitioner sought an adjournment for the hearing fixed on May 29, 2017, due to the transfer of the concerned officer. Despite filing objections on July 26, 2017, the impugned order dated July 31, 2017 did not address the objections raised. The Court held that the Assessing Officer should have considered and decided the objections before passing the assessment order. The petitioner was not afforded a reasonable opportunity of hearing, violating principles of natural justice. The impugned order was set aside, instructing the Assessing Officer to dispose of the objections expeditiously and communicate a reasoned order to the petitioner.

The Assessing Officer is directed to adhere to principles of natural justice while dealing with the objections and communicate the reasoned order promptly. The Assessing Officer is granted the liberty to proceed with the assessment under Sections 143(2) and 142(1) of the Income Tax Act, 1961, if the proceedings are not dropped. The rival contentions raised by the parties are left open to be decided before the appropriate forum. The writ petition is disposed of with no order as to costs.