2018 (9) TMI 292 - HC - Income Tax

Validity of reopening of assessment - whether notices ought to have been issued u/s 153C and not under Section 148? - Held that - AO has passed the orders of assessment on the very same day, on which the said interim order was passed. It is stated that after passing the said order, the same was despatched on the very next day. When such being the position, the orders of assessment impugned in other two writ petitions cannot be sustained, since the same were not passed in consonance with the interim order passed on 28.12.2011. Since the assessment orders were passed on the very same day and communicated to the petitioner on the very next day, the petitioner was not in a position to file their reply/objections on merits also within the time granted by this Court. It is not in dispute that the said interim order granted by this Court has not been put to challenge by the respondents by way of an appeal. On the other hand, the said order is still in force. Therefore, this Court is of the view that the impugned orders of assessment have to be set aside and the matter be remitted back to the Assessing Officer to pass fresh order of assessment.

Summary

Issues:
1. Validity of notices under Section 148 of the Income Tax Act, 1961.
2. Legality of assessment orders for the Assessment Years 2007-08 and 2008-09.
3. Jurisdiction of the Authority to issue notices under Section 148.

Analysis:
1. Validity of Notices under Section 148:
The petitioner challenged the notices dated 01.03.2011 and 28.02.2011 under Section 148, contending that they should have been issued under Section 153C. The High Court admitted the writ petitions and granted an interim order extending the time for the petitioner to submit objections. However, the Assessing Officer passed the assessment orders on the same day. The Court held that the assessment orders were not passed in accordance with the interim order, which was still in force. As a result, the impugned notices were set aside, and the matter was remitted back to the Assessing Officer for fresh assessment after considering the petitioner's objections.

2. Legality of Assessment Orders:
The legality of the assessment orders for the Assessment Years 2007-08 and 2008-09 was questioned due to the timing of their issuance in relation to the interim order. The Court found that the Assessing Officer's actions in passing the assessment orders on the same day as the interim order, without waiting for the petitioner's objections, violated the principles of natural justice. The Court held that the assessment orders were not sustainable and set them aside, directing the Assessing Officer to redo the assessment after receiving objections from the petitioner.

3. Jurisdiction of the Authority:
The dispute centered on the jurisdiction of the Authority to issue notices under Section 148 instead of Section 153C. The petitioner argued that the notices should have been issued under a different section. The Court emphasized the importance of following the interim order, which extended the time for the petitioner to file objections. The Court held that any orders passed in violation of the interim order were invalid. Consequently, the Court directed the Assessing Officer to reconsider the assessment after taking into account the objections raised by the petitioner.

In conclusion, the High Court set aside the impugned notices and assessment orders, emphasizing the importance of adhering to the principles of natural justice and the directives of the interim order. The matter was remitted back to the Assessing Officer for fresh assessment in compliance with the Court's directions.