2020 (2) TMI 1097 - HC - Income Tax

Reopening of assessment u/s 147 - objections against the reopening notice served - HELD THAT - The petitioner has filed a return of income for the first time on 27.06.2019 in respect of assessment year 2012-13 after receipt of notice u/s 148. Immediately on receipt of the notice under Section 148, objections appeared to have been filed without seeking reasons. Reasons for re-assessment have been sought only on 16.12.2019 and furnished on the same date. Thus, in line with the procedure set out by the Supreme Court in GKN DRIVESHAFTS (INDIA) LTD. 2002 (11) TMI 7 - SUPREME COURT , the petitioner is permitted to file his objections to the assumption of jurisdiction within a period of two weeks from today. A separate order on the objection will be passed by the respondent and duly communicated to the petitioner and thereafter, the matter taken up on merits, if at all. After hearing the petitioner, an order of re-assessment shall be passed by the respondent in accordance with law.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 and show cause notice, reasons for re-assessment, procedure for reassessment, filing objections, assessment for the abovesaid five assessment years, filing return of income, seeking reasons for issuing notices, passing a speaking order, assumption of jurisdiction, hearing the petitioner, order of re-assessment.

The High Court considered a writ petition challenging a notice under Section 148 of the Income Tax Act, 1961, a show cause notice, and reasons for re-assessment. Referring to the Supreme Court case of GKN Driveshafts (India) Ltd. vs. Income Tax Officer and Others, the Court emphasized the procedure for reassessment. The Court clarified that upon receiving a notice under Section 148, the noticee should file a return and may seek reasons for the notice. The assessing officer must provide reasons within a reasonable time, and the noticee can then file objections, which should be disposed of by a speaking order. As the reasons were disclosed in the proceedings, the assessing officer was directed to dispose of any objections before proceeding with assessment for the five assessment years in question.

The petitioner had filed a return of income for the first time after receiving the notice under Section 148, without seeking reasons initially. The reasons for re-assessment were sought and furnished later. In line with the Supreme Court's procedure, the petitioner was allowed to file objections to the assumption of jurisdiction within two weeks. The respondent was directed to pass a separate order on the objections, communicate it to the petitioner, and then proceed with the assessment on merits. The Court ordered that after hearing the petitioner, a re-assessment order should be passed by the respondent in accordance with the law.

Consequently, the writ petition was disposed of in the mentioned terms, and connected miscellaneous petitions were closed without any order as to costs.