2021 (7) TMI 839 - HC - Income Tax

Reopening of assessment u/s 147 - non disposing of the objections filed by the writ petitioner on the reasons furnished for re-opening the assessment under Section 147/148 - HELD THAT - If at all the petitioner is entitled to get a copy of the sanctioning order passed by the Commissioner, the same is to be furnished enabling the assessee to defend his case in the manner known to law. As far as the objections raised by the petitioner vide letter dated 26.06.2018 is concerned, the order disposing of the objections dated 28.11.2018 has not spelt out any fact relating to the objections or findings to the said objections raised by the petitioner. Thus, this Court is of the opinion that the disposal of the objections must be meaningful and findings are to be given by the Assessing Officer to proceed with the matter by following the provisions of the Income Tax Act. It is repeatedly held that the directives in GKN Driveshafts India Ltd. 2002 (11) TMI 7 - SUPREME COURT regarding disposal of the objections means that the objections raised both factually and legally must be considered with reference to the provisions of the Act and the principles and a finding is to be given enabling the assessee to defend the case properly. In the present case, the order disposing of the objections, reveals that the said objections raised by the petitioner have not been considered. Thus, the matter is to be remanded back for fresh consideration of the objections filed by the writ petitioner on 26.06.2018.

Summary

Issues:
Challenging the order for re-opening assessment based on directives from the Hon'ble Apex Court of India in GKN Driveshafts India Ltd. case, non-consideration of objections raised by the petitioner, failure to furnish the sanctioning order by the Commissioner, and the need for meaningful disposal of objections.

Analysis:
The writ petition challenges the order passed by the respondent regarding the objections filed by the petitioner for re-opening the assessment. The petitioner, a private limited company, contends that the respondent did not follow the directives from the Hon'ble Apex Court of India in the GKN Driveshafts India Ltd. case while disposing of the objections. The petitioner raised specific objections on 26.06.2018, emphasizing that the reasons for re-opening the assessment under Section 147/148 of the Act should be based on new/tangible material on record. However, the competent Assessing Officer failed to address these objections in the order, leading to the petitioner's dissatisfaction.

The petitioner also highlighted that the order of the Commissioner granting sanction was not provided, preventing the petitioner from raising additional grounds. The court acknowledged the importance of the petitioner having access to the sanctioning order to defend their case properly. It was noted that the order disposing of the objections on 28.11.2018 did not address the objections raised by the petitioner adequately, indicating a lack of meaningful consideration by the Assessing Officer.

The court emphasized that the disposal of objections must be meaningful, with findings given by the Assessing Officer in accordance with the provisions of the Income Tax Act. Referring to the GKN Driveshafts India Ltd. case, it was reiterated that objections, both factual and legal, should be considered with reference to the Act's provisions and principles, enabling the assessee to defend their case effectively. As the objections raised by the petitioner were not properly considered in the order dated 28.11.2018, the court decided to remand the matter back for fresh consideration of the objections.

Consequently, the impugned order was set aside, and the matter was remanded to the respondent for a thorough reevaluation of the objections raised by the petitioner on 26.06.2018. The court directed the respondent to pass a speaking order, considering all objections promptly. The writ petition was allowed with no costs incurred by either party.