2022 (3) TMI 1296 - SC - Income Tax

Validity of Reopening of assessment u/s 147 - HC dismissed the writ petition giving reasons for the disinclination to entertain the writ petitions - HELD THAT - From the writ petitions produced on record, it appears that the reopening of the assessment under Section 148 of the Income Tax Act has been challenged on a number of grounds. None of the grounds raised in the writ petitions has been dealt with and/or considered by the High Court on merits. There is no discussion at all on any of the grounds raised in the writ petitions. The Division Bench of the High Court has dismissed the writ petitions in a most casual manner which is unsustainable. Except stating that we are not inclined to entertain writ petition , nothing further has been stated by the High Court giving reasons for the disinclination to entertain the writ petitions. The manner in which the High Court has dealt with and disposed of the writ petitions without passing any reasoned order is not appreciated by this Court. When a number of issues/grounds were raised in the writ petitions, it was the duty cast upon the court to deal with the same and thereafter, to pass a reasoned order. When the Constitution confers on the High Courts the power to give relief it becomes the duty of the Courts to give such relief in appropriate cases and the Courts would be failing to perform their duty if relief is refused without adequate reasons. While emphasising the necessity to pass a reasoned order, in the case of Central Board of Trustees Vs. Indore Composite Private Limited, 2018 (7) TMI 2206 - SUPREME COURT observed and held by this Court that the courts need to pass a reasoned order in every case which must contain the narration of the bare facts of the case of the parties to the lis, the issues arising in the case, the submissions urged by the parties, the legal principles applicable to the issues involved and the reasons in support of the findings on all the issues arising in the case and urged by the learned counsel for the parties in support of its conclusion. Since we cannot countenance the manner in which the orders have been passed by the High Court which has compelled us to remand the matter to the High Court for deciding the writ petitions afresh on merits, we do so in light of the aforesaid observations. We allow the present appeals and set aside the impugned orders passed by the High Court and remand the matters to the Division Bench of the High Court for deciding the writ petitions afresh in accordance with law, keeping in view our observations made supra

Summary

Issues:
Challenging reopening of assessment/reassessment proceedings; High Court's dismissal of writ petitions without reasoned order.

Analysis:
The Supreme Court heard the appeals against the High Court's dismissal of writ petitions challenging the reopening of assessment/reassessment proceedings. The High Court's orders were found to be cryptic, nonspeaking, and nonreasoned. The Court noted that the High Court failed to address the grounds raised in the writ petitions and dismissed them casually. The Supreme Court emphasized that High Courts have a duty to pass reasoned orders when giving relief. It was observed that the High Court should have independently considered the reopening of assessment in the writ petitions and provided justification. Referring to previous judgments, the Court highlighted the importance of reasoned orders in upholding justice and legitimacy in the judicial process.

The Supreme Court found the High Court's handling of the writ petitions unacceptable and decided to remand the matters for a fresh decision based on merits. The Court emphasized that the High Court should have examined the diverse grounds raised by the parties and recorded clear findings after analyzing relevant documents. Therefore, the Supreme Court allowed the appeals, set aside the High Court's orders, and remanded the matters for fresh consideration by the High Court, instructing them to decide the writ petitions in accordance with law and the observations made by the Supreme Court. No costs were awarded in the matter.