2024 (12) TMI 1268 - HC - Income Tax

Validity of reopening of assessment - non addressing fresh objections raised by the Petitioner - HELD THAT - Fresh objections as raised by the Petitioner have not been dealt / disposed of despite a specific order to that effect passed by this court, much less in the manner according to law. In fact the impugned order in our opinion shows gross non application of mind to the detailed case which was put up by the petitioner before the Assessing Officer. It was a legal obligation of the respondents to dispose of the objections, in accordance with law and more particularly when there was a mandate of the orders passed by this court which was staring at the respondents, namely, the order passed on the earlier writ petition filed by the petitioner. Without taking a serious view which this matter certainly deserved, we are of the opinion that the concerned officers would be better advised and a wiser sense prevails on these officers of the Assessment Unit so as to pass an appropriate order in accordance with law, by one more opportunity being granted to them.

Summary

Issues:
1. Validity of reasons for reopening post issuance of notice under Section 148 of the Income Tax Act 1961.
2. Adequacy of addressing fresh objections raised by the Petitioner in compliance with court directives.

Analysis:

Issue 1: Validity of reasons for reopening post issuance of notice under Section 148 of the Income Tax Act 1961

The High Court previously adjudicated on the completeness of reasons provided for reopening post issuance of notice under Section 148 of the Income Tax Act 1961. The Court found the reasons annexed to the approval under Section 151 of the Act to be incomplete, leading to the petitioner being deprived of an effective opportunity to respond adequately. Consequently, the court quashed and set aside the order disposing of the objection to the notice under Section 148. The Court issued directions for denovo consideration, requiring the petitioner to file detailed objections and providing access to documents relied upon. The Assessing Officer was mandated to pass a reasoned order after considering the objections and granting a personal hearing. The reassessment proceedings were to be completed within specified timelines, ensuring compliance with the law.

Issue 2: Adequacy of addressing fresh objections raised by the Petitioner in compliance with court directives

Following the court's order, the petitioner raised fresh objections against the reasons provided, specifically challenging the assertion of a NIL return when the actual figures differed significantly. The subsequent order disposing of these objections was challenged by the petitioner, alleging that their contentions were not adequately addressed. The Court, upon review, found serious defects in the impugned order, highlighting a lack of application of mind and non-compliance with the court's directives. Emphasizing the importance of addressing objections in accordance with the law, the Court quashed the impugned order and remanded the proceedings to the Assessing Officer. The Court directed the Assessing Officer to grant a hearing to the petitioner and pass an appropriate order strictly in accordance with the law and court observations within a specified timeline, ensuring the foundation for any reassessment order is legally sound.

In conclusion, the High Court emphasized the importance of complying with legal procedures and court directives in assessing income tax matters. The judgment underscores the necessity for thorough consideration of objections raised by taxpayers and the obligation of authorities to address them in accordance with the law.