9911796707
TMI Blog2017 (4) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 143(3) of Income Tax Act, 1961, for the assessment year 2012-13. 2. The case of the petitioner in short is as follows: The petitioner is a real estate Company involved in the development of properties. They filed their return for the assessment year 2012-13 on 30.09.2012, admitting a nil total income. The petitioner's case was selected for scrutiny and notice dated 03.12.2014 was issued under Section 143(2) of the Income Tax Act, 1961. On 29.12.2014, the petitioner, through their authorised representative, submitted certain documents pertaining to the issue. After detailed scrutiny of the documents and hearing the petitioner's representative on various dates, the respondent passed an order of assessment on 23.03.2015, by accepting the petitioner's return. While so, the respondent issued a notice dated 16.10.2015 under Section 148 of the said Act seeking to reopen the assessment under Section 147 of the said Act, simply by stating that the respondent has reasons to believe that the petitioner's income escaped assessment. By letter dated 20.11.2015, the petitioner requested for furnishing the informations pertaining to the reasons for reopening the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot extend the time period by giving an opportunity to the respondent to further reassess the income of the petitioner. The period of limitation statutorily prescribed cannot be extended by an order of the Court. 5. Learned counsel for the petitioner submitted as follows: (a) Once the respondent has chosen to reopen the assessment under Section 147 by issuing a notice under section 148, he is duty bound to pass a speaking order on the objections raised by the petitioner which is admittedly received by the respondent, well before passing the impugned order of assessment. Without passing a speaking order on the objections raised against reopening of the assessment, the respondent cannot pass the final order of assessment. In support of the above contention, the decision of the Apex Court reported in 2003(1) SCC 72 (GKN Driveshafts (India) Ltd. vs. Income Tax Officer and Ors) is relied on. (b) The Joint Venture Agreement dated 12.03.2012 was very much available with the respondent even at the time of the original scrutiny of the returns and therefore, the respondent is not having jurisdiction to reopen the assessment in the absence of any tangible material which has come t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escaped assessment, within the meaning of Section 147 of the said Act. On receipt of such notice, the petitioner, through their reply dated 20.11.2015, sought the details of reasons for reopening the assessment. In response to such request, the respondent sent a communication on 05.02.2016 indicating the reason for reopening the assessment as extracted hereunder: It has been observed that the assessee has claimed erroneous reduction in the value of inventory being flats under construction as per joint venture development, which will be completed only on receipt of share of flats apart from cash by the assessee-company as agreed in the Joint Venture document which has not taken place during the year. Hence the claim of reduction to the tune of ₹ 1,63,58,148/- is found not to be in order and thus the income to the extent is considered as having escaped assessment. 9. The petitioner, on receipt of such communication, sent a detailed objection on 26.03.2016 running to several pages. It is specifically stated therein that the assessment itself was completed under section 143(3) read with Section 147 and that the entire books of accounts, bank statements, re-conciliation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner. Therefore, he submitted that the matter may be remitted back to the Assessing Officer for passing a speaking order and thereafter, to pass the assessment order. In support of such contention, he relied on the decision of the Bombay High Court reported in (2006)287 ITR 1(Bombay) (Allana Cold Storage Ltd. vs. Income-tax Officer). In the above decision, the Division Bench of the Bombay High Court, after following the GKN Driveshafts (India) Ltd. case, set aside the order of assessment and remitted the matter back to the Assessing Officer for passing a speaking order on the objections. At paragraph Nos.7, 8, and 9, it has been observed as follows: 7. We have noted the submissions of both counsel. The law as laid down by the apex court is binding on this court as well as on the authorities functioning under the statute. This being the position, we fail to understand as to why the first respondent did not decide the objections separately which he is duty bound to decide. The whole idea in laying down the law in the abovereferred judgment of the apex court is to give an opportunity to the assessee to know as to what is the decision on his objections, which decision has also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not raised any serious objections and on the other hand, they admit to such position. However, they want the matter to be remitted back for passing such a speaking order. However, the petitioner is opposing to such course of action by contending that it would amount to extension of the period of limitation prescribed for passing the order of assessment. Therefore, this Court has to now consider as to whether remitting the matter back to the respondent for passing a speaking order on the objections raised against the reopening of the assessment and thereafter, to pass a fresh order of assessment, would amount to extension of period of limitation. 14. In my considered view, the question of extension of period of limitation, as contended by the petitioner, does not arise at all in this case. Admittedly, the order of assessment impugned in this writ petition was already passed within the prescribed period of limitation. If the Assessing Officer has passed the order of assessment within the prescribed period of limitation and thereafter, if such order is put to challenge before the Court of law and consequently, is set aside on some reason, which in the opinion of the Court is a cura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses to set aside, it is open to such Forum to remit the matter back to the Original Authority for redoing the exercise once again. At that point of time, certainly, the question of considering the limitation does not arise, as such forum is not granting time to pass the original order itself beyond the period of limitation and on the other hand, it is an order empowering the original authority to redo their exercise. Certainly, there is a vast difference between the stage and circumstances of the exercise of power to do and redo . When the power to do is certainly to be exercised within the statutory period of limitation, the power to redo such exercise does not fall under the purview of limitation once again. Hence, I reject the contention of the petitioner on this aspect. 16. In all the three cases relied on by the learned Standing Counsel for the respondent, the respective Division Bench of the Bombay High Court has only remitted the matter back to the Assessing Officer to pass a speaking order. 17. No doubt, the learned counsel relied on another Division Bench decision of the Bombay High Court reported in (2016)382 ITR 333 (Bayer Material Science (P.) Ltd. vs. Deputy Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the said decision would show that the Apex Court did not think fit to remand the matter to the appropriate authority as there was breach of the principles of natural justice and by that time, the statutory limit within which the appropriate authority has to act also got lapsed. In this case, there is no violation of principles of natural justice. On the other hand, the petitioner was put on notice and his objections were received. The only fault on the side of the respondent is that he has not passed a speaking order on those objections. Moreover, the respondent has admittedly passed the order of assessment within the period of limitation. Going by these facts, I do not think that the above decision of the Apex Court helps the petitioner in any manner. 20. Considering all these aspects, I am of the view that the matter has to go back to the respondent for passing a speaking order on the objections and thereafter, to pass the final order of assessment. Accordingly, the writ petition is allowed and the impugned order of assessment is set aside and the matter is remitted back to the respondent to pass a speaking order on the objections raised by the petitioner, after giving a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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