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TMI Blog2019 (9) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order was bad in law as being opposed to the principles of natural justice ? (b) Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in holding that chargeable expenditure had to be computed with reference to the unit of residential accommodation in the hotel and not with reference to the number of persons occupying the said unit of accommodation ? 3. The brief facts in which the aforesaid substantial questions of law fall for determination, are set out hereafter : (A) The Appellant filed a return under the provisions of the Expenditure Tax Act, 1987 (said Act), showing chargeable expenditure at rupees Nil on 12.8.1998. The Respondent, by notice dated 13.3.2003, by invoking the provisions in Section 11 of the said Act, sought to reopen the assessment. (B) On the reverse of the notice dated 13.3.2003, the following endorsement finds place : "Reasons for Reopening :- In view of the Himachal High Court decision in the case of H.P. Tourism Development Corporation (238 ITR 38), the expenditure has escaped assessment." (C) The Appellant, vide letter dated 14.4.2003, applied for furnish of reasons recorded fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not seriously disputed by Ms. Linhares, learned Standing Counsel for the Respondent. Even, otherwise, the first substantial question of law relates to assumption of jurisdiction by the Assessing Officer under Section 11 of the said Act. If this question is answered in favour of the Appellant-Assessee and against the Respondent-Revenue, then, it will have to be held that the assumption of jurisdiction by the Assessing Officer under Section 11 of the said Act, was ultra vires the provisions of Section 11 of the said Act. Any decision on the second substantial question of law, in that eventuality, will be quite redundant and unnecessary. 5. Mr. Dada, the learned Senior Advocate for the Appellants submits that the decision of the Supreme Court in GKN Driveshafts (India) Ltd. (supra) is quite clear, inasmuch as it provides that the Assessing Officer is bound to furnish the Assessee, reasons for reopening of the assessment, on demand. Further, the Assessee is entitled to raise objections and the Assessing Officer is bound to dispose of such objections by passing a speaking order, before he proceed with reopening of the assessment. Mr. Dada submits that this decision was applied by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals, in so far as the second substantial question of law in this Appeal, is concerned. For these reasons, Ms. Linhares submits that this Appeal is liable to be dismissed. 9. Rival contentions now fall for determination. 10. As noted by us above, should the first substantial question of law be answered in favour of the Appellant-Assessee, and against the Respondent-Revenue, then, there will be no necessity to advert to the second substantial question of law framed by us in our order dated 20th November, 2007. 11. In this case, the Assessing Officer, vide notice dated 13th March, 2003, sought to reopen the assessment by invoking the provisions of Section 11 of the said Act. At the reverse of this notice, the Assessing Office, had stated the reason for reopening. Accordingly, it cannot be said that no reasons were furnished to the Appellant for reopening of the assessment or that there is breach of the law laid down by the Hon'ble Apex Court in GKN Driveshafts (India) Ltd. (supra), at least, in so far as requirement of furnishing of the reasons for reopening of the assessment is concerned. To that extent, therefore, we are unable to agree with the contention of Mr. Dada that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ific context of this very Appellant, was upheld not only by this Court, but also by the Hon'ble Supreme Court. This was in ETA No.1 and 5/PANJ/01 decided by the Tribunal on 4.4.2006. 15. The aforesaid decision of the ITAT was appealed by the Respondent vide Tax Appeal No.71/2006. This appeal was dismissed by this Court vide order dated 27th November, 2006, which reads thus : " Heard the learned Counsel on behalf of the parties. This appeal is filed against the Order dated 4-4-2006 of the ITAT wherein in para 7 the learned ITAT has come to the conclusion that the Assessing Officer is required to give reasons, when asked for by the Assessee. Giving of reasons has got to be considered as implicit in Section 11 of the Expenditure Tax Act, 1987. It is now well settled that giving reasons in support of an order is part of complying with the principles of natural justice. In the light of that, no fault could be found with the order of the learned ITAT and as such no substantial question of law arises as well. Appeal dismissed." 16. The Respondent, instituted a Special Leave to Appeal (Civil) No.5711/2007 which was, however, dismissed by the Hon'ble Apex Court vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal was justified in restoring the issue to the Assessing Officer after having quashed/set aside the order dated 14th December, 2009 passed by the Assessing Officer without having disposed of the objections filed by the appellant to the reasons recorded in support of the reopening Notice dated 28th March, 2008 ?" 22. In the aforesaid case, the Assessing Officer had purported to dispose of the objections to the reasons in the assessment order, consequent upon reopening of the assessment. This Court, however, held that the proceedings for reopening of assessment prior to disposing of the Asessee's objections by passing a speaking order, was an exercise in excess of jurisdiction. 23. KSS Petron Private Ltd. (supra), this is what the Division Bench has observed at paragraphs 7 and 8 of the Judgment : "7. On further Appeal, the Tribunal passed the impugned order. By the impugned order it held that the Assessing Officer was not justified in finalizing the Assessment, without having first disposed of the objections of the appellant. This impugned order holds the Assessing Officer is obliged to do in terms of the Apex Court's decision in GKN Driveshafts (India) Ltd., v/s. ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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