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TMI Blog2024 (8) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... hich now ought to be considered as the appropriate reasons. Such a plea cannot be taken after the assessment order is already passed. In our opinion, it is not permissible for the Respondents-Revenue to raise such contentions as this will be completely contrary to the well settled principles of law and the sanctity of the procedure u/s 148 as it stood applicable for the assessment year in question We therefore reject the case of the Respondents-Revenue in this regard that now the Petitioner needs to respond to the reasons which form part of the approval granted u/s 151 and that too without the same being issued to the petitioner in a manner known to the law by the AO This is a clear case where the AO in fact has adopted different approaches, firstly, in furnishing different reasons to the assessee than what was placed before the Joint Commissioner. Things did not stop here, the AO thereafter decided to proceed in breach of the law, as if he was not aware about the rules which are required to be followed by him, namely, that once he had furnished reasons and to which objections were raised by the Petitioner, as a mandate of law, he was required to pass a speaking order disposing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March 2022 (Exhibit C) and Impugned Penalty Notice dated 31 March 2022 (Exhibit D) are illegal, arbitrary, in total contravention of the principles of natural justice, and liable to be quashed; (b) Issue a writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction, quashing the Impugned Reopening Notice dated 30 March 2021 (Exhibit A), Impugned Assessment Order dated 31 March 2022 (Exhibit B), Impugned Notice of Demand dated 31 March 2022 (Exhibit C) and Impugned Penalty Notice dated 31 March 2022 (Exhibit D); (c) Issue a writ of Prohibition or a writ in the nature of Prohibition restraining the Respondents from acting pursuant to or in furtherance of the Impugned Reopening Notice dated 30 March 2021 (Exhibit A). Impugned Assessment Order dated 31 March 2022 (Exhibit B), Impugned Notice of Demand dated 31 March 2022 (Exhibit C) and Impugned Penalty Notice dated 31 March 2022 (Exhibit D); (d) Issue a writ of Mandamus or a writ in the nature of Mandamus, directing the Respondents to forthwith withdraw and cancel the Impugned Reopening Notice dated 30 March 2021 (Exhibit A), Impugned Assessment Order dated 31 March 2022 (Exhibit B) Impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court in Asian Paints v. DCIT 296 ITR 90 (Bom). 4. It is on such backdrop on 10 December, 2021 a notice under Section 142 (1) of the Act to commence the reassessment proceeding was issued to the Petitioner. In the process of such assessment, there were further flaws as pointed out by the Petitioner, including the use of an erroneous e-mail ID of the Petitioner other than the registered e-mail ID, which was not used and considered in addressing communications to the Petitioner. All such errors as contended by the Petitioner have culminated into a show cause notice being issued to the Petitioner on 30 March, 2022 proposing an addition on the alleged transactions with a total stranger one M/s. Kushal Group, when in fact there were no such transactions with the said group. In fact what was earlier contained in the show cause notice was the transaction with M/s. Toyam Industries, being subject matter of the reasons as furnished to the Petitioner to reopen the assessment. The objections of the Petitioner in that regard were not disposed of. However, before the Petitioner could contest such show cause notice on these contentions, the AO proceeded to finalise the assessment, by issuing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner are illegal and invalid in law. The primary submission of Mr. Naniwadekar is to the effect that the objections which were raised by the Petitioner to the reasons as furnished, as annexed to the notice dated 30 September, 2021, issued under Section 143 (2) read with Section 147 of the Act, itself were not disposed of. It is submitted that the non-disposal of such objections by the AO go to the root matter, as such approach of the AO would be contrary to the decision of the Supreme Court in the case of GKN Driveshafts (India) Ltd. (Supra), wherein the Supreme Court has categorically observed that the AO is bound to furnish reasons in a reasonable time, and on basis of such reasons the noticee is entitled to file objections to the issuance of notice, and the Assessing Officer is bound to dispose of the same by a speaking order, which admittedly is not passed in the present proceedings. Since, the Assessing Officer had not disposed of the objections by a speaking order, the assessment as undertaken by the AO would required to be held to be illegal. 7. This apart, Mr. Naniwadekar would next submit that now the department cannot for the first time furnish fresh reasons and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as furnished are being substituted by fresh reasons as annexed to the approval granted by the Joint Commissioner to be the real reasons. We are quite astonished at such stance being taken on behalf of the Respondents-Revenue. As the facts stand, leading to the impugned reassessment order dated 31 March, 2022, it is quite clear that such order was passed on the basis of reasons which were furnished to the Petitioner under a notice issued under Section 143 (2) read with Section 147, and to which objections were raised by the Petitioner vide reply dated 15 October, 2021 which were not disposed of by passing a speaking order. Thus, as observed hereinabove, the case is clearly hit by the principles of law as laid down by the Supreme Court in the case of GKN Driveshafts (India) Ltd. (Supra) and on this basic issue, the impugned order will be required to be quashed and set aside. 11. We also cannot countenance an argument as urged on behalf of the department that sanctity should be attributed to the fresh reasons which form part of the approval granted by the Joint Commissioner under Section 151 of the Act, and which now ought to be considered as the appropriate reasons. Such a plea canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly when they are responsible to deal with such large amounts of revenue, being not brought to tax, and as to whether any performance audit, vigilance or enquiry is conducted against such Officers and their actions in respect of several assessees is subjected to any scrutiny by the concerned Principal Commissioner of Income-tax under whose jurisdiction, such Assessing Officer discharges their duties. We are required to make these observations as the facts in the present case are quite glaring. The assessee in our opinion is correct in questioning the actions of the department that these are flawed, however, whether the AO ought to have been so reckless is the issue, which is an issue which the high officials of the department need to ponder on. 13. For all these reasons the petition needs to succeed, it is accordingly allowed in terms of prayer clause (b) which reads thus:- (b) Issue a writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction, quashing the Impugned Reopening Notice dated 30 March 2021 ( Exhibit A ), Impugned Assessment Order dated 31 March 2022 ( Exhibit B ), Impugned Notice of Demand dated 31 March 2022 ( Exhibit C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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