High Court directed AO to decide objections before re-assessment as per law laid down by Supreme Court

AO directed to decide objections before making re-assessment as per law laid down by Supreme Court in the case of GKN Driveshafts (India) Limited

ABCAUS Case Law Citation:
ABCAUS 2621 (2018) (11) HC

Important Case Laws Cited/relied upon:
GKN Driveshafts (India) Limited Vs. Income Tax Officer (2003) 259 ITR 19 (SC)

The petitioner had been supplied with the ‘reasons to believe’ on which satisfaction had been recorded by the Assessing Officer (AO) that the income of the petitioner had escaped assessment necessitating notice for reopening / reassessment u/s 148 of the Income Tax Act, 1961 (the Act).

The petitioner in response to the above notice and the ‘reasons to believe’ so supplied had filed objections but the same had not been considered as no order, passed thereon had been supplied or intimated to the petitioner. 

In this background, the petitioner had preferred a writ petition against the show cause notice issued under Section 147 of Act for the purposes of re-assessment.

The submission of the petitioner was that the Income Tax Authorities can not proceed with the reassessment proceedings without deciding the objections and that in respect of the a preceding assessment year, re-assessment on similar grounds was done and the said assessment was under challenge by the petitioner in appeal before the CIT (appeals) which was pending. 

The Hon’ble High Court observed that in the Hon’ble Supreme Court had held that once notice of reassessment is given, the assessee has a right to demand ‘reasons to believe’ and on supply of the reasons he may prefer objections and in case objections are so filed, the assessing officer is obliged to decide the same by a speaking order.

In view of the above, the Hon’ble High Court opined that since the objections of the petitioner had not been considered and decided it would be proper that the petitioner should wait for the decision of the same. 

Accordingly, the Hon’ble High Court declined to exercise its discretionary jurisdiction in the matter at this stage.

The Hon’ble High Court directed that the Income Tax Authority would before making the re-assessment, decide the objections. The petitioner was also advised to get the pending appeal decided with observation that the CIT(A) would consider the request of the petitioner for expeditious disposal.

 Download Full Judgment Click Here >>

Also Read:
Non disposal of reopening objection not make order void. It’s Procedure irregularity curable by remitting Click Here >>