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Banaskantha District Oilseeds Growers Co-Op. Union Ltd. Versus ACIT

2015 (8) TMI 269 - GUJARAT HIGH COURT

Reopening of assessment - non disposing of the objections raised by the petitioner, raised against the reopening of the assessment/reasons recorded by AO - Held that:- The detailed objections were raised against reopening of the assessment on 11.06.2014, the Assessing Officer did not disposed of the same till the assessment order came to be passed under Section 143(3) r/W Section 147 of the Act and has dealt with and disposed of the objections simultaneously while passing the assessment order an .....

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gned assessment order cannot be sustained and the matter is remanded to the learned Assessing Officer by directing the Assessing Officer to pass a speaking order and to dispose of the objections raised by the petitioner against reopening of the assessment and/or against reasons recorded for reopening of the assessment and thereafter to communicate the outcome of the same to the petitioner and after giving reasonable time to the petitioner to challenge the same before higher Court / Forum, may pr .....

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ed:- 7-5-2015 - M. R. Shah And S. H. Vora, JJ. For the Appellant : Mr Tej Shah, Adv. For the Respondent : Mr Nitin K Mehta, Adv. JUDGMENT (Per : Honourable Mr. Justice M. R. Shah) [1.0] RULE. Shri Nitin Mehta, learned advocate waives service of notice of Rule on behalf of the respondent. In the facts and circumstances of the case and with the consent of learned advocates appearing for respective parties, present petition is taken up for final hearing today. [2.0] By way of this petition under Ar .....

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er under Section 143(3) read with Section 147 of the Act for AY 200910. [3.0] Facts leading to the present Special Civil Application in nutshell are as under: [3.1] That the petitioner - assessee - Cooperative Society engaged in the business of processing of oil seeds and trading of oil filed the return of income for the Assessment Year 2009-10 declaring total loss of ₹ 87,95,310/-. That the case was selected for scrutiny under Section 143(3) of the Act. That thereafter the Assessing Offic .....

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ing of the assessment for AY 2009-10. That on receipt of the reasons recorded for reopening the assessment under Section 147 of the Act for the AY 2009-10, immediately the petitioner - assessee raised the objections to the reasons recorded and against reopening of the assessment by submitting detail objections on 11.06.2014. That instead of deciding the objections before proceeding further with the assessment/reassessment, and simultaneously while passing the assessment/reassessment order on 20. .....

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t order under Section 143(3) read with Section 147 of the Act is absolutely illegal. It is submitted that in the present case the Assessing Officer earlier did not dispose of the objections raised by the petitioner, raised against the reopening of the assessment/reasons recorded for reopening of the assessment on 11.06.2014 and without deciding and disposing of the same earlier, the Assessing Officer had dealt with and disposed of the objections simultaneously while passing the assessment order .....

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uj.), the Assessing Officer is bound / obliged to dispose of the preliminary objections against reopening, by passing a speaking order, before proceeding with the assessment in respect of the assessment year for which such notice has been issued. It is submitted that the aforesaid is held to be mandatory. [4.2] It is further submitted that even while considering / deciding and/or disposing of the objections against the reopening of the assessment, the Assessing Officer is bound to pass a speakin .....

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itin Mehta, learned advocate appearing on behalf of the respondent is not in a position to dispute that the objections raised by the petitioner on 11.06.2014 which are raised against reopening of the assessment came to be dealt with and disposed of by the Assessing Officer simultaneously while passing the assessment order. [6.0] Heard learned advocates appearing for respective parties at length. At the outset it is required to be noted that the notice under section 148 of the Act to reopen the a .....

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dispose of the said objections earlier and has dealt with and disposed of the said objections simultaneously while passing the assessment order dated 20.03.2015. It is required to be noted that between the objections raised on 11.06.2014 and the order of assessment dated 20.03.2015, there was sufficient time with the Assessing Officer to deal with and dispose of the objections i.e. approximately 9 months. That the Assessing Officer has dealt with and disposed of the objections raised by the peti .....

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tion for the notice is to file a return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the notice is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the instance case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by pas .....

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3)259 ITR 19 is not to whittle down the principle laid down by the Constitution Bench of the Apex Court in Calcutta Discount Co. Ltd. case (1961) 41 ITR 191 but to require the assessee first to lodge preliminary objection before the Assessing Officer who is bound to decide the preliminary objections to issuance of the reassessment notice by passing a speaking order and, therefore, if such order on the preliminary objections is still against the assessee, the assessee will get an opportunity to c .....

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eassessment notice under section 148 has been considerably softened by the Apex Court in G.K.N. case (2003) 259 ITR 19 in the year 2003. In my view, therefore, the G.K.N. case (2003) 259 ITR 19 (SC) does not run counter to the Calcutta Discount Co. Ltd. case (1961) 41 ITR 191 (SC) but it merely provides for challenge to the re-assessment notice in two stages, that is,- i) raising preliminary objections before the Assessing Officer and in case of failure before the Assessing Officer, ii) challeng .....

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d seek reasons for issuance of such notice. The Assessing Officer is then bound to supply the reasons within a reasonable time. On receipt of reasons, the assessee is entitled to file preliminary objections to issuance of notice and the Assessing Officer is under a mandate to dispose of such preliminary objections by passing a speaking order, before proceeding with the assessment in respect of the assessment year for which such notice has been issued." [7.0] In view of the aforesaid binding .....

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sessment order and that too by a non-speaking order. As observed by the Hon'ble Supreme Court in the case of G.K.N. Driveshaft (India) Ltd. (Supra) and the decision of the Division Bench of this Court in the case of Arvind Mills Ltd. (Supra), the Assessing Officer is not only under a mandate to dispose of such preliminary objection before proceeding with the assessment, even the Assessing Officer is under a mandate to dispose of such preliminary objections by passing a speaking order. Under .....

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