TMI Blog2015 (8) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench in the case of Sahakari Khand Udyog Mandal Ltd (2014 (6) TMI 149 - GUJARAT HIGH COURT) - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 4193 of 2015 With SPECIAL CIVIL APPLICATION NO. 4194 of 2015 - - - Dated:- 7-5-2015 - MR. M.R. SHAH AND MR. S.H.VORA, JJ. FOR THE PETITIONER : MR MANISH J SHAH, ADVOCATE FOR THE RESPONDENT : MR NITIN K MEHTA, ADVOCATE JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. As common question of law and facts arise in both these petitions, they are disposed of by this common judgment and order. 2.0. By way of this petition under Article 226 of the Constitution of India, common petitioner assessee has prayed for an appropriate writ, direction and order to quash and set aside the impugned notices under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for AY 200708 and 200910 as well as respective orders disposing of the objections raised against the initiation of reassessment proceedings. 2.1. Special Civil Application No.4193 of 2015 has been preferred by the petitioner to quash and set aside the impugned notice under Section 148 of the Act for AY 200910 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed time i.e. not within 30 days of receipt of notice under Section 148 of the Act, the assessee's objections raised against reopening proceedings is not acceptable as the case warrants scrutiny on the same lines. That while disposing of the objections and observing as above, the AO has considered and relied upon the decision of the Division Bench of this Court in the case of Sahakari Khand Udyog Mandal Ltd vs. ACIT reported in (2015)370 ITR (Guj). 3.1. Hence, as the objections raised by the petitioner against the reopening of the assessment for AY 200910 has not been decided and dealt with by the AO on merits and without considering the objections on merits the AO has disposed of / overruled the said objection, the petitioner has preferred present Special Civil Application under Article 226 of the Constitution of India challenging notice under Section 148 of the Act as well as order disposing of the objections against reopening of the assessment for AY 200910. Special Civil Application No. 4194 of 2015 4.0. That the petitionerassessee filed return of income for AY 200708 at ₹ 1,32,04,634/on 15.11.2007. That the return was accepted by the department under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d objection, the petitioner has preferred present Special Civil Application under Article 226 of the Constitution of India challenging notice under Section 148 of the Act as well as order disposing of the objections against reopening of the assessment for AY 200708. 5.0. Shri J.P. Shah, learned advocate for the petitionerassessee has vehemently submitted that the AO has materially erred in not considering, deciding and disposing of the objection raised by the petitioner against reopening of the assessment on merits. 5.1. It is vehemently submitted by Shri J.P. Shah, learned advocate for the petitioner assessee that the AO has materially erred in not disposing of the objection on merits solely on the ground that the petitioner assessee had not filed the revised the return pursuant to the notice under Section 148 of the Act within a period not less than 30 days from receipt of the notice under Section 148 of the Act. It is submitted that by not deciding / disposing of the objection on merits on the aforesaid ground, the AO has misinterpreted the directions issued by the Division Bench of this Court in the case of Sahakari Khand Udyog Mandal Ltd (supra). It is vehementl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Division Bench of this Court in the case of Arvind Mills Limited vs. Assistant Commissioner of Wealth Tax reported in (2004) 141 Taxman 210(Guj), it is requested to allow the present Special Civil Applications and grant the reliefs as prayed for. 6.0. Shri Nitin Mehta, learned advocate has appeared on behalf of revenue and has tried to support the impugned order, by relying upon the affidavit in reply. It is vehemently submitted that while disposing of the objections raised by the assessee against reopening of the respective assessments, the AO has considered and followed the decision of the Division Bench of this Court in the case of Sahakari Khand Udyog Mandal Ltd (supra). It is submitted that as for number of months the assessee did not respond to the notice under Section 148 of the Act and did not file any return of income pursuant to the notice under Section 148 of the Act, the AO has rightly disposed of the objections by impugned orders. Therefore, it is requested to dismiss the present Special Civil Applications. 6.1. At this stage, it is required to be noted that learned advocates for the parties have tried to make submission on merits, however for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s far as possible, within four months of date of receipt of the objections filed by the assessee. 4. This is being done in order to ensure that sufficient time is available with the Assessing Officer to frame the assessment after carrying out proper scrutiny. The requirement and the timeframe for supplying the reasons without being demanded by the assessee would be applicable only if the assessee files his return of income within the period permitted in the notice for reopening. Likewise the time frame for the Assessing Officer to dispose of the objections would apply only if the assessee raises objections within the time provided hereinabove. This, however, would not mean that if in either case, the assessee misses the time limit, the procedure provided by the Supreme Court in the case of GKN Driveshafts (India) Ltd (supra) would not apply. It only means that the time frame provided hereinabove would not apply in such cases. 5. In the communication supplying the reasons recorded by the Assessing Officer, he shall intimate to the assessee that he is expected to raise the objections within 60 days of receipt of the reasons and shall reproduce the directions contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO to dispose of the objections within four months. As further clarified even in case the assessee misses the time limit, the procedure provided by the Supreme Court in the case of GKN Driveshafts (India) Ltd (supra) shall be followed. It is true that on receipt of notice under Section 148 of the Act, the assessee is required to file return within time prescribed in such notice and / or within reasonable time and simultaneously asked for the reasons recorded for reopening and AO is bound to dispose of such objections within time provided by the Division Bench in the case of Sahakari Khand Udyog Mandal Ltd (supra), however in any case before the order of assessment under Section 143(3) r/w Section 147 of the Act. However, at this stage also, the AO must give reasonable time to the assessee to challenge the order disposing of the objection by way of petition under Article 226 of the Constitution of India. 8.2. In the case of GKN Driveshafts (India) Ltd (supra), the Hon'ble Supreme Court has laid down an elaborate procedure as to the manner of dealing with objections raised against a notice under Section 148 of the Act in the following words:- However, we clarify that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenge to the reassessment notice in two stages, that is, i) raising preliminary objections before the Assessing Officer and in case of failure before the Assessing Officer, ii) challenging the speaking order of the Assessing Officer under section 148 of the Act (p.87). 8.4. Thereafter, in the case of Arvind Mills Ltd. (Supra), the Division Bench of this Court had an opportunity to consider the aforesaid two decisions and after considering both the aforesaid decisions, in para 9 the Division Bench has observed and held as under: 9. The position in law is thus well settled. After a notice for reassessment has been issued an assessee is required to file the return and 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. 8.5. Thus, considering the aforesaid decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er giving reasonable time to the assessee to challenge the decision / order disposing of the objections. 9.0. In view of the above and for the reasons stated above, as the AO has not dealt with and disposed of the objections raised by the assessee against reopening of the assessment on merits meaning thereby has disposed of the objections without considering the objections on merits solely on the ground that assessee has not filed return of income within period not less than 30 days from the date of receipt of notice under Section 1 48 of the Act, impugned orders disposing of the objections are hereby quashed and set aside and the matters are remanded to the AO to consider, decide and dispose of the objections on its own merits and in accordance with law and in light of the observations made herein above. The aforesaid exercise shall be completed by the AO within a period of two months from the date of receipt of writ of the present order. However, it is made clear that this Court has not expressed anything on merits with respect to legality and validity of the notice under Section 148 of the Act or even with respect to objections raised against the reopening of the assessment f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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