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SIMABEN VINODRAI RAVANI Versus INCOME TAX OFFICER

2017 (2) TMI 648 - GUJARAT HIGH COURT

Validity of reopening of assessment - objections by the petitioner against the reopening rejected - Held that:- We set aside the reassessment order which was passed without disposing of the objections raised by the assessee. See Banaskantha District Oilseeds Growers Co-Op. Union Ltd. Versus ACIT [2015 (8) TMI 269 - GUJARAT HIGH COURT] - Impugned assessment order dated 30.12.2016 passed by the Assessing Officer is hereby quashed and set aside. Consequently, the demand notice dated 30.12.2016 .....

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reafter after giving some reasonable time to the petitioner to challenge the decision dispose of the objections (in case the Assessing Officer overrules the objections raised by the petitioner by a speaking order). - SPECIAL CIVIL APPLICATION NO. 202 of 2017 - Dated:- 7-2-2017 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE PETITIONER : MR JP SHAH, SR. ADVOCATE for MR MANISH J SHAH, ADVOCATE FOR THE RESPONDENT : MRS MAUNA M BHATT, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1 .....

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8 of the Income Tax Act, 1961 (hereinafter referred to as Act ) at AnnexureG and the reassessment order under Section 143(3) of the Act, which is at AnnexureT. [3.0] Facts leading to the present Special Civil Application in nutshell are as under: [3.1] That the petitioner assessee filed her return of income for AY 200910 on 30.09.2009. Subsequently, the scrutiny assessment under Section 143(3) of the Act was framed by the Assessing Officer on 14.12.2011. [3.2] That thereafter after a period of m .....

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tioner assessee that the respondent by its letter dated 12.04.2016 asked the petitioner to file the return of income in response to notice under Section 148 of the Act and stated further that only thereafter, he will provide copy of the reasons recorded. That the petitioner assessee by letter dated 11.04.2016 requested the respondent to take the return filed earlier, as the return filed in response to his notice and once again requested the respondent to supply copy of the reasons recorded. That .....

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016 wherein the loss of ₹ 6,62,21,537/came to be disallowed and resultantly the total income of the petitioner came to be assessed at ₹ 4,60,48,650/. Simultaneously, the respondent sent to the petitioner a demand notice dated 30.12.2016 for ₹ 2,99,93,940/. [3.3] Feeling aggrieved and dissatisfied with the impugned notice under Section 148 of the Act as well as reassessment order for AY 200910, the assessee has preferred the present Special Civil Application under Article 226 of .....

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r the decision of the Hon ble Supreme Court in the case of G.K.N. Driveshafts (India) Ltd. v. ITO reported in (2003) 259 ITR 19 and the decision of the Division Bench of this Court in the case of Arvind Mills Ltd. v. Assistant Commissioner of Wealth Tax reported in (2014) 141 Taxmann 210 (Guj.), 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 f .....

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ions raised by the petitioner and that too while passing the order of Assessment under Section 143(3) r/W. Section 147 of the Act. It is submitted that therefore the impugned order of assessment is absolutely illegal, arbitrary and the same deserves to be quashed and set aside. [5.0] Mrs. Bhatt, learned Counsel appearing on behalf of the Revenue is not in a position to dispute that the objections raised by the petitioner on 24.11.2016, which are raised against reopening of the assessment, were n .....

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03.2016. That the assessee asked the reasons recorded to reopen the assessment which came to be supplied / furnished by the Assessing Officer on 14.07.2016 along with the notice under Section 143(2) of the Act and the questionnaire. That the assessee raised the objections against the reasons recorded to reopen the assessment on 24.11.2016. Without dealing with and/or disposing of the said objections the Assessing Officer has framed the reassessment on 30.12.2016 and has simultaneously issued the .....

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ds: ...However, we clarify that when a notice under section 148 of the Incometax Act is issued, the proper course of action 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 rea .....

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has been thus laid down by this Court as under: What the Supreme Court has now done in the G.K.N. Case (2003)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 o .....

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that the rigour of availing of the alternative remedy before the Assessing Officer for objecting to the reassessment 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 reassessment notice in two stages, that is, i) raising preliminary ob .....

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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 y .....

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f the above and for the reasons stated above, present Special Civil Application succeeds in part. Impugned assessment order dated 30.12.2016 passed by the Assessing Officer is hereby quashed and set aside. Consequently, the demand notice dated 30.12.2016 is also quashed and set aside. The matter is remitted to the file of the Assessing Officer at the stage of submitting the objections by the petitioner against the reopening of the assessment for AY 200910. The Assessing Officer now to deal with .....

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