SYSMECH INDUSTRIES LLP vs. ASSESSING OFFICER,INCOME TAX DEPARTMENT, GURUGRAM , HARYANA

Facts

The petitioner, Sysmech Industries LLP, challenged subsequent assessments initiated under Sections 148 and 149 of the Income Tax Act, 1961. The petitioner contended that after initiating action under Section 148, they filed objections which were acknowledged by the revenue's portal. However, the Assessing Officer proceeded to pass an order and issue a demand notice under Section 156 without deciding these objections or issuing a show cause notice. The revenue's stand was that these objections never reached the Assessing Officer.

Held

The High Court held that once the objections were duly uploaded on the revenue's portal, the revenue's argument that the objections never reached the Assessing Officer would not be available. The Court relied on precedents like GKN Driveshafts (India) Ltd. vs. ITO, which mandate that the Assessing Officer is bound to pass a speaking order on the objections raised by the petitioner after giving them an opportunity of hearing. Consequently, the Court set aside the impugned order and granted liberty to the revenue to re-examine the issue after considering the objections filed by the petitioner. The petition was disposed of accordingly.

Key Issues

1. Whether the Assessing Officer is bound to decide the objections filed by the assessee against the initiation of proceedings under Section 148 of the Income Tax Act, 1961, after providing an opportunity of hearing, before passing the assessment order? Assessee's Contention: The petitioner argued that the Assessing Officer must pass a speaking order on the objections raised, citing decisions from the Supreme Court and various High Courts, including GKN Driveshafts (India) Ltd. vs. ITO, Garden Finance Ltd. vs. Asstt. Commissioner of Income Tax, and Home Finders Housing Ltd. vs. ITO, Chennai. Revenue's Contention: The revenue argued that the objections filed by the petitioner never reached the Assessing Officer.