RAMESH CHAND MAHESHWARI S/O SHRI LAXMI NARAIN MAHESHWARI vs. ASSISTANT COMMISSIONER OF INCOME TAX

Facts

The petitioner, Ramesh Chand Maheshwari, is challenging a notice dated March 20, 2024, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2015-16. Proceedings for this assessment year had previously been initiated under Section 153A, culminating in an order from the Income Tax Settlement Commission on October 9, 2018. Following the Section 148 notice, the petitioner was supplied with reasons for reopening and subsequently filed objections on November 16, 2024, and November 28, 2024. The petitioner's grievance is that the Assessing Officer issued a notice dated January 23, 2025, without deciding these objections, thereby not complying with the Supreme Court's decision in GKN Driveshafts (India) Ltd. The respondent's counsel acknowledged the legal position.

Held

The Tribunal held that the Assessing Officer is obligated to deal with the objections raised by the petitioner in accordance with law. The judgment noted that, as per the pleadings, the Assessing Officer was proceeding under Section 148 of the Act while ignoring the objections filed by the petitioner. The Tribunal disposed of the petition with a direction that the Assessing Officer, before proceeding further, must act in accordance with the decision of the Supreme Court in GKN Driveshafts (India) Ltd. (supra). It was clarified that if the objections had already been decided, the order should be communicated to the petitioner within one week of receiving the certified copy of the order. The ratio decidendi is that a Section 148 notice requires the Assessing Officer to pass a speaking order disposing of the assessee's objections before proceeding with the assessment, upholding principles of natural justice and established Supreme Court precedent. The operative direction is for the Assessing Officer to comply with the GKN Driveshafts judgment.

Key Issues

1. Whether the Assessing Officer is obligated to decide the objections filed by the assessee against a notice issued under Section 148 of the Income Tax Act, 1961, by passing a speaking order before proceeding with the assessment? (Question of law and mixed fact and law, turning on Section 148 and principles of natural justice). Assessee's Contention: The Assessing Officer is not complying with the Supreme Court's decision in GKN Driveshafts (India) Ltd. v. Income Tax Officer, which mandates that objections filed against a Section 148 notice must be disposed of by a speaking order before further assessment proceedings can commence. Revenue's Contention: The judgment records that the leaned counsel for the respondent was not in a position to dispute the legal position, implying no specific argument was advanced against the assessee's contention regarding the necessity of deciding objections.