SUBH STOCK BROKING PVT LTD vs. DY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 4(4) AND ORS

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WPA/10845/2022HC CalcuttaWBCHCA023262202229 June 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the impugned assessment order dated February 4, 2022, was unsustainable. The reasoning was that the order rejecting the petitioner's objections was non-speaking and did not discuss or deal with the issues raised by the petitioner. The subsequent assessment order was passed on the very next day without proper procedural compliance, specifically without issuing notices under Section 142(1) or 143(2) of the Act. Consequently, the Tribunal set aside the assessment order and remanded the matter back to the Assessing Officer. The Assessing Officer was directed to pass a fresh, reasoned, and speaking order on the petitioner's objections dated January 24, 2022, and thereafter proceed with the reassessment proceedings in accordance with the law, after providing an opportunity of hearing to the petitioner. This decision is based on the principle that assessment proceedings must adhere to principles of natural justice and statutory procedures.

What were the facts?

The petitioner, Subh Stock Broking Private Limited, filed a writ petition challenging an assessment order dated February 4, 2022, passed under Section 147 of the Income Tax Act, 1961, for the assessment year 2016-17. The petitioner argued that the assessment order was non-speaking, lacked procedural fairness, and failed to address their objections against the reasons for reopening the assessment. The petitioner had filed objections on January 24, 2022. The Assessing Officer rejected these objections on February 3, 2022, through a non-speaking order. The assessment order was then passed the very next day without issuing notices under Section 142(1) or 143(2) of the Act.

What were the issues?

1. Whether the assessment order dated February 4, 2022, passed under Section 147 of the Income Tax Act, 1961, is a valid and speaking order, having duly considered the petitioner's objections against the reasons for reopening. Assessee's Contentions: The petitioner contended that the assessment order was non-speaking, procedurally flawed, and failed to properly consider and deal with their objections filed against the recorded reasons for reopening. They specifically highlighted that the order rejecting their objections was also non-speaking and did not address their contentions. Furthermore, the assessment order was passed without issuing mandatory notices under Section 142(1) or 143(2) of the Act. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 147,Section 142(1),Section 143(2)

AI-generated summary — verify with the full judgment below

29.06.2022. p.b. Sl. No.5. W.P.A. 10845 of 2022 Subh Stock Broking Private Limited Vs. Deputy Commissioner of Income Tax, Circle – 4(4), Kolkata & Ors. Mr. Avra Mazumder, Mr. Sk. Bilwas Hossain. ……..for the petitioner. Mr. Prithu Dhudoria. ……..for the respondent. Heard learned advocates appearing for the parties. By this writ petition, petitioner has challenged the impugned assessment order dated 4th February, 2022 under Section 147 of the Income Tax Act, 1961 relating to the assessment year 2016-17, on the ground that the said order is a non-speaking order and is without observing procedure of law and by not properly considering and dealing with the objection of the petitioner against the recorded reason in its order of rejection of the objection. It appears from record that on 24th January, 2022 the petitioner had filed an objection against the recorded reason for reopening of the impugned reassessment proceeding as appears from page 153 of the writ petition. It appears from Annexure P-11 at page 163 of the writ petition that the aforesaid objection of the petitioner was rejected by passing an order dated 3rd February, 2022 and

2 on perusal of which, I find that the same is non-speaking order without dealing or discussing with the contentions/issues raised by the petitioner in its objection dated 24th January, 2022 and assessment order was passed on the very next day after rejecting the petitioner’s objection without issuing any notice under Section 142(1) or Section 143(2) of the Act. Considering the submission of the parties and in view of the discussions made above, the impugned assessment order dated 4th February, 2022 is set aside and the matter is remanded back to the Assessing Officer concerned to pass a fresh assessment order after passing a reasoned and speaking order on the objection of the petitioner dated 24th January, 2022 and the respondent Assessing Officer shall proceed with the impugned reassessment proceeding in accordance with law after passing a fresh order on the aforesaid objection of the petitioner after giving an opportunity of hearing to the petitioner or his authorised representatives, within four weeks from date. With this observation and direction, this writ petition being WPA No.10845 of 2022 stands disposed of. (Md. Nizamuddin, J.)

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