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

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WPA/11183/2022HC CalcuttaWBCHCA023866202224 June 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal, considering the submissions, disposed of the writ petition by setting aside the impugned assessment order dated February 4, 2022. The matter was remanded back to the Assessing Officer. The AO was directed to pass a fresh speaking order on the petitioner's objection to the recorded reasons, ensuring that all contentions raised by the petitioner are addressed. Furthermore, the AO must consider the petitioner's response to the notice under Section 142(1), which the petitioner is to file within seven days from the date of the order. The Tribunal also emphasized that the petitioner must be provided an opportunity of hearing before the fresh assessment order is passed. No specific finding was made on the merits of the assessment itself, as the order was set aside on procedural grounds.

What were the facts?

The petitioner, Subh Stock Broking Pvt. Ltd., challenged an assessment order dated February 4, 2022, passed under Section 147 of the Income Tax Act, 1961, for assessment year 2015-16. The challenge was primarily based on two grounds: firstly, that the Assessing Officer (AO) rejected the petitioner's objections to the recorded reasons through a non-speaking order, failing to address the contentions raised. Secondly, the AO issued a notice under Section 142(1) on February 3, 2022, granting time until February 10, 2022, to furnish documents, but then passed the assessment order on February 4, 2022, before the stipulated time expired. This, the petitioner argued, violated the principles of natural justice.

What were the issues?

1. Whether the Assessing Officer's rejection of the petitioner's objection to the recorded reasons, by passing a non-speaking order without dealing with the contentions raised, is in violation of principles of natural justice, turning on Section 147 of the Income Tax Act, 1961. 2. Whether the Assessing Officer's passing of an assessment order on February 4, 2022, prior to the expiry of the time granted in a notice under Section 142(1) dated February 3, 2022, violates the principles of natural justice, turning on Section 142(1) and Section 147 of the Income Tax Act, 1961. Assessee's Contentions: The petitioner argued that the rejection of its objections was done via a non-speaking order and that the AO passed the assessment order prematurely, violating natural justice principles. Revenue's Contentions: The judgment records arguments for the petitioner and the Union of India (UOI), but the specific contentions of the revenue are not detailed beyond the appearance of their counsel.

Which sections of the Income-tax Act were involved?

Section 147,Section 142(1)

AI-generated summary — verify with the full judgment below

24.06.2022. p.b. Sl. No.17. W.P.A. 11183 of 2022 Subh Stock Broking Pvt. Ltd. Vs. Deputy Commissioner of Income Tax, Circle-8)1), Kolkata & Ors. Mr. Avra Mazumder, Mr. Sk. Md. Bilwal Hossain, Mr. Binayak Gupta. ……..for the petitioner. Mr. Om Narayan Rai. ……..for the UOI. 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 2015-16 mainly on two grounds, namely that the petitioner’s objection to the recorded reason was rejected by passing a non-speaking order and without dealing with the contentions raised in its objection to the recorded reason and secondly that before passing the impugned assessment order, the assessing officer had issued a notice dated 3rd February, 2022 under Section 142(1) of the Act by which petitioner was asked to furnish relevant documents on or before 10th February, 2022 and without waiting for the response by the petitioner against the aforesaid notice dated 3rd February, 2022 by which time was granted by the assessing officer himself to the

2 petitioner, the assessing officer on 4th February, 2022 passed the impugned assessment order which is in violation of the principle of natural justice. Considering the submission of the parties, this writ petition being WPA No.11183 of 2022 is disposed of by setting aside the impugned assessment order dated 4th February, 2022 and the matter is remanded back to the assessing officer concerned to pass fresh speaking order on the objection to the recorded reason by dealing with the contentions raised by the petitioner in its objection and further considering the response to the notice under Section 142(1) of the Act which is to be filed by the petitioner within seven days from date. Needless to mention that before passing the fresh assessment order, the opportunity of hearing should be provided to the petitioner. With this observation and direction, this writ petition being WPA No.11183 of 2022 is disposed of. (Md. Nizamuddin, J.)

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