SANDEEP STOCKS PVT LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX ANR

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CW/7463/2017HC RajasthanRJHC02077950201711 February 2025Bench: AVNEESH JHINGAN,PRAMIL KUMAR MATHUR3 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the proceedings for reopening of assessment are vitiated in law if the material referred to in the "reasons to believe" was not supplied to the petitioner and the objections demanding such material were not dealt with. The Tribunal relied on the Supreme Court's decision in Gkn Driveshafts (India) Ltd. and the Division Bench's decision in Micro Marbles Pvt. Limited. The reasoning was that the Assessing Officer is obligated to supply the reasons for reopening and to decide the objections by passing a reasoned order. Since the order dated 17.02.2017 did not supply the requested material nor dealt with the objection demanding it, the order was set aside. The writ petition was allowed, and the matter was remitted back to the respondent No.2 (Deputy Commissioner of Income Tax) to decide the objections in accordance with law. The petitioner was directed to appear on 12.03.2025.

What were the facts?

The petitioner, Sandeep Stocks Pvt. Ltd., filed its return for Assessment Year 2011-12 declaring an income of Rs. 15,43,31,590/-. The Assistant Commissioner of Income Tax (ACIT) initiated proceedings under Section 148 of the Income Tax Act, 1961, by issuing a notice dated 27.09.2016. The petitioner filed objections on 02.02.2017, which were disposed of by the ACIT via an order dated 17.02.2017. The petitioner's grievance was that the department failed to supply the material relied upon for issuing the notice and did not address this specific objection in its disposal order.

What were the issues?

1. Whether the proceedings for reopening of assessment under Section 148 of the Income Tax Act, 1961, are vitiated in law when the material referred to in the "reasons to believe" was not supplied to the petitioner and the objections demanding such material were not dealt with by the Assessing Officer. The assessee contended that the Assessing Officer was obligated to supply the material relied upon for reopening and to decide the objections filed by the assessee in a reasoned manner. The assessee relied on the Supreme Court's decision in Gkn Driveshafts (India) Ltd. vs. Income Tax Officer And Ors. and the Division Bench of the Rajasthan High Court in Micro Marbles Pvt. Limited Vs. Office of Income Tax Officer. The revenue did not record any specific arguments in the judgment.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

[2025:RJ-JP:6180-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 7463/2017 Sandeep Stocks Pvt. Ltd. Registered Office At A-40 A, Bajaj Nagar Opposite Gandhinagar Railway Stat, Aa-5, Anita Colony, Bajaj Nagar, Jaipur-302015 ----Petitioner Versus 1. Assistant Commissioner Of Income Tax, Circle-6, Jaipur 2. Deputy Commissioner Of Income Tax, Central Circle-4, Jaipur ----Respondents For Petitioner(s) : Mr.Prakul Khurana Mr.Rajat Sharma Mr.Akshay Sharma for Mr.Sanjay Jhanwar, Sr. Adv. For Respondent(s) : Mr.Sandeep Pathak with Mr.Akshay Sharma HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE PRAMIL KUMAR MATHUR Order 12/02/2025 AVNEESH JHINGAN, J (ORAL):- 1. This petition is filed seeking quashing of notice dated 27.09.2016 issued under Section 148 of the Income Tax Act, 1961 (for short ‘the Act’). 2. Brief facts are that the petitioner filed returns for the Assessment Year 2011-12 declaring total income of Rs.15,43,31,590/-. The proceedings under Section 148 of the Act were initiated by issuance of impugned notice. The objections filed by petitioner on 02.02.2017 were disposed of vide order dated 17.02.2017.

[2025:RJ-JP:6180-DB] (2 of 3) [CW-7463/2017] 3. The grievance raised is that petitioner demanded the material relied upon by the department but neither the needful was done nor this objection was dealt. 4. In the case of Gkn Driveshafts (India) Ltd. vs. Income Tax Officer And Ors. reported in 259 ITR Page 19, the Supreme Court held that the assessee after filing the return in pursuance to the notice issued under Section 148 of the Act shall be supplied reasons for re-opening to which objections could be filed. The Assessing Officer was obligated to decide the objections by passing a reasoned order. 5. The Division Bench of this Court in the case of Micro Marbles Pvt. Limited Vs. Office of Income Tax Officer reported in (2023) 457 ITR 569 held that the material referred to and the reasons to believe should be supplied to the assessee. The operative part of the order is quoted below:- “13. In view of the aforesaid facts and circumstances, we are of the opinion that shorn of all other technical aspects which may have been raised before us, the very fact that the material referred to in the “reasons to believe” was not supplied to the petitioner, the entire proceedings for the reopening of the assessment and leading to the consequential assessment stand vitiated in law.” 6. From perusal of the order dated 17.02.2017, it is evident that neither the material asked for was supplied to the petitioner nor the objection demanding the material was dealt with. Consequently, the order dated 17.02.2017 is set aside. The writ petition is allowed. The matter is remitted back to the respondent No.2 to decide the objections in accordance with law considering

[2025:RJ-JP:6180-DB] (3 of 3) [CW-7463/2017] the law laid down by the Supreme Court in the case Gkn Driveshafts (India) Ltd. (supra) and the Division Bench of this Court in the case of Micro Marbles Pvt. Limited (supra). 7. In order to avoid further delay and complications, let the petitioner through his representative appear in the office of respondent No.2 on 12.03.2025 at 11:00 A.M. (PRAMIL KUMAR MATHUR),J (AVNEESH JHINGAN),J Monika/59 Whether Reportable: Yes

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