MADHU BIYANI vs. INCOME TAX OFFICER

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CW/15837/2015HC RajasthanRJHC02059791201508 February 2024Author: AVNEESH JHINGAN,SHUBHA MEHTA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that while the impugned order noted the petitioner's objection regarding the reassessment proceedings being time-barred, it failed to consider and decide this specific objection. The Court reiterated the principle laid down in G.K.N Driveshafts (India) Ltd. that the Assessing Officer is duty-bound to pass a speaking order after considering all objections filed by the assessee. Since the impugned order did not fulfill this requirement, it was set aside. The matter was remitted back to the respondent (Assessing Officer) to proceed in accordance with the law, implying that the objections, including the one concerning the time-bar, should be properly considered and decided by a speaking order before proceeding with the assessment. No specific finding was given on the merits of the time-bar issue itself, as it was remitted for fresh consideration.

What were the facts?

The petitioner, Madhu Biyani, filed a writ petition challenging an order dated 04.06.2015 by the Income Tax Officer, Ward-3(1), Jaipur. This order rejected the petitioner's objections filed against the reopening of assessment proceedings under Section 147/148 of the Income Tax Act, 1961. A show-cause notice under Section 148 was issued on 21.03.2015. The petitioner filed objections, primarily arguing that the proceedings were time-barred and that there was no prior approval from the competent authority for the notice. The Assessing Officer rejected these objections, leading to the present petition. An interim order was in operation during the pendency of the writ petition.

What were the issues?

1. Whether the reassessment proceedings initiated against the petitioner are time-barred, as per Section 147/148 of the Income Tax Act, 1961? 2. Whether the Assessing Officer properly considered and decided the objections filed by the petitioner, including the objection regarding the proceedings being time-barred, in a speaking order as mandated by the Supreme Court in G.K.N Driveshafts (India) Ltd. vs. Income Tax Officer & Ors.? Assessee's Contentions: The petitioner argued that the reassessment proceedings were time-barred and that the Assessing Officer failed to consider and decide this specific objection in the impugned order. The petitioner relied on the Supreme Court's decision in G.K.N Driveshafts (India) Ltd. for the principle that objections must be disposed of by a speaking order. Revenue's Contentions: The learned counsel for the respondent defended the impugned order.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 15837/2015 Madhu Biyani, Plot No.8, D.K. Nagar, Khatipura Road, Jhotwara, Jaipur. ----Petitioner Versus Income Tax Officer, Ward-3(1), Jaipur, N.C.R. Building, Statue Circle, Jaipur. ----Respondent For Petitioner(s) : Mr. Gunjan Pathak with Mr. Kanishk Singhal Mr. Aditya Bohra Ms. Priyanshi Roongta For Respondent(s) : Mr. Anuroop Singhi HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MRS. JUSTICE SHUBHA MEHTA

Order Reportable 08/02/2024 Avneesh Jhingan, J (Oral):-

1.

This petition is filed seeking quashing of order dated 04.06.2015 rejecting the objections filed for reopening of the case under Section 147/148 of the Income Tax Act, 1961 (for short ‘Act of 1961’).

2.

The petitioner was issued show-cause notice (for short ‘SCN’) on 21.03.2015 under Section 148 of Act of 1961. The petitioner after filing return and in consonance with the decision of the Supreme Court in the case of G.K.N Driveshafts (India) Ltd. vs. Income Tax Officer & Ors. reported in 259 ITR page 19, after getting reasons from the Assessing Officer, filed the objections.

(2 of 3) [CW-15837/2015] Mainly two objections were raised, firstly that the proceedings are time barred, secondly that there was no prior approval from the competent authority for issuance of SCN. The objections were rejected vide order dated 04.06.2015, hence the present petition. It would be relevant to note that during pendency of the writ petition, interim order was in operation.

3.

Inter alia the grievance raised in the petition that the objection with regard to the proceeding being time barred has not been considered and decided.

4.

Learned counsel for the respondent defends the impugned order.

5.

Before proceeding further, relevant para of G.K.N Driveshafts(supra) is quoted below:- “We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years.”

6.

From perusal of the impugned order, it is forthcoming that though the objections raised by the petitioner that reassessment proceedings are time barred, has been noted but not considered and decided. The Assessing Officer was duty bound to pass

(3 of 3) [CW-15837/2015] speaking order after considering the objections filed by the petitioner. Consequently, the impugned order is set aside and the matter is remitted back to respondent No.1 to proceed in accordance with law. (SHUBHA MEHTA),J (AVNEESH JHINGAN),J Simple Kumawat /35

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