DRUVA DATA SOLUTIONS PRIVATE LIMITED vs. INCOME TAX OFFICER WARD 1(1) PUNE AND ANR

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WP/3002/2022HC BombayHCBM01009538202213 April 2022Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE SHRI JUSTICE N. R. BORKAR3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court accepted the explanation provided by the revenue regarding the reasons for reopening the assessment. However, the Court observed that the revenue's conduct in issuing further notices under Section 142(1) after the petitioner pointed out erroneous reasons was unacceptable. The Court directed the petitioner to file objections to the notice dated March 28, 2021, issued under Section 148 of the Income Tax Act within four weeks. The Jurisdictional Assessing Officer (JAO) was mandated to dispose of these objections within four weeks thereafter. Crucially, the JAO must grant a personal hearing at least seven days in advance and provide a list of any judgments or orders to be relied upon, allowing the petitioner to respond. The order on objections must be reasoned and address all submissions. The time spent from filing the writ petition until the disposal of objections is to be excluded for computing the limitation period for assessment proceedings. The Court explicitly stated that no observations were made on the merits of the case.

What were the facts?

The petitioner, Druva Data Solutions Private Limited, filed a writ petition challenging the actions of the Income Tax Officer, Ward 1(1) Pune. The revenue filed two affidavits explaining the issuance of reasons for reopening and a subsequent notice under Section 142(1). The Court noted that the revenue issued further notices despite the petitioner pointing out erroneous reasons, which was deemed unacceptable conduct. The Court directed the petitioner to file objections to the notice dated March 28, 2021, issued under Section 148 of the Income Tax Act within four weeks of the order being uploaded. The Jurisdictional Assessing Officer (JAO) was directed to dispose of these objections within four weeks thereafter, granting a personal hearing at least seven days in advance and providing a list of judgments to be relied upon.

What were the issues?

1. Whether the issuance of further notices by the revenue, specifically under Section 142(1) of the Income Tax Act, was appropriate when the petitioner had brought erroneous reasons to their notice, and what is the procedural impropriety, if any, in such actions (mixed question of fact and law). Assessee's Contention: The petitioner argued that the revenue's conduct in issuing further notices without resolving the initial erroneous reasons was unacceptable. The petitioner sought a proper procedure for addressing objections. Revenue's Contention: The revenue filed affidavits explaining the issuance of reasons and subsequent notices. The Court accepted the explanation regarding the reasons for reopening.

Which sections of the Income-tax Act were involved?

Section 142(1),Section 148

AI-generated summary — verify with the full judgment below

949-cwp-3002-22.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 3002 OF 2022

Druva Data Solutions Private Limited … Petitioner V/s. Income Tax Ofcer Ward 1 (1) Pune and anr.

… Respondents ---------------- Mr. Jitendra Amresh Singh for the Petitioner. Mr. Suresh Kumar for the Respondents. ----------------

CORAM : K.R. SHRIRAM &

N.R. BORKAR, JJ. DATE : APRIL 13, 2022. P.C. 1] Pursuant to the directions issued by this Court on 16.03.2022, two afdavits have been fled by the revenue, viz. one through Maddila Venugopal Naidu, afrmed on 25.03.2022, who has issued notice as well as the reasons recorded and another through Prashant Gadekar, afrmed on 25.03.2022. Both these ofcers have explained how the reasons, copy whereof is annexed to the petition at Exhibit-F came to be issued. We accept the explanation. 2] We have to observe that notwithstanding the petitioner bringing to the notice of revenue about erroneous reasons Dinesh Sherla 1/3 DINESH SADANAND SHERLA Digitally signed by DINESH SADANAND SHERLA Date: 2022.04.16 12:40:04 +0500

949-cwp-3002-22.doc provided, revenue has proceeded to issue further notice under section 142(1) copy whereof is also annexed to the petition at Exhibit-H. Revenue, in our view, should not have issued notices but should have frst attempted to resolve the problem. To that extent, the conduct of Ofcers is unacceptable. 3] Be that as it may, now, that petitioner has been provided the reasons for re-opening alongwith afdavit of Maddila Venugopal Naidu, petitioner is directed to fle its objections to the notice dated 28th March, 2021 issued under Section 148 of the Act within four weeks of this order being uploaded. 4] The Jurisdictional Assessing Ofcer (JAO) shall dispose the objections within four weeks thereafter. But before disposing, a personal hearing shall be granted, the date of which shall be communicated at least seven days in advance and if the JAO is going to rely on any judgment/order passed by any court or Tribunal, a list thereof shall be provided alongwith the notice for personal hearing. Petitioner shall be Dinesh Sherla 2/3

949-cwp-3002-22.doc permitted to deal with/distinguish the judgments relied upon by the JAO. The order on objections shall be a reasoned one and shall deal with every submissions made by petitioner with reasons. 5] The time spent from the date of fling the Writ Petition till disposal and the time granted for disposal of objections is to be excluded while computing the period of limitation for completion of the assessment proceeding. 6] We clarify that we have not made any observations on the merits of the case. 7] Petition disposed.

(N.R. BORKAR, J.) (K.R. SHRIRAM, J.) Dinesh Sherla 3/3

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