GLORIOUS VINCOM PVT LTD vs. UNION OF INDIA

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WPA/22936/2022HC CalcuttaWBCHCA045995202228 November 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the impugned order passed under Section 147 read with Section 144B of the Income Tax Act, 1961, was bad in law because the petitioner's objection to the initiation of proceedings under Section 147 and the issuance of notice under Section 148 had neither been considered nor rejected. The Court found the petitioner's contention to be substantially correct. Consequently, the Tribunal set aside the impugned order and all subsequent proceedings. The matter was remanded back to the Assessing Officer to pass a fresh speaking order in accordance with the law, after providing the petitioner an opportunity of hearing. The Court directed that any further proceedings would depend on the outcome of the order to be passed on the petitioner's objection. The ratio is that an assessment order passed under Section 147 without considering the assessee's objections to the reopening notice is invalid.

What were the facts?

The petitioner, Glorious Vincom Pvt. Ltd., filed a writ petition challenging an order dated March 29, 2022, passed under Section 147 read with Section 144B of the Income Tax Act, 1961, for assessment year 2015-16. The petitioner contended that this order, along with subsequent proceedings, was invalid because their objection dated March 25, 2022, filed after receiving the Assessing Officer's reasons, was not considered or disposed of. The petitioner cited the Supreme Court's decision in GKN Driveshafts (India) and a Calcutta High Court judgment in Saroj Jalan Vs. Union of India. The Court found the petitioner's allegation to be substantially correct.

What were the issues?

1. Whether the impugned order passed under Section 147 read with Section 144B of the Income Tax Act, 1961, is bad in law for failing to consider and dispose of the petitioner's objection filed against the initiation of proceedings under Section 147 and issuance of notice under Section 148 of the Act. Assessee's Contention: The petitioner argued that the impugned order and subsequent proceedings are illegal because their objection, filed after receiving the recorded reasons, was not considered or disposed of by the Assessing Officer. They relied on the Supreme Court's judgment in GKN Driveshafts (India) and the Calcutta High Court's decision in Saroj Jalan Vs. Union of India. Revenue's Contention: The judgment does not record any specific arguments made by the respondent revenue.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148

AI-generated summary — verify with the full judgment below

28.11.2022. p.b. Sl. No.15. WPA 22936 of 2022 Glorious Vincom Pvt. Ltd. Vs. Union of India & Ors. Mr. Avra Mazumder, Mr. Binayak Gupta. ……..for the petitioner. Mr. Tilak Mitra. ……..for the respondent. Heard learned advocates appearing for the parties. By this writ petition, petitioner has challenged the impugned order under Section 147 read with Section 144B of the Income Tax Act, 1961 dated 29th March, 2022 relating to assessment year 2015-16 that the same has been passed without considering and disposing the objection of the petitioner dated 25th March, 2022 filed after receiving the recorded reason furnished by the Assessing Officer concerned. Petitioner submits that the aforesaid impugned order and subsequent order and proceedings are bad in law in view of the law laid down by the Hon’ble Supreme Court in the case of GKN Driveshafts (India) and petitioner also relies on a reported judgment of this Court in the case of Saroj Jalan Vs. Union of India reported in (2022) 143 taxmann.com 33 (Calcutta). On perusal of the aforesaid impugned order, I find that the

2 allegation of the petitioner is substantially correct in the sense that petitioner’s objection to initiation of proceeding under Section 147 and issuance of notice under Section 148 of the Act has neither been considered nor rejected. Considering the facts and circumstances of this case and submission of the parties, I am inclined to set aside the aforesaid impugned order under Section 147 read with Section 144B of the Income Tax Act, 1961 and subsequent proceedings thereafter and the matter is remanded back to the Assessing Officer concerned to pass a fresh speaking order in accordance with law after giving an opportunity of hearing to the petitioner or his authorized representatives within 8 weeks from the date of communication of this order. Any subsequent proceeding in the matter will depend upon the final outcome of the order to be passed on the aforesaid objection of the petitioner against the notice under Section 148 of the Act. With this observation and direction, this writ petition being WPA 22936 of 2022 stands disposed of. (Md. Nizamuddin, J.)

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