MRS KANCHAN AGARWAL vs. THE INCOME TAX OFFICER

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WP/2456/2019HC KarnatakaKAHC01001882201925 April 2019Bench: S.SUJATHA6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the respondent Assessing Officer had proceeded to conclude the reassessment in a hasty manner. The petitioner requested the reasons for reopening on 20.12.2018, which were furnished on 24.12.2018, and the preliminary objections were filed on 27.12.2018. The Court observed that the AO ought to have provided some 'breathing time' for the petitioner to furnish objections before concluding the reassessment. The fact that the reassessment order was passed on the same day the reasons were furnished, and before the objections were filed, rendered the order unjustifiable. The preliminary objections filed by the petitioner remained unconsidered. Consequently, the impugned reassessment order and demand notice were set aside. The proceedings were restored to the file of the respondent-Assessing Officer to redo the assessment after considering the preliminary objections filed by the petitioner and to conclude the assessment expeditiously, preferably within eight weeks.

What were the facts?

The petitioner, Mrs. Kanchan Agarwal, filed a writ petition challenging a reassessment order passed by the Income Tax Officer (ITO) under Section 143(3) read with Section 147 of the Income Tax Act, 1961, for Assessment Year 2013-14, and the consequential demand notice. The petitioner had filed her return of income on 31.07.2013. The assessment was concluded under Section 143(3) read with Section 147. Subsequently, a notice under Section 148 was issued to reopen the assessment. The petitioner requested reasons for reopening on 20.12.2018, which were provided on 24.12.2018. The petitioner filed preliminary objections on 27.12.2018, but the reassessment proceedings were concluded by the ITO on 24.12.2018, allegedly without considering these objections.

What were the issues?

1. Whether the reassessment order passed by the respondent under Section 143(3) read with Section 147 of the Income Tax Act, 1961, for Assessment Year 2013-14 is valid, considering that the petitioner's preliminary objections to the reasons for reopening were allegedly not considered. Assessee's Contention: The petitioner argued that the reassessment order is invalid because the Assessing Officer (AO) proceeded to conclude the reassessment without providing sufficient opportunity to file objections and without considering the preliminary objections filed on 27.12.2018. The AO passed the order on 24.12.2018, which was prior to the filing of objections. Revenue's Contention: The revenue contended that the reassessment order was passed on 24.12.2018, prior to the petitioner submitting preliminary objections on 27.12.2018. They further submitted that reasons for reopening were made available to the petitioner three times, and no objections were filed until after the reassessment order was passed, thus finding no fault with the impugned order.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF APRIL, 2019 BEFORE: THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.2456/2019 (T – IT) BETWEEN:

Mrs. KANCHAN AGARWAL W/O Mr. NATWAR AGARWAL AGED ABOUT 38 YEARS, R/AT LAXMI ROAD, 8TH CROSS, SHANTI NAGAR BANGALORE-560 027

…PETITIONER

(BY SRI HARISH V.S., ADV.)

AND:

THE INCOME TAX OFFICER WARD 7 (2) (2), 3RD FLOOR, ROOM NO.320, BMTC BUILDING, KORAMANGALA 80 FEET ROAD, BANGALORE-560 095 …RESPONDENT

(BY SRI E.I.SANMATHI, ADV.)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER OF REASSESSMENT PASSED BY THE RESPONDENT UNDER SECTION 143(3) R/W SECTION 147 OF THE ACT, RELEVANT TO THE ASSESSMENT YEAR 2013-14, DATED NIL i.e., ANNEXURE-F AND THE CONSEQUENTIAL DEMAND NOTICE ISSUED BY THE RESPONDENT, RELEVANT TO THE ASSESSMENT YEAR 2013-14, DATED 24.12.2018 i.e., ANNEXURE-G.

THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:-

O R D E R

The petitioner has challenged the re-assessment order passed by the respondent under Section 143(3) read with Section 147 of the Income Tax Act, 1961 (for short ‘the Act’) relating to the Assessment Year 2013-14 and consequential demand notice issued by the respondent.

2.

The petitioner has filed return of income on 31.07.2013 relating to the Assessment Year 2013-14. The assessment proceedings were concluded under Section 143(3) read with Section 147 of the Act for the Assessment Year in question. Subsequently notice was issued under Section 148 of the Act to reopen the assessment concluded. On the request made by the petitioner to furnish the reasons for reopening the assessment under Section 148 of the Act on 20.12.2018, reasons recorded were made available to the petitioner on 24.12.2018. Accordingly, preliminary

3 objections and explanations were filed by the petitioner on 27.12.2018.

However, the re-assessment proceedings were concluded by the respondent on 24.12.2018. It is the grievance of the petitioner that no sufficient opportunity was provided to him to file the objections to the reasons recorded. The Assessing Officer proceeded to conclude the re-assessment proceedings without considering the preliminary objections filed on 27.12.2018. It is submitted that the re-assessment order impugned is not valid in the eye of law for passing the same sans disposing of the preliminary objections.

3.

Learned counsel for the revenue justifying the impugned order submitted that re-assessment order was passed on 24.12.2018 prior to the preliminary objections submitted by the petitioner on 27.12.2018. It was further submitted that reasons recorded by the Assessing Officer for reopening the assessment under

4 Section 148 of the Act was made available to the petitioner on three times despite the same, no objections were filed. It is after passing of the re- assessment order on 24.12.2018 preliminary objections has been filed by the assessee. Hence, no fault can be found with the order impugned herein.

4.

I have carefully considered the rival submissions of the learned counsel appearing for the parties and perused the material on record.

5.

As could be seen from the records the petitioner has requested the Assessing Officer to furnish the reasons recorded for reopening the assessment related to the Assessment Year in question on 20.12.2018. The same has been furnished on 24.12.2018 and the preliminary objections were filed on 27.12.2018. If that being the position, the Assessing Officer ought to have provided some breathing time to the petitioner to furnish the objections and then to have

5 proceeded to conclude the re-assessment. On the day of furnishing the reasons recorded, the re-assessment order is said to have been passed. However, the copy of the re-assessment order made available before the court at Annexure-F to the writ petition does not bear the date of order.

6.

In such circumstances, this court is of the considered view that the respondent Assessing Officer has proceeded to conclude the re-assessment in a hasty manner. The preliminary objections filed by the petitioner on 27.12.2018 remains unconsidered as such, the re-assessment order cannot be held to be justifiable.

7.

Accordingly, the impugned re-assessment order at Annexure-F and the demand notice at Annexure-G are set-aside. The proceedings are restored to the file of the respondent-Assessing Officer to redo the assessment considering the preliminary objections

6 filed by the petitioner to the reasons recorded by the respondent as per Annexure-E to the writ petition dated 27.12.2018 and conclude the assessment thereafter in accordance with law in an expedite manner preferably within a period of eight weeks from the date of receipt of the certified copy of the order.

With the aforesaid observations and directions, writ petition stands disposed off.

Sd/- JUDGE

Chs* CT-HR

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