M/S MINDTREE LIMITED vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

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WP/63236/2016HC KarnatakaKAHC01047716201624 April 2018Bench: S.SUJATHA4 pages
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What did the High Court hold?

The High Court held that passing an assessment order without disposing of objections filed pursuant to a Section 148 notice is untenable. Consequently, the impugned assessment order and demand notice were set aside.

What were the facts?

The petitioner challenged an assessment order and demand notice for AY 2009-10. The primary contention was that the Assessing Officer failed to dispose of the petitioner's objections filed after a Section 148 notice before passing the reassessment order.

What were the issues?

Whether the reassessment order passed without disposing of objections filed under Section 148 is valid. The procedural requirement of disposing of objections prior to passing a reassessment order.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 148,Section 156

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF APRIL, 2018 BEFORE: THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.63236/2016 (T – IT) BETWEEN:

M/S MINDTREE LIMITED GLOBAL VILLAGE CAMPUS, MYLASANDRA VILLAGE, RVCE POST, OFF MYSORE ROAD, BENGALURU-560 059 (REPRESENTED BY ITS CHIEF FINANCIAL OFFICER, SRI.JAGANNATHAN CHAKRAVARTHI, S/O SRI NARASIMHAN C.K.AGED ABOUT 43 YEARS. ... PETITIONER

(BY SRI CHYTHANYA.K.K, ADV.)

AND

THE ASSISTANT COMMISSIONER OF INCOME TAX LARGE TAX PAYER UNIT (LTU), CIRCLE-1, 100 FEET RING ROAD, BANASHANKARI III STAGE, BENGALURU-560 085. ... RESPONDENT

(BY SRI E.I.SANMATHI, ADV. FOR SRI.K V ARAVIND, ADV.)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTIONL OF INDIA PRAYING TO QUASH AS FAR AS THE PETITIONER IS CONCERNED BY AN APPROPRIATE WRIT OR IN THE NATURE OF CERTIORARI OR OTHERWISE, THE IMPUGNED ORDER PASSED BY THE ASSESSEMENT YEAR 2009-10 UNDER SECTION 147 READ WITH SECTION 143[3] OF

- 2 - THE IT ACT DTD:8.11.2016 THE SAME IS ENCLOSED AS ANNEXURE-A AND ETC.

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

O R D E R

Petitioner has challenged the order passed under Section 147 r/w 143(3) of the Income-tax Act, 1961 (‘Act’ for short), as well as the demand notice issued under Section 156 of the Act relating to the assessment year 2009-10.

2.

The main argument of the learned counsel appearing for the petitioner is that objections filed by the petitioner pursuant to the notice issued under Section 148 of the Act has not been disposed of by the respondent-Authority prior to passing of the impugned reassessment order by passing a speaking order which is mandatory in terms of the Judgment of the Hon’ble Apex Court in the case of GKN Driveshafts (India) Ltd. –v- Income tax Officer reported in (2003) 259 ITR 19 (SC). Learned counsel also placed reliance on the order

- 3 - of this Court in W.P.No.4679/2018 reported in 2018- TIOL -691- HC-KAR-IT.

3.

Learned counsel appearing for the respondent do not dispute the same.

4.

In W.P.No.4679/2018 this court placing reliance on the Division Bench Judgment of this court in the case of M/s Deepak Extrusions Pvt. Ltd. –v- The Deputy Commissioner of Income Tax in W.A.No.1725/2017 (DD 15.3.2017) reported in (2017) TIOL-607-HC- Karnataka-IT has held that passing of the assessment order sans disposing of the objections raised subsequent to issuance of the notice under Section 148 of the Act is untenable and accordingly, the impugned assessment order as well as the demand notice are set-aside.

5.

In view of the aforesaid, impugned assessment order at Annexure-A as well as the demand notice at

- 4 - Annexure-B cannot be sustained and are accordingly set-aside. Accordingly, the writ petition is allowed. However, it is observed that the Assessing officer shall be at liberty to proceed with the matter in accordance with law.

All rights and contentions of the parties are left open.

Sd/- JUDGE

ln.

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