2013 (2) TMI 599 - HC - Income Tax

Court overturns order due to lack of consideration of objections under Income Tax Act. Assessing officer must engage with objections.

The court set aside the order dated 28.01.2013 due to lack of proper application of mind by the respondent in considering objections raised by the ... Reopening of assessment - assessee filed written submission against it - Held that:- Going through the order of reassessment it is seen that it has been passed without any application of mind. To say the least, it is a cut-and-paste job. This is apparent from the fact that the paragraph 3 is merely a repetition of the provisions of section 147 and 148 of the said Act. The respondent has not even bothered to change the words such as “we”, “us”, etc. which the petitioner had used in its objections/ reply. This shows that the respondent had not even applied his mind and not even bothered to correct the contents of paragraph 2 so as to put it into second person or third person in the grammatic sense. Thus such an order cannot be permitted to stand as it smacks of non-application of mind. The assessing officer has to apply his mind to the objections raised and has to deal with the objections in the order. The matter is remitted to the respondent to pass a fresh order after taking into account the objections filed by the petitioner as also after giving the petitioner an opportunity of hearing - in favour of assessee by way of remand. Issues:1. Validity of notice issued under section 148 of the Income Tax Act, 1961 for assessment year 2007-08.2. Rejection of objections raised by the petitioner regarding the proposed reopening of assessment.3. Lack of application of mind in passing the order dated 28.01.2013 by the respondent.Issue 1: Validity of Notice under Section 148:The judgment addresses the challenge against the notice dated 30.08.2011 issued under section 148 of the Income Tax Act, 1961 for the assessment year 2007-08. The court notes that the order rejecting the objections raised by the petitioner was deemed to be a 'cut-and-paste job' without proper application of mind. The court observed that the order lacked substance as it mainly comprised repetitive legal provisions and generic paragraphs that could apply to any case. The court emphasized the importance of the assessing officer applying their mind to the objections raised by the assessee, which was found lacking in this instance. Consequently, the order dated 28.01.2013 was set aside, and the matter was remitted to the respondent for a fresh order considering the objections and providing the petitioner with a hearing opportunity within three weeks.Issue 2: Rejection of Objections for Reopening of Assessment:The judgment highlights the failure of the respondent to address the points raised by the petitioner in their objections regarding the proposed reopening of the assessment. The court noted that significant portions of the objections submitted by the petitioner were copied verbatim in the order without any modification, indicating a lack of application of mind by the respondent. The court stressed that passing an order on objections is not merely a formality but requires a thorough consideration of the arguments presented by the assessee. As the order in question did not fulfill this requirement, it was set aside, and the respondent was directed to pass a fresh order after considering the objections and providing the petitioner with a hearing opportunity.Issue 3: Lack of Application of Mind in Passing the Order:The judgment criticizes the order dated 28.01.2013 for being a mere repetition of legal provisions and generic paragraphs, indicating a lack of application of mind by the respondent. The court emphasized that the assessing officer must engage with the objections raised by the assessee and provide a reasoned order addressing those objections. Since the order in question failed to meet this standard, it was deemed unacceptable, and the matter was remitted to the respondent for a fresh order that considers the objections raised by the petitioner and allows for a hearing opportunity. The court refrained from commenting on the merits of the petition regarding the validity of the notice dated 30.08.2011, keeping that issue open for future consideration.This comprehensive analysis of the judgment delves into the issues surrounding the validity of the notice, rejection of objections, and the lack of application of mind in passing the order. The court's emphasis on the importance of a reasoned and considered approach in addressing objections and passing orders is evident throughout the judgment, ensuring a fair and just process in matters of tax assessment.