2019 (1) TMI 1954 - HC - Income Tax

Court upholds validity of notice under Section 148 for assessment re-opening, emphasizes need to challenge reasons to question. Assessment order valid; pursue statutory appeal.

M/s. Hanon Automotive Systems India Private Limited (previously known as M/s. Visteon Automotive Systems India Pvt. Ltd.) Versus The Deputy Commissioner of Income Tax Corporate Circle-2 (2), The Principal Commissioner of Income Tax-2, Chennai.

M/s. Hanon Automotive Systems India Private Limited (previously known as M/s. Visteon Automotive Systems India Pvt. Ltd.) Versus The Deputy Commissioner ... Issues:1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 for re-opening the assessment.2. Legality of the assessment order passed under Section 143(3) r/w 147 of the Income Tax Act.3. Failure to file objections to the reasons for re-opening the assessment.Analysis:Issue 1: Validity of notice under Section 148The petitioner challenged the notice issued under Section 148 of the Income Tax Act, 1961, dated 23.03.2018, for re-opening the assessment relevant to the assessment year 2011-2012. The Assessing Officer provided the reasons for re-opening through a communication dated 10.10.2018, to which the petitioner did not file any objections. The court noted that in the absence of objections from the assessee, the Assessing Officer was justified in passing the consequential assessment order dated 07.12.2018 under Section 143(3) r/w 147 of the IT Act, 1961. The court emphasized that failure to challenge the reasons for re-opening before the Assessing Officer barred the petitioner from questioning the re-opening through a writ petition.Issue 2: Legality of the assessment orderThe petitioner argued that the assessment order should be set aside as the reasons for re-opening were based on materials already available during the original assessment. However, the court held that since the petitioner did not object to the reasons provided by the Assessing Officer, the assessment order passed under Section 143(3) r/w 147 of the IT Act, 1961, was valid. The court clarified that challenging the merits of the assessment should be done through a regular statutory appeal, not a writ petition.Issue 3: Failure to file objectionsThe court highlighted that the petitioner's failure to file objections to the reasons for re-opening the assessment prevented them from questioning the re-opening in the writ petition. The court directed the petitioner to pursue the matter through a statutory appeal before the Appellate Authority within four weeks from the date of the court's order. The court specified that the Appellate Authority should consider the appeal on its merits and in accordance with the law, without being constrained by the period of limitation.In conclusion, the court disposed of both writ petitions, granting the petitioner the liberty to file a statutory appeal before the Appellate Authority within a specified period. The court emphasized the importance of following the statutory appeal process for challenging the assessment, rather than resorting to writ petitions without raising objections at the appropriate stage.