Court dismisses challenge to Income Tax Act notice for assessment reopening, stresses procedural compliance.

The High Court dismissed the writ petition challenging a notice issued under Section 148 of the Income Tax Act for reopening the assessment. The court found the petition premature as objections were not submitted before challenging the notice. Emphasizing the procedural requirements for reopening assessments, the court directed the petitioner to submit objections within 30 days. The Assessing Officer was instructed to consider the objections and pass a speaking order, enabling the petitioner to seek remedies under the Income Tax Act. The court rejected the relief sought, highlighting that reasons for reopening assessments cannot be tested based on factual averments in a counter affidavit.

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Issues involved:
Challenge to notice under Section 148 of the Income Tax Act for reopening assessment for AY 2011-12.

Analysis:
The petitioner filed a writ petition seeking to quash a notice dated 10.02.2015 issued by the first respondent under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2011-12. The notice was based on the belief that income chargeable to tax had escaped assessment due to donations made to a trust alleged to be bogus. The petitioner requested reasons for reopening, which were provided on 13.05.2015. The petitioner then approached the court challenging the notice. The court noted that the Assessing Officer must follow a specific procedure when intending to reopen an assessment, including recording reasons in writing, furnishing them to the assessee, allowing time for objections, passing a speaking order, and communicating it to the assessee. As the petitioner challenged the notice before submitting objections, the court found the petition premature and directed the petitioner to submit objections within 30 days, after which the Assessing Officer would consider them and pass a speaking order, enabling the petitioner to seek remedies under the Income Tax Act.

The court emphasized that the correctness of reasons for reopening could not be tested based on factual averments in the counter affidavit. The court also clarified that the decision of the Income Tax Appellate Tribunal in a similar case could not be directly applied to the present case, especially since the appeal pertained to regular assessment proceedings. Therefore, the court held that the writ petition was premature and rejected the relief sought by the petitioner, directing them to submit objections within the specified timeframe. The Assessing Officer was instructed to consider the objections independently and pass a speaking order, allowing the petitioner to pursue remedies under the Income Tax Act based on the outcome.

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