Failure to pass speaking order on objections violates legal requirements; Court quashes assessment order.

The High Court held that the Assessing Officer's failure to pass a speaking order on objections raised by the petitioner post receiving reasons for intended assessment reopening was a violation. The Court emphasized the necessity for a speaking order as per legal requirements. Finding the absence of reasons for rejecting objections and inadequate addressing of objections in the notice, the Court dismissed the argument of alternative remedy and quashed the assessment order. The Court directed the respondents to pass a speaking order on the objections filed by the petitioners in compliance with the law.

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Issues Involved:
Challenge to refusal of Assessing Officer to pass a speaking order on objections raised by petitioner after filing return and obtaining reasons for intended reopening of assessment under section 148 of Income-tax Act, 1961.

Analysis:
1. The petitioner challenged the Assessing Officer's refusal to pass a speaking order on objections raised post receiving reasons for intended assessment reopening. The petitioner's counsel argued that objections were raised, but no speaking order was issued, leading to subsequent proceedings being vitiated.

2. The respondents' counsel contended that the assessment order was already passed, suggesting the petitioners could challenge it before the Tribunal. They argued that objections raised by petitioners were not formal objections but mere submissions, and the Assessing Officer's notice under section 142 rejected all objections.

3. The High Court referred to the Supreme Court's ruling in GKN Driveshafts case, emphasizing the necessity for the Assessing Officer to pass a speaking order on objections raised by the assessee. The Court noted the absence of a speaking order in the present case, highlighting the legal and factual objections raised by the petitioners regarding the intended assessment reopening.

4. The Court found no reasons recorded by the Assessing Officer for rejecting the objections, and the recitals in the notice under section 142 did not adequately address the specific objections raised. The Court dismissed the respondents' argument of alternate remedy, stating that the failure to issue a speaking order vitiated the subsequent proceedings, warranting the quashing of the assessment order.

5. Citing the Andhra Pradesh High Court's judgment in Kohinoor Hatcheries case, the Court rejected the contention of availability of alternative remedy due to the Assessing Officer's actions being without jurisdiction and in defiance of statutory provisions. The Court ruled to quash the assessment order and directed the respondents to pass a speaking order on the objections filed by the petitioners in accordance with the law.

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