Court quashes assessment order due to procedural flaw in not passing separate speaking order on objections.

The court quashed the impugned assessment order and allowed the writ petition, emphasizing the procedural flaw of the respondent's failure to pass a separate speaking order on objections to the reopening notice. The court highlighted the necessity of complying with the Supreme Court's decision in GKN Driveshafts, which mandates a separate speaking order for objections to reopening notices.

---

---

Issues Involved:
1. Validity of reopening the assessment under Section 147 of the Income Tax Act, 1961.
2. Requirement of a separate speaking order for objections to reopening.
3. Jurisdictional challenges and procedural compliance.
4. Availability of alternate remedies.

Issue-wise Detailed Analysis:

1. Validity of reopening the assessment under Section 147 of the Income Tax Act, 1961:
The petitioner challenged the reopening of the assessment for the year 2009-10, arguing that it was arbitrary, unjust, and illegal. The initial assessment was completed on 18.11.2011 under Section 143(3) of the Act. The reopening notice was issued on 30.03.2016 under Section 148, claiming income had escaped assessment. The petitioner contended that the reopening was based on a change of opinion and not new facts, which is not permissible. The petitioner had already declared the capital gains in the assessment year 2007-08 and paid the necessary taxes.

2. Requirement of a separate speaking order for objections to reopening:
The petitioner argued that the respondent failed to pass a separate speaking order on the objections to the reopening, as mandated by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO. The respondent, however, included the objections within the impugned assessment order. The court held that the procedure adopted by the respondent was flawed and vitiated the entire proceedings. The Supreme Court's decision in GKN Driveshafts requires that objections to the reopening must be disposed of by a separate speaking order to afford the assessee an opportunity to challenge it.

3. Jurisdictional challenges and procedural compliance:
The petitioner argued that the reopening was without jurisdiction, especially since more than four years had lapsed since the original assessment, and there was no failure to disclose material facts fully and truly. The court noted that the respondent's failure to pass a separate speaking order on the objections was a gross breach of natural justice principles. The court referenced several cases, including KSS Petron Private Ltd. and Sona Builders, to emphasize that non-compliance with procedural requirements renders the assessment order without jurisdiction.

4. Availability of alternate remedies:
The respondent argued that the petitioner had an alternate remedy of appealing against the assessment order and that the writ petition was not maintainable. The petitioner countered that the writ petition was maintainable as the assessment was without jurisdiction and in violation of the Supreme Court's decision in GKN Driveshafts. The court agreed with the petitioner, stating that the procedural flaw in not passing a separate speaking order vitiated the entire proceedings, making the writ petition maintainable.

Conclusion:
The court held that the respondent's failure to pass a separate speaking order on the objections to the reopening notice was a procedural flaw that vitiated the entire proceedings. The impugned assessment order was quashed, and the writ petition was allowed. The court emphasized the binding nature of the Supreme Court's decision in GKN Driveshafts, which requires a separate speaking order to be passed on objections to reopening notices.

---