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High Court reviews Income Tax Act Section 148 notice procedure post GKN Driveshafts case The High Court considered a writ petition challenging a notice under Section 148 of the Income Tax Act, 1961, emphasizing the procedure for reassessment ...
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High Court reviews Income Tax Act Section 148 notice procedure post GKN Driveshafts case
The High Court considered a writ petition challenging a notice under Section 148 of the Income Tax Act, 1961, emphasizing the procedure for reassessment following the GKN Driveshafts case. The Court directed the assessing officer to provide reasons within a reasonable time, allowing the noticee to file objections to the assumption of jurisdiction. The assessing officer was instructed to dispose of objections before proceeding with assessment for the relevant years. The petitioner was granted the opportunity to file objections, and the respondent was directed to pass a re-assessment order after hearing the petitioner, leading to the disposal of the writ petition without costs.
Issues: Challenge to notice under Section 148 of the Income Tax Act, 1961 and show cause notice, reasons for re-assessment, procedure for reassessment, filing objections, assessment for the abovesaid five assessment years, filing return of income, seeking reasons for issuing notices, passing a speaking order, assumption of jurisdiction, hearing the petitioner, order of re-assessment.
The High Court considered a writ petition challenging a notice under Section 148 of the Income Tax Act, 1961, a show cause notice, and reasons for re-assessment. Referring to the Supreme Court case of GKN Driveshafts (India) Ltd. vs. Income Tax Officer and Others, the Court emphasized the procedure for reassessment. The Court clarified that upon receiving a notice under Section 148, the noticee should file a return and may seek reasons for the notice. The assessing officer must provide reasons within a reasonable time, and the noticee can then file objections, which should be disposed of by a speaking order. As the reasons were disclosed in the proceedings, the assessing officer was directed to dispose of any objections before proceeding with assessment for the five assessment years in question.
The petitioner had filed a return of income for the first time after receiving the notice under Section 148, without seeking reasons initially. The reasons for re-assessment were sought and furnished later. In line with the Supreme Court's procedure, the petitioner was allowed to file objections to the assumption of jurisdiction within two weeks. The respondent was directed to pass a separate order on the objections, communicate it to the petitioner, and then proceed with the assessment on merits. The Court ordered that after hearing the petitioner, a re-assessment order should be passed by the respondent in accordance with the law.
Consequently, the writ petition was disposed of in the mentioned terms, and connected miscellaneous petitions were closed without any order as to costs.
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