Court Quashes Assessment Order; Orders Fresh Review of Petitioner's Objections with 3-Month Compliance.

The HC ruled in favor of the petitioner, issuing a Writ of Certiorari to quash the Assessment Order and consequential Demand Notice. The case was remitted to the respondent for fresh consideration, beginning with a review of the petitioner's objections. A compliance timeline of three months was established, with all contentions remaining open. No costs were awarded.

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Issues: Challenge to Assessment Order under Income Tax Act, Violation of Principles of Natural Justice, Availability of Alternate Remedy

The petitioner, an assessee, filed a writ petition challenging the Assessment Order dated 29.12.2018 for the Assessment Year 2013-14 made by the respondent under Section 143(3) r/w 147 of the Income Tax Act, 1961. The petitioner contended that the respondent failed to consider the objections raised before issuing the Assessment Order, alleging a violation of principles of natural justice. The respondent argued that the petitioner should pursue the alternate remedy of appeal instead of filing a writ petition.

After hearing both parties and examining the petition papers, the Court referred to the decision of the Apex Court in GKN DRIVESHAFTS (INDIA) LTD. V. INCOME-TAX OFFICER, (2003) 259 ITR 19 (SC). The Court noted that when a notice is issued under section 148, the noticee should file a return and, if desired, seek reasons for the notice. The Assessing Officer must provide reasons within a reasonable time, and upon receiving the reasons, the noticee can file objections. The Assessing Officer is then obligated to dispose of the objections through a speaking order before proceeding with the assessment.

In light of the above legal position, the Court found in favor of the petitioner. A Writ of Certiorari was issued, quashing the impugned Assessment Order and the consequential Demand Notice. The matter was remitted to the respondent for fresh consideration starting from the stage of reviewing the objections raised by the petitioner. A compliance timeline of three months was set, and all contentions of the parties were left open. No costs were awarded in the judgment.

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