Court orders assessing officer to issue speaking order within 3 weeks on objections. Assessment proceedings on hold.

The court directed the assessing officer to pass a speaking order on the objections raised by the petitioner within three weeks, in compliance with the GKN Driveshafts principle. The assessment proceedings were to be kept in abeyance until the speaking order was issued, as per the court's directive. The writ petition and related miscellaneous petition were disposed of, with no costs awarded in the matter.

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Issues:
Challenge to notice dated 19.01.2021 under Section 148 of IT Act for assessment year 2018-19 based on GKN Driveshafts principle.

Analysis:
The main issue in this case pertains to the challenge against a notice dated 19.01.2021 under Section 148 of the Income Tax Act for the assessment year 2018-19, focusing on the application of the GKN Driveshafts principle. The petitioner filed the original return of income for the said assessment year on 26.10.2015, and subsequent events including an intimation under Section 143(1) of the IT Act, a survey under Section 133A, and the retraction of a statement given during the survey, led to the issuance of the impugned notice on 19.01.2021. The petitioner filed objections to the reasons for reopening, prompting the assessing officer to issue further notices under Section 143(2) and proceed with reassessment.

The petitioner's counsel, relying on the GKN Driveshafts principle laid down by the Hon'ble Supreme Court, argued that the assessing officer had not completed all four stages of the principle, specifically the final stage of passing a speaking order on the objections raised by the petitioner. The Revenue Counsel acknowledged that while there was no infirmity in the impugned notice, the failure to complete the final stage of the GKN Driveshafts principle warranted intervention.

Referring to the GKN Driveshafts case, the court highlighted the importance of completing all stages of the principle, emphasizing that the assessing officer must pass a speaking order after considering the objections raised by the assessee. In the present case, it was evident that all stages of the principle had been completed except for the final stage of passing a speaking order on the petitioner's objections. Therefore, the court directed the assessing officer to comply with the GKN Driveshafts principle and pass a speaking order on the objections within three weeks from the date of the judgment.

Consequently, the court disposed of the writ petition and related miscellaneous petition with the directive for the assessing officer to keep the assessment proceedings in abeyance until the speaking order is issued, ensuring compliance with the principles laid down in the GKN Driveshafts case. No costs were awarded in this matter.

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