Assessment order quashed for not addressing objections properly.

The Court held that the assessment order was unsustainable as it was passed without addressing the petitioner's objection, contravening legal principles established in the GKN Driveshaft case. The order was quashed, and the matter remanded for the assessing officer to address the objection properly. Compliance with legal principles and proper disposal of objections before reassessment proceedings were emphasized.

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Issues:
Challenging an assessment order under Income Tax Act, 1961 for the assessment year 2014-15 based on violation of legal principles laid down by the Supreme Court in the case of GKN Driveshaft. Failure to dispose of the objection of the assessee against the notice under Section 148 before passing the assessment order.

Analysis:
The petitioner challenged the assessment order dated 31st March, 2022, under Section 147 read with Section 144B of the Income Tax Act, 1961, for the assessment year 2014-15, alleging a violation of the law established by the Hon'ble Supreme Court in the case of GKN Driveshaft. The impugned assessment order was based on a notice dated 31st March, 2021, under Section 148 of the Act. The petitioner had filed an objection to the notice on 8th July, 2021, emphasizing that the assessing officer must dispose of the objection before proceeding with the reassessment, as per the decision in the GKN Driveshaft case.

Mr. Mazumder, representing the petitioner, argued that passing a reassessment order without addressing the objection of the assessee against the notice under Section 148 is legally flawed and contravenes the principles laid down by the Supreme Court in the GKN Driveshaft case. He cited the Bombay High Court decision in IOT Infrastructure And Energy Services Ltd. case and the Madras High Court decision in M/s. Jayanthi Natarajan case to support this contention.

In response, Mr. Bhattacharji, representing the respondent income tax authority, failed to demonstrate that the objection raised by the petitioner was duly considered and disposed of before the assessment order was passed. The Court found this lack of proper consideration and disposal of the objection to be a clear violation of the legal principles set by the Supreme Court in the GKN Driveshaft case.

Consequently, the Court held that the impugned assessment order was unsustainable in law as it was passed without due consideration and disposal of the petitioner's objection. The order was quashed, and the matter was remanded back to the assessing officer to address the objection by passing a reasoned order after providing an opportunity for a hearing to the petitioner or its representatives. Further proceedings in the assessment process were directed to depend on the outcome of the objection, which must be duly considered and addressed in accordance with the law.

In conclusion, the writ petition challenging the assessment order was disposed of with the above observations and directions, emphasizing the necessity of complying with legal principles and ensuring proper disposal of objections before proceeding with reassessment proceedings.

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