Natural Justice: lack of reasonable window after objections' rejection vitiated reassessment; orders set aside for two assessment years.

Reassessment orders were set aside because the Assessing Officer denied a reasonable opportunity after rejecting the assessee's objections: reasons were furnished and objections were disposed of, but the rejection order was served on 25-03-2014 and the assessment order was passed on 26-03-2014, permitting no time to seek remedies. The tribunal applied the requirement to furnish reasons and dispose objections by a speaking order and the binding requirement of a reasonable window after service before final assessment, and quashed the reassessments for the two impugned years.

---

---

Issues: Whether the reassessment orders for assessment years 2008-09 and 2009-10 are bad in law on the ground that (i) objections filed by the assessee against reopening were not disposed of and (ii) the Assessing Officer passed the assessment orders in violation of the time window required after disposal of objections.

Analysis: The Court examined the sequence of events following issuance of notice under Section 148 of the Income-tax Act, 1961, including the assessee's request for reasons, supply of reasons, filing of objections, disposal of objections by the Assessing Officer, service of the order on objections and the immediate passing of the assessment order. The Court applied the principles in GKN Driveshafts (requiring reasons to be furnished and objections to be disposed of by a speaking order) and the binding directions of the Jurisdictional High Court in Asian Paints and Aroni Commercials (requiring a reasonable window, specifically four weeks, after service of the order rejecting objections before passing the assessment order). The record showed that objections were decided on 21-03-2014, served on 25-03-2014, and the assessment order was passed on 26-03-2014, allowing no time for the assessee to avail remedies; thus the Assessing Officer violated the timeline and principles of natural justice.

Conclusion: The reassessment orders for assessment years 2008-09 and 2009-10 are set aside for violation of the time window and principles of natural justice; the Revenue appeals are dismissed and the order of the Commissioner of Income Tax (Appeals) upholding that relief is sustained in favour of the assessee.

---