AI Drafter 
TaxTMI 
TaxTMI 
2004 (8) TMI 97
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.... as the amount was paid for acquisition of assets out of the cash credit facility enjoyed by the petitioner. After scrutiny of the said return on the dates mentioned in the petition, the respondent-Assessing Officer passed an order under section 16(3) of the Act on March 8, 2000. It is averred in the petition that due to a query raised on November 26, 2001, by the A.G. audit party, the respondent as well as the Joint Commissioner of Wealth-tax, Special Range-1, Ahmedabad, called for an explanation from the petitioner and the petitioner submitted an explanation. On February 19, 2002, the respondent once again called for further details which were duly supplied. However, on March 26, 2002, the impugned notice under section 17 of the Act came to be issued and the same was served on the petitioner on April 1, 2002. The petitioner raised various objections in law as well as on the facts vide letters dated April 1, 2002, and April 9, 2002, requesting the respondent to drop the proceedings as the same were without jurisdiction. In the alternative, it was submitted that the reasons recorded by the respondent may be supplied to the petitioner. It appears that the respondent simultaneo....
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....equired to be quashed and set aside. It was submitted that the notice issued under section 17 of the Act is without jurisdiction. The reassessment order dated February 9, 2004, is also bad in law not only as a consequence of such notice which is without jurisdiction but also for the reason that the same is passed ignoring the order of the apex court in the case of GKN Driveshafts (India) Ltd. [2003] 259 ITR 19 as well as the order of this court dated March 3, 2004, made in Special Civil Application No. 2736 of 2004 (Arvind Mills Ltd. v. CWT (Asst.)(No.1) [2004] 270 ITR 467). It was submitted that the petitioner had challenged the impugned notice by a writ petition being Special Civil Application No. 2736 of 2004 (Arvind Mills Ltd. v. CWT (Asst.) (No.1) [2004] 270 ITR 467) which came to be rejected in the light of the directions issued by this court in its order dated March 3, 2004. That the respondent had failed to take into consideration the directions issued by this court and even on this count the impugned notice and the reassessment orders were required to be held to be without jurisdiction. Mr. Tanvish U. Bhatt, learned standing counsel appearing on behalf of the respondent....
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.... addressed in the reassessment order itself and that has been done under a bona fide belief. In the case of GKN Driveshafts [2003] 259 ITR 19, the hon'ble Supreme Court has laid down an elaborate procedure as to the manner of dealing with objections raised against a notice under section 148 of the Income-tax Act, 1961, in the following words: "However, we clarify that when a notice under section 148 of the Income-tax Act is issued, the proper course of action for the noticee is to file a return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years." In a subsequent decision in the case of Garden Finance Ltd. v. CIT (Asst.) [2004] 268 ITR 48 (Guj), the effect of the ....
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....king order, before proceeding with the assessment in respect of the assessment year for which such notice has been issued. Therefore, the stand of the respondents will have to be tested on application of the aforesaid legal principles. It is apparent from the facts which have come on record that the assessee had been demanding reasons in relation to the notice under section 17 of the Act dated March 26, 2002, but the same came to be supplied to the petitioner only by letter dated January 28, 2004. Immediately thereupon, the petitioner raised preliminary objections vide communication dated February 3, 2004. However, without dealing with and disposing of the said objections by passing a speaking order, the respondent proceeded to pass the impugned reassessment order on the merits of the controversy. Once the apex court had stated that the Assessing Officer was bound to dispose of the objections by passing a speaking order, it was not open to the respondent to contend that, in the absence of any provision, the respondent could not have passed a speaking order. Accordingly, on this limited count, the impugned reassessment order dated February 9, 2004, is required to be quashed and s....
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....d of in the reassessment order itself" is not borne out from the facts and a bare reading of the impugned reassessment order. There is one more aspect of the matter. The order dated March 3, 2004, made by this court in the earlier petition filed by the present petitioner, namely, Special Civil Application No. 2736 of 2004 (Arvind Mills Ltd. v. CWT (Asst.) (No. 1) [2004] 270 ITR 467) directed the respondent to dispose of the objections filed by the petitioner by passing a speaking order as per the aforesaid decision of the hon'ble Supreme Court. It is further laid down in the said order that it is only after the Assessing Officer passes a speaking order deciding the petitioner's preliminary objections against the notice for reassessment that any cause of action would arise for the petitioner. This order was served on the respondent, on March 4, 2004, and immediately on March 5, 2004, the petitioner was served with a copy of the impugned reassessment order dated February 9, 2004. The petitioner thereupon preferred a rectification application under section 35 of the Act requesting the respondent to withdraw the impugned reassessment order dated February 9, 2004, but, as averred in ....