2018 (5) TMI 260

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.... Conspectus of facts:- 2. The appellant is a real estate promoter. The appellant filed its return of income for the assessment year 2012-13. It was a nil income return. The assessment order for the assessment year 2012-13 was passed on 23 March 2015. 3. The Assessing Officer was of the view that the income chargeable to tax has escaped assessment for the assessment year 2012-13. The Assessing Officer therefore decided to invoke Section 147 of the I.T. Act and issued notice dated 16 October 2015 under Section 148 of the I.T. Act to the assessee. The Assessing Officer pursuant to the request made by the appellant, furnished reasons for invoking Section 147 of the I.T. Act. The appellant on receipt of reasons, submitted objections. The Assessing Officer without giving disposal to the objections, proceeded to hear the matter and ultimately passed the assessment order on 30 December 2016. 4. The appellant challenged the assessment order before the writ court in W.P.No.1019 of 2017 on the ground that by not passing a specific order after receiving objections and before the Assessment order, the Assessing Officer violated the law declared by the Hon'ble Supreme Court in GKN D....

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....ded that the order taking a view contrary to the view already taken by a Coordinate Bench is per incurium. Discussion:- 7. The Assessing Officer invoked Section 147 of the I.T. Act as he has reason to believe that the income chargeable to tax has escaped assessment for the assessment year 2012-13. Therefore, notice under Section 148 of the I.T. Act was issued. 8. The Income Tax Officer on receipt of request from the appellant, furnished reasons for invoking Section 147 of the I.T. Act. 9. There is no statutory requirement to deal with the objections given by the assessee after receiving reasons for initiating proceedings under Section 147 of the I.T. Act. However, there is a judgment of the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. mandating such disposal of objections before passing the assessment order. 10. The Supreme Court in GKN Driveshafts (India) Ltd. made it clear that 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 a speaking order. The judgment is very clear that before proceeding with the assessment proceedings, the Assessing Officer has to ....

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....he assessee after receiving the reasons for invoking Section 147 of the I.T. Act. The Hon'ble Supreme Court in GKN Driveshafts (India) Ltd., has given a procedural safeguard to the assessee to avoid unnecessary harassment by directing the Assessing Officer to pass a speaking order taking into account the objections for reopening the assessment under Section 147 of the I.T. Act. 17. The forming of opinion to proceed further by disposal of the objections need not be a detailed consideration of all the facts and law applicable. It must show application of mind to the objections raised by the noticee. In case the objections are such that it would require a detailed examination of facts and application of legal provisions, taking into account the assessment order sought to be reopened, the string of violations, suppression of material particulars and transactions which would require considerable time and would be in the nature of a detailed adjudicatory process, the Assessing Officer can dispose of the objections, by giving his tentative reasons for overruling the objections. 18. The disposal of objections is in the value of a procedural requirement to appraise the assessee of....

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.... the notice to the assessee was posted on 24 May 1993. Though there were five days left to pass the order, within the period of limitation, two days were Saturday and Sunday. The Supreme Court on the facts and circumstances of the case quashed the proceedings without remitting it for passing fresh orders. The learned Single Judge was therefore not correct in quoting Sona Builders for giving an indication that in case there is a procedural irregularity, it would vitiate the entire proceedings. 24. In case an order is passed without following a prescribed procedure, the entire proceedings would not be vitiated. It would still be possible for the authority to proceed further after complying with the particular procedure. 25. The enactments like the Land Acquisition Act, 1894, contain mandatory provisions like Section 5A, the non compliance of which would vitiate the declaration under Section 6 of the Act. Even after quashing the declaration for non compliance of Section 5A, the Court would permit the conduct of enquiry and pass a fresh declaration within the period of limitation. 26. We therefore make the position clear that non compliance of the procedure indicated in the GK....