TaxTMI 
TaxTMI 
2024 (10) TMI 1699
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.... the re-assessment order passed by the AO dated 31.03.2022. 2. Both the parties agreed that first we should take up ITA No.1171/Chny/2024 i.e. the re-assessment order passed by the AO dated 31.03.2022 u/s.147/143(3) of the Act for AY 2016-17. 3. At the outset, the Ld. Sr. Counsel for the assessee, Shri Percy Pardiwalla submitted that assessee is challenging, inter alia, reopening/re-assessment for AY 2016-17 on the legal issue/ground that the AO failed to abide by the binding directions given by the Hon'ble Supreme Court in the case of M/s. GKN Driveshafts (India) Ltd., v. ITO reported in [2003] 259 ITR 19 (SC). According to the Ld. Sr. Counsel, the Hon'ble Supreme Court in M/s. GKN Driveshafts (India) Ltd. (supra) has laid down the mandatory Rule to be followed by the Assessing Officer [AO] that after a notice u/s.148 of the Act has been issued by him, the assessee needs to file a return pursuant to such a notice; and if the assessee seek reason for issuing such notice, the AO is bound to furnish reasons for reopening the assessment, within a reasonable time; and on receipt of reasons, the assessee is entitled to file objections [against issuance of re-opening notice] and in....
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....d to follow the binding direction of Hon'ble Apex Court (supra) and brought to our notice that AO issued notice u/s.148 of the Act on 30.03.2021 and pursuant to it, the assessee filed return of income on 23.04.2021 and sought reasons for issuance of notice (re-opening the assessment) and the AO furnished reasons on 06.05.2021 and pursuant to that, on 15.06.2021, the assessee filed its objections against the impugned reopening; and the AO without bothering to dispose of the objections, passed the re-assessment order on 31.03.2022, which action/omission on the part of the AO, according to Ld Sr Counsel is in violation of the binding order of the Hon'ble Supreme Court in G.K.N. Driveshats (India) Ltd. (supra) and thus vitiates the re-assessment order passed by the AO dated 31.03.2022. The Ld. Sr. Counsel pointed out in this context that the AO without disposing of the objections raised by the assessee on 15.06.2021, had intriguingly dealt with the objections against the reopening of assessment in the body of re-assessment order dated 31.03.2022, which action of the AO, according to the Ld. Sr. Counsel was in gross-defiance to the binding direction of the Hon'ble Supreme Court (supra) ....
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....objections as laid down by the Hon'ble Supreme Court in the case of M/s. GKN Driveshafts (India) Ltd. (supra) and in addition to such a request, also prayed before the AO to dispose off the objections at least four (4) weeks before framing of re-assessment order as held by the Hon'ble Bombay High Court in the case of Asian Paints Limited v. DCIT & anr. (2008) 296 ITR 90 (Bom) and also in the case of Bharat Jayantilal Patel v. UOI reported in [2015] 378 ITR 596 (Bom.), which fact we find from perusal of Page No.86 of the Paper Book. Thus, according to the Ld. Sr. Counsel, it can be noted that the decision of the Hon'ble Madras High Court in the case of Home Finders Housing Ltd. (order dated 25.04.2018), is distinguishable on the facts and not applicable to the present case, whereas, the Hon'ble Madras High Court decision in the case of Pentafour Software Employees' Welfare Foundation (order dated 05.08.2019) and Janak Shanthilal Mehta (order dated 16.12.2020) are the latest decisions, wherein, it was has held that non-compliance with the binding directions of the Hon'ble Supreme Court in the case of M/s. GKN Driveshafts (India) Ltd.(supra), would vitiate the re-opening and conse....
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....f the Act on 27.12.2018 determining the assessed income at Rs.633,26,12,050/-. Thereafter, impugned notice u/s.148 of the Act was issued by AO and served on the assessee on 30.03.2021. Pursuant to which, the assessee filed its return of income on 23.04.2021 and requested the AO for copy of the reasons recorded for re-opening of assessment vide letter dated 23.04.2021. The AO furnished a copy of the reasons recorded on 06.05.2021 (refer Page Nos.53-60 of Paper Book); and the assessee objected to the re-opening by letter dated 15.06.2021 (refer Page No.63-86 of Paper Book); and it is noted that the assessee while objecting to the action of AO to re-open the assessment (vide letter dated 15.06.2021) had prayed to the AO (i) in the light of the objections, the AO may either drop the re-opening of assessment proceedings since no new tangible material was available on record to form reason to believe that income has escaped assessment and asserted that the proposed exercise of re-opening can be termed as mere 'change of opinion' and (ii) also pleaded that in the event, if the AO doesn't accept the plea raised by it to drop the proceedings, the AO may pass speaking order disposing the obj....
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....and facilitate at least four (4) weeks time before re-assessment order is framed, so that assessee may prefer filing of Writ Petition before the Hon'ble jurisdictional High Court against the re-opening of assessment. It is noted that the Hon'ble Bombay High Court in the case of Bharat Jayantilal Patel (supra) had an occasion to examine such an omission on the part of the AO who failed to give four (4) weeks time (before passing re-assessment order) as directed in Asian Paints Ltd. (supra) and the Hon'ble Bombay High Court was pleased to quash the re-opening/re-assessment order. In this context, it would be gainful to refer to the decision the Hon'ble Bombay High Court in the case of Asian Paints Ltd., wherein, their Lordships held as under:- 1. Heard learned Counsel for the petitioner and the respondent. Rule, returnable forthwith. By consent all the petitions are taken up for final hearing. 2. In all the above petitions, it is a case regarding reopening of the assessment order under Section 148 of the Income-tax Act. In all the above cases, the petitioners have filed their respective objections on January 15, 2007, with regard to reopening of the assessment. ....
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....er on 12th March, 2015 and pointed out that the communication dated 5th March, 2015 was received on 12th March, 2015, but no speaking order has been passed rejecting the objections and which is required by the law laid down in the case of GKN Driveshaft (India) Ltd. V/s. Income Tax Officer reported in (2003) 259 ITR 19 and Asian Paints Ltd. V/s. Deputy Commissioner of Income Tax & Anr. reported in (2009) 308 ITR 195 (Bom). The petitioner specifically invited the attention of the assessing officer to the directions in the case of Asian Paints (supra) and to the effect that if the assessing officer does not accept the objections to the reopening of the assessment or the reasons recorded, he shall not proceed further in the matter within a period of four weeks from the date of receipt or service of the said order on the assessee. Since the order dated 5th March, 2015 is stated to be rejecting the objections, then, the assessee prayed that for a period of four weeks from that order, no steps should be taken. 23. However, as has been rightly contended by Mr. Pardiwalla, ignoring this mandate in the decisions of this Court and the Hon'ble Supreme Court which has been further....
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....oners, the amount of interest being not liable to tax, the Land Acquisition Collector was not justified in deducting the tax at source. The issue is no more res Integra in view of same pronouncement of the Supreme Court in Bikram Singh v. Land Acquisition Collector [1997] 224 ITR 551, wherein their Lordships have held that such an amount of interest on delayed payment of compensation determined under the Land Acquisition Act was a revenue receipt exigible to income-tax under Section 4 of the Act. However, the claimant would be entitled to spread over the income for the period for which payment came to be made, so as to compute the income for assessing tax for the relevant accounting year. In view of the law so laid down the petitioner is not entitled to the relief prayed for. However, learned counsel for the petitioner relied on Satinder Singh v. Umrao Singh,, to submit that compensation would not be treated as income. Learned counsel further submitted that the decision of the Supreme Court in Satinder Singh's case was not brought to the notice of the Supreme Court when Bikram Singh's case [1997] 224 ITR 551, was decided. It is also submitted that the reas....