Prashant Projects Limited v. The Assistant Commissioner Ofincome Tax -10(3) And Other

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO. O. C. J. WRIT PETITION NO.65 OF 2010 Prashant Projects Limited..Petitioner. Vs. The Assistant Commissioner ofIncome Tax -10(3) and other..Respondents. .... Mr. R. Murlidharan with Mr. Atul K. Jasani for the Petitioner.Mr. B.M. Chatterji with Mr. Suresh Kumar for the Respondents. .... CORAM : DR. D.Y.CHANDRACHUD &J.P. DEVADHAR, JJ. P.C.: 2[nd] March, 2010. 1.Rule, returnable forthwith. By consent of the learned counsel and at their request the matter is taken up for hearing and final disposal. 2.The challenge in these proceedings is to the reopening of an assessment for Assessment Year 2002-03 by the issuance of a notice dated 25[th] March, 2009 under Section 148 of the Income Tax Act, 1961. The grievance of the assessee is that though detailed objections were filed to the proposed reopening of the assessment, the assessing officer failed to dispose of the objections by passing a reasoned order n thereon in terms of the law laid down by the Supreme Court iG.K.N. Drive Shaft (India) Ltd. v. Income Tax Officer[1]. Accordingly it has been submitted that the assessing officer had committed an act of illegality in passing an order of assessment without dealing with the objections of the assessee and passing a reasoned order thereon. 3.During the course of the hearing of these proceedings, counsel appearing on behalf of the Revenue has fairly stated on instructions of the assessing officer who is present in the Court that the directions contained in the judgment of the Supreme Court in G.K.N. Drive Shaft (supra) were not complied with. In our view, there is absolutely no reason or justification for the assessing officer not to deal with the objections filed by the assessee to the reopening of the assessment particularly in view of the binding principle of law laid down by the Supreme Court in that regard. In the circumstances, during the course of the hearing, we have suggested to the learned counsel that it would be appropriate for this Court to set aside the 1259 ITR 19 (SC). order of reassessment and the noting by the assessing officer dated 10[th] November, 2009 disposing of the objections and to remit the proceedings back to the assessing officer. Counsel appearing on behalf of the assessee has no objection thereto. 4.In the circumstances, the Petition shall stand disposed of in the following terms :the following terms : i) The order of reassessment dated 30[th] November, 2009 and the order issued by a noting dated 10[th] November, 2009 disposing of the objections of the assessee are quashed and set aside;order issued by a noting dated 10[th] November, 2009 disposing of the objections of the assessee are quashed and set aside;ii) The assessing officer shall pass a fresh order on the objections raised by the assessee to the proposed reassessment within a period of four weeks from today after furnishing an opportunity of being heard to the assessee and serve a copy of the said order upon the Petitioner;raised by the assessee to the proposed reassessment within a period of four weeks from today after furnishing an opportunity of being heard to the assessee and serve a copy of the said order upon the Petitioner; iii) In the event that an order adverse to the assessee is passed, effect shall not be given to the order for a period of four weeks thereafter to enable the assessee to seek recourse to its remedies effect shall not be given to the order for a period of four weeks thereafter to enable the assessee to seek recourse to its remedies against the order; iv)If within the period specified in clause (iii) above, the order passed as per clause (ii) above is not stayed by a Court and there is no order restraining the assessing officer from passing a reassessment order, the assessing officer would be at liberty to reassessment order, the assessing officer would be at liberty to iii) In the event that an order adverse to the assessee is passed, effect shall not be given to the order for a period of four weeks thereafter to enable the assessee to seek recourse to its remedies effect shall not be given to the order for a period of four weeks thereafter to enable the assessee to seek recourse to its remedies against the order; iv)If within the period specified in clause (iii) above, the order passed as per clause (ii) above is not stayed by a Court and there is no order restraining the assessing officer from passing a reassessment order, the assessing officer would be at liberty to reassessment order, the assessing officer would be at liberty to to pass an order of reassessment within a period of two weeks from the expiry of the period set out in clause (iii) above;from the expiry of the period set out in clause (iii) above; v) In order to facilitate completion of the entire exercise set out herein above and for a period of ten weeks from today, the notice dated 25[th] March, 2009 shall remain stayed;herein above and for a period of ten weeks from today, the notice dated 25[th] March, 2009 shall remain stayed; vi)All the rights and contentions of the parties are kept open and this order shall not be constructed as the expression of any opinion by the Court on the merits of the rival contentions.opinion by the Court on the merits of the rival contentions. The Petition is accordingly disposed of. There shall be no order as to costs. (Dr. D.Y.Chandrachud, J.) (J.P. Devadhar, J.)