Rajeev Sadh v. Income Tax Officer, Ward 58(7), Delhi And Anr

$~6 IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 6113/2022 & CM APPLs.18449-18450/2022 RAJEEV SADH ..... Petitioner Through:Mr. Talha Abdul Rahman withMr. Shaz Khan and Mr. HarshVardhan Kediya, Advocates. versus INCOME TAX OFFICER, WARD 58(7), DELHI AND ANR ..... Respondents Through:Mr. Shailendra Singh, Advocate.%Date of Decision: 28[th]April, 2022 CORAM: HON'BLE MR. JUSTICE MANMOHANHON'BLE MR. JUSTICE SUBRAMONIUM PRASAD J U D G M E N T MANMOHAN, J (Oral): 1.Present writ petition has been filed challenging the notice dated 30[th]March, 2021 issued under Section 148 of the Income Tax Act, 1961 (forshort ‘the Act’), assessment order, demand notice and penalty notice dated31[st]March, 2022 for the Assessment Year 2017-18. 2.Learned counsel for the Petitioner states that the objections dated 17[th]March, 2022 in response to reasons to believe dated 15[th]March, 2022 wereduly lodged on the portal; but the respondents have till date not adjudicatedupon the same and have proceeded straightway to issue show cause noticefor variation on 25[th]March, 2022 and have issued notice of demand dated Signature Not Verified 31[st]March, 2022. 3.On the last date of hearing, learned counsel for the respondents hadtaken time to obtain instructions. Today, learned counsel for the respondentsadmits that the objections dated 17[th]March, 2022 were not disposed of bythe respondents. He, however, states that enough opportunity had beengranted to the petitioner to present its case. Consequently, according to himnon-disposal of the objections dated 17[th]March, 2022 was inconsequent. 4.Having heard learned counsel for the parties, this Court is of the viewthat the issue raised in the present writ petition is no longer res integra. TheSupreme Court in GKN Driveshafts (India) Ltd. vs. Income Tax Officer and Ors., (2003) 1 SCC 72 has held as under:- “5. We see no justifiable reason to interfere with theorder under challenge. However, we clarify that when anotice under Section 148 of the Income Tax Act is issued,the proper course of action for the noticee is to file returnand if he so desires, to seek reasons for issuing notices.The assessing officer is bound to furnish reasons within areasonable time. On receipt of reasons, the noticee isentitled to file objections to issuance of notice and theassessing officer is bound to dispose of the same bypassing a speaking order. In the instant case, as thereasons have been disclosed in these proceedings, theassessing officer has to dispose of the objections, if filed,by passing a speaking order, before proceeding with theassessment in respect of the abovesaid five assessmentyears.”order under challenge. However, we clarify that when anotice under Section 148 of the Income Tax Act is issued,the proper course of action for the noticee is to file returnand if he so desires, to seek reasons for issuing notices.The assessing officer is bound to furnish reasons within areasonable time. On receipt of reasons, the noticee isentitled to file objections to issuance of notice and theassessing officer is bound to dispose of the same bypassing a speaking order. In the instant case, as thereasons have been disclosed in these proceedings, theassessing officer has to dispose of the objections, if filed,by passing a speaking order, before proceeding with theassessment in respect of the abovesaid five assessmentyears.” 5.Since in the present case, the objections were filed by the petitioner,this Court is of the view that the respondents were duly bound to decide thesame before proceeding further in the matter. Signature Not Verified 6.Accordingly, the impugned assessment order and demand notice aswell as penalty notice dated 31[st]March, 2022 for the Assessment Year 2017-18 are set aside and the matter is remanded back to the Assessing Officer todecide the objections dated 17[th]March, 2022 in accordance with law withineight weeks. 7.With the aforesaid direction, the present writ petition and applicationsstand disposed of. 5.Since in the present case, the objections were filed by the petitioner,this Court is of the view that the respondents were duly bound to decide thesame before proceeding further in the matter. Signature Not Verified 6.Accordingly, the impugned assessment order and demand notice aswell as penalty notice dated 31[st]March, 2022 for the Assessment Year 2017-18 are set aside and the matter is remanded back to the Assessing Officer todecide the objections dated 17[th]March, 2022 in accordance with law withineight weeks. 7.With the aforesaid direction, the present writ petition and applicationsstand disposed of. MANMOHAN, J SUBRAMONIUM PRASAD, J APRIL 28, 2022AS