The Supreme Court Has Set Out The Procedure For Reassessment In The Case Of Gkn Driveshafts (India) Ltd v. Income Tax Officer And Others (259 Itr 19) As Follows

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 17.02.2020 CORAM THE HONOURABLE Dr. JUSTICE ANITA SUMANTHW.P.Nos.3731, 3735, 3747 of 2020and WMP.Nos.4403, 4405, 4407, 4410, 4412, 4415, 4428, 4430 & 4431 of 2020 Indo Lloyd Freight Systems Pvt. Ltd.,Flat No.88, 8[th] Floor, BBC Villa,New No.65(33), Broadway Road,Chennai-600 108,Represented by its Director,Sudarshan K.Aithal.. Petitioner in all WPs Income Tax Officer,Corporate Ward 2(4),Wanaparthy Block, No.121,Mahatma Gandhi Road, Nungambakkam,Chennai-600 034... Respondent in all WPs Common Prayer in WP.Nos.3731 & 3735 of 2020:- Writ Petitionsfiled under Article 226 of the Constitution of India, prayingfor the issuance of a Writ of Certiorari, calling for the entirerecords of the Respondent contained in Notice dated 28.12.2019bearing No.ITBA/PNL/S/271B/2019-20/1023338281(1), under Section274 r/w Section 271B, and bearning No.ITBA/PNL/S/271(1)(c)/2019-20/1023337740(1) under Section 274 r/w S.271(1)(c) of the Actrespectively in respect of PAN: for AY 2013-14, andto quash the same as illegal, arbitrary and unjust. Prayer in WP.No.3747 of 2020:- Writ Petition filed underArticle 226 of the Constitution of India, praying for theissuance of a Writ of Certiorarified Mandamus, calling for theentire records of the Respondent contained impugned noticebearing No.ITBA/AST/S/148/2018-19/1015457693(1) dated 27.03.2019issued under Section 148 of the Income Tax Act, 1961 for PAN: for Assessment Year 2012-13 and all consequentialorders issued thereto, including the notice bearingNo.ITBA/PNL/S/271B/2019-20/1023335833(1) dated 28.12.2019 underSection 274 r/w Section 271B of the Act, and notice bearingNo.ITBA/PNL/S/271(1)(c)/2019-20/1023335141(1) dated 28.12.2019under Section 274 r/w 271(1)(c) of the Act by the Respondent andto quash the same as arbitrary, unjust and illegal and toconsequently forbear the Respondent or any of its superiors, https://hcservices.ecourts.gov.in/hcservices/ subordinates, agents or any other person claiming under or abovethe Respondent, from in any manner taking any steps to re-assessthe Petitioner's income for the assessment year 2012-13 underSection 147 of the Income Tax Act, 1961. For Respondent : Mrs.Hema Muralikrishnan Senior Standing Counsel COMMON ORDER Heard Mr.Suhrith Parthasaraathy, learned counsel appearingfor the petitioner and Mrs.Hema Muralikrishnan, learned SeniorStanding Counsel appearing for the respondent. 2.The petitioner challenges, in WP.No.3747 of 2020, a noticeunder Section 148 dated 27.03.2019 for assessment year (AY)2012-13 and all consequential orders and notices includingpenalty notices for that year. As far as Writ Petition No.3731of 2020 is concerned, the petitioner challenges penalty noticesunder Section 274 read with Section 271B dated 28.12.2019 for AY2013-14. Since the facts vary for each year, they are dealt withseparately. 3.As regards AY 2012-13, a notice under Section 148 dated27.03.2018 was received by the petitioner and return filed forthe first time on 26.04.2019. Thereafter, a notice under Section143(2) dated 30.08.2019 was issued by the respondent followed bya questionnaire under Section 142(1) dated 17.09.2019. Responseswere duly filed and there was exchange of communication back andforth between the petitioner and respondent. For the first timeon 02.11.2019, the petitioner sought the reasons for re-assessment. 4.The Supreme Court has set out the procedure for re-assessment in the case of GKN Driveshafts (India) Ltd. vs.Income Tax Officer and Others (259 ITR 19) as follows: 3.As regards AY 2012-13, a notice under Section 148 dated27.03.2018 was received by the petitioner and return filed forthe first time on 26.04.2019. Thereafter, a notice under Section143(2) dated 30.08.2019 was issued by the respondent followed bya questionnaire under Section 142(1) dated 17.09.2019. Responseswere duly filed and there was exchange of communication back andforth between the petitioner and respondent. For the first timeon 02.11.2019, the petitioner sought the reasons for re-assessment. 4.The Supreme Court has set out the procedure for re-assessment in the case of GKN Driveshafts (India) Ltd. vs.Income Tax Officer and Others (259 ITR 19) as follows: 4. We see no justifiable reason to interferewith the order under challenge. However, weclarify that when a notice under Section 148of the Income tax Act is issued, the propercourse of action for the noticee is to file re-turn and if he so desires, to seek reasons forissuing notices. The assessing officer is boundto furnish reasons within a reasonable time. Onreceipt of reasons, the noticee is entitled tofile objections to issuance of notice and the as-sessing officer is bound to dispose of the same by passing a speaking order. In the instant case,as the reasons have been disclosed in theseproceedings, the assessing officer has to disposeof the objections, if filed, by passing a speak-ing Order before proceeding with the assess-ment in respect of the abovesaid five assessmentyears. 5.Thus, when a notice under Section 148 is received, thepetitioner must file a return of income and then seek a copy ofthe reasons on the basis of which the re-opening was occasioned.In the present case, though the petitioner has filed a return noreasons were sought. The assessing authority proceeded to issuea notice under Section 143(2) as well as questionnaires callingfor information from the assessee. The assessee has also dulycomplied with the requests. It is for the first time on02.11.2019 that the petitioner has sought reasons. No doubt thisrequest has been ignored by the assessing authority who eventhereafter sought further information that was duly supplied bythe assessee. This has culminated an order of assessment, thathas not been uploaded in the online portal till date. The orderof assessment in hard copy appears to have been returned to theDepartment with the endorsement 'left', since the petitioner hasshifted its premises. 6.The learned Senior Standing Counsel circulatesInstructions issued by the Directorate of Income Tax (Systems)in relation to uploading of time barring assessment orders inthe following terms: 'Sub:- Passing of Time Barring AssessmentOrders through Manual Order UploadFunctionality in ITBA – reg. Kindly refer to the above. 2.For the T.B. date 31.12.2019 there would bemany Manual Order Upload cases, like, assessmentorder u/s 153A/153C/147 for the A. Yrs. 2016-17 and2017-18, set-aside cases, etc. for whichfunctionality in ITBA is still under development.3.In above cases the pendency has to be createdin ITBA. On completion of proceedings, order has tobe passed manually. After generation of DIN for therelevant manual order, the order has to be uploadedon the system with DIN and then it is sent to theCPC for accounting. On completion of accounting bythe CPC, its details are shared on the e-filingportal of the assessee.4.In some cases there may be mismatch in the dataof refund and/or challan shared by the AO throughmanual order upload and data of the same as per CPCand hence, the accounting may fail (error-out) at the end of CPC for such manual order. the end of CPC for such manual order. 5.In some computation result of manual orderpassed by the AO is different from the result of CPCaccounting and the AO is also satisfied with the CPCaccounting and the manual order has not beendispatched through any mode to the assessee, thenthe AO is advised to revise the computation sheetagain and send the revised (corrected) computaqtionsheet along with assessment order to the assessee. 6.In view of the approaching time barring date,and a large number of pendency with AOs, it wouldnot be advisable to ask AOs where the accounting ofmanual order uploaded is repeatedly errored out(fails) at the end of CPC to examine the reasons forsuch failure of accounting and send the AssessmentOrder with enclosures of Computation of Income andtax thereon only after reconciliation/correction asflagged by CPC. 7.Therefore, the AOs may be advised in erroredout cases discussed above, to pass the manual order,generate DIN from ITBA and after quoting DIN in theorder, etc. send the same manually to assessee bypost or otherwise. Then, the manual order passedshould be uploaded in the system for accounting bythe CPC. If after accounting, the net demand/refundis found to be different from the manually passedorder communicated to the assessee, the relevantorder may be rectified under the provisions of Act.8.The AOs may further be advised to upload therelevant assessment order through Assessment-Workitem only, so that, pending proceeding is closed inthe system and the demand created manually isproperly accounted in the system through manualorder functionality. It is pertinent to mention herethat any manual order uploaded through the CommonFunctions Module will not close the work-itemproceeding and the resultant demand/refund will notappear in the system. 9.Furthermore, in order to avoid generation ofmultiple DIN for the same order, the AOs may beadvised not to generate DIN from Common FunctionModule in place of Assessment Module – Manual Orderfunctionality for uploading of such manual order. 10. The issues with the approval of the Pr. DGIT(S).' 7.Thus the procedure followed by the revenue in time barringassessments is that while the order may not be uploadedimmediately, a DIN number is generated and the order ofassessment sent manually. In the present case, the DIN number appears to have been issued on 28.12.2019 and the assessmentorder in hard copy issued on the same date franked by the postoffice on 30.12.2019 and served upon the assessee on 02.01.2020,(though returned) with the endorsement 'left'. The assessmentorder, in original, is handed over to the learned counsel forthe petitioner. 8.Since the order has been received only now, the petitioneris given thirty (30) days from today to file a statutory appeal,if it is so desires. Recovery proceedings shall also commenceafter 30 days from today. The petitioner is directed to supplyforthwith its present address for communication to theDepartment. 9.As regards assessment year 2012-13, the petitioner has notsought reasons at all. It has however received the order ofassessment and is permitted to file an appeal challenging allaspects of the impugned order, within a period of thirty (30)days from today. 10.These writ petitions are disposed. No costs.Consequently, connected miscellaneous petitions are closed. s/d- Assistant Registrar(CS-III) True Copy Sub-Assistant Registrar To The Income Tax Officer,Corporate Ward 2(4),Wanaparthy Block, No.121,Mahatma Gandhi Road, Nungambakkam, Chennai-600 034. +1 CC to Mr. Arun Karthick Mohan, Advocate sr 14018+1 CC to Mrs. Hema Muralikrishnan, Advocate sr 13358. W.P.Nos.3731, 3735, 3747 of 2020and WMP.Nos.4403, 4405, 4407, 4410, 4412,4415, 4428, 4430 & 4431 of 2020 PVS(CO)SP(14/07/2020)