Bombay H.C : 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 against the order

High Court Of Bombay

IOT Infrastructure & Energy Services Ltd. vs. Assistant Commissioner Of Income Tax & Anr.

Section 147, 148, Art. 226

Asst. Year 2004-05

Dr. D.Y. Chandrachud & J.P. Devadhar, JJ.

Writ Petn. No. 60 of 2010

2nd March, 2010

Counsel Appeared :

R. Murlidharan with Atul K. Jasani, for the Petitioner : B.M. Chatterji with Suresh Kumar, for the Respondents

JUDGMENT

BY THE COURT :

Rule, returnable forthwith. By consent of the learned counsel and at their request the matter is taken up for hearing and final disposal.

In the present case the challenge under Art. 226 of the Constitution is to the reopening of an assessment for asst. yr. 2004-05. The notice for reopening the assessment was issued on 16th March, 2009 and the reasons in support of the notice are dt. 18th June, 2009. On 18th Dec., 2009, the assessee lodged its objections to the reopening of the assessment stating that a copy of the letter dt. 18th June, 2009 had been handed over only on 16th Dec., 2009. An order of assessment was passed on 23rd Dec., 2009. The grievance of the assessee is that the AO has not complied with the directions of the Supreme Court in GKN Driveshafts (India) Ltd. vs. ITO & Ors. (2003) 179 CTR (SC) 11 : (2003) 259 ITR 19 (SC).

During the course of the hearing of these proceedings, counsel appearing on behalf of the Revenue has fairly stated on instructions of the AO who is present in the Court that the directions contained in the judgment of the Supreme Court in GKN Driveshafts (India) Ltd. (supra) were not complied with. In our view, there is absolutely no reason or justification for the AO 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 order of reassessment dt. 23rd Dec., 2009 and the noting by the AO dt. 21st Dec., 2009 disposing of the objections and to remit the proceedings back to the AO. Counsel appearing on behalf of the assessee has no objection thereto.

In the circumstances, the petition shall stand disposed of in the following terms :

(i) The order of reassessment dt. 23rd Dec., 2009 and the order issued by a noting dt. 21st Dec., 2009 disposing of the objections of the assessee are quashed and set aside;

(ii) The AO 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;

(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 against the order;

(iv) If within the period specified in cl. (iii) above, the order passed as per cl. (ii) above is not stayed by a Court and there is no order restraining the AO from passing a reassessment order, the AO would be at liberty to pass an order of reassessment within a period of two weeks from the expiry of the period set out in cl. (iii) above;

(v) In order to facilitate completion of the entire exercise set out herein above, for a period of ten weeks from today, the notice dt. 16th 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.

The petition is accordingly disposed of. There shall be no order as to costs.

[Citation : 329 ITR 547]