ASSESSING OFFICER HAS TO DISPOSE OF OBJECTIONS

Assessing officer has to dispose of objections against reason recorded before proceeding with reassessment

Section 147, read with section 148, of the Income-tax Act, 1961 – Income escaping assessment

Before proceeding with assessment in case of reassessment, Assessing Officer is under a mandate to dispose of preliminary objections raised by assessee against reasons recorded for reopening

[2015] 59 taxmann.com 328 -HIGH COURT OF GUJARAT -Banaskantha District Oil seeds Growers Co-op. Union Ltd. v. Assistant Commissioner of Income-tax

FACTS

The assessee a co-operative society was engaged in the business of processing of oil seeds and trading of oil. The assessee filed the return of income for the relevant year declaring total loss of Rs. 87.95 lakhs that the case was selected for scrutiny under section 143(3).

The Assessing Officer finalized the assessment and passed the assessment order. Within a period of four years from the end of relevant year, the Assessing Officer issued the notice to reopen the assessment. On the request made by the assessee, the Assessing Officer communicated the assessee the reasons recorded for reopening the assessment immediately thereafter the assessee submitted the detailed objection against reopening of the assessment. The Assessing Officer did not disposed of the said objections earlier and disposed of the said objections simultaneously while passing the assessment order.

On Appeal , It was held by High Court

The notice under section 148 to reopen the assessment was issued by the Assessing Officer as far as back on 26-2-2014. That thereafter on the request made by the assessee, the Assessing Officer communicated the petitioner-assessee the reasons recorded for reopening of the assessment. That immediately thereafter the petitioner submitted the detailed objections against reopening of the assessment on 11-6-2014.

For the reasons best known to the Assessing Officer, the Assessing Officer did not dispose of the said objections earlier and has dealt with and disposed of the said objections simultaneously while passing the assessment order dated 20-3-2015.

It is required to be noted that between the objections raised on 11-6-2014 and the order of assessment dated 20-3-2015, there was sufficient time with the Assessing Officer to deal with and dispose of the objections i.e. approximately 9 months.

That the Assessing Officer has dealt with and disposed of the objections raised by the petitioner, simultaneously while passing the impugned order of assessment dated 15-3-2015 and that too by passing a non-speaking order.

In view of the binding decisions of the Supreme Court as well as Full Bench and Division Bench of this Court, the impugned order of assessment cannot be sustained.

As observed herein above though the detailed objections were raised against reopening of the assessment on 11-6-2014, the Assessing Officer did not disposed of the same till the assessment order came to be passed under section 143(3), read with section 147 and has dealt with and disposed of the objections simultaneously while passing the assessment order and that too by a non-speaking order.

The Assessing Officer is not only under a mandate to dispose of such preliminary objections before proceeding with the assessment, even the Assessing Officer is under a mandate to dispose of such preliminary objections by passing a speaking order.

Under the circumstances, the impugned assessment order cannot be sustained and the matter is remanded to the Assessing Officer by directing the Assessing Officer to pass a speaking order and to dispose of the objections raised by the petitioner against reopening of the assessment and/or against reasons recorded for reopening of the assessment and thereafter to communicate the outcome of the same to the petitioner and after giving reasonable time to the petitioner to challenge the same before higher Court/Forum, may proceed further with the assessment in respect of the assessment for which such notice has been issued.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: singh@carajput.com or call at 9555555480