Case Note & Summary
The petitioner, Capgemini India Pvt. Ltd., challenged a notice under Section 148 of the Income Tax Act, 1961, and the subsequent reassessment order dated 27 February 2015. The High Court had earlier, on 21 April 2015, drawn the respondents' attention to the requirement under the decisions in Asian Paints v. DCIT and GKN Driveshafts (India) Ltd. v. ITO that the order rejecting objections must be communicated and the assessee must be given four weeks to approach the court before finalizing the reassessment. Despite this, the respondents proceeded to pass the reassessment order on 27 February 2015 without waiting for four weeks after communicating the order rejecting objections. The court found that the respondents had not followed the prescribed procedure and had acted in violation of the principles of natural justice. The court set aside the reassessment order and the order rejecting objections, and directed the respondents to redo the reassessment in accordance with law, after giving the petitioner a reasonable opportunity of being heard. The court also noted that the respondents had been adopting a similar course in several matters, which was not acceptable.
Headnote
A) Income Tax - Reassessment - Section 148, Income Tax Act, 1961 - Duty to Communicate Order Rejecting Objections - The Assessing Officer must communicate the order disposing of objections before proceeding with reassessment, and must wait for four weeks thereafter. Failure to do so vitiates the reassessment order. (Paras 4-5) B) Income Tax - Reassessment - Section 148, Income Tax Act, 1961 - Compliance with GKN Driveshafts - The procedure laid down in GKN Driveshafts (India) Ltd. v. ITO (2003) 259 ITR 19 and Asian Paints v. DCIT (2008) 296 ITR 90 requires that the order rejecting objections be communicated and the assessee be given four weeks to approach the High Court before finalizing reassessment. Non-compliance renders the reassessment order unsustainable. (Paras 4-5)
Issue of Consideration
Whether the reassessment order passed without communicating the order rejecting objections and within four weeks of such communication is valid.
Final Decision
The impugned notice under Section 148, order dated 12 February 2015 rejecting objections, and reassessment order dated 27 February 2015 are set aside. The respondents are directed to redo the reassessment in accordance with law, after giving the petitioner a reasonable opportunity of being heard. Rule made absolute accordingly.
Law Points
- Reassessment notice under Section 148
- duty to communicate order rejecting objections
- compliance with GKN Driveshafts (India) Ltd. v. ITO
- natural justice
- limitation period
