Case Note & Summary
The petitioner, The Goa State Coop. Bank Ltd., challenged the refusal of the Assessing Officer to pass a speaking order on objections raised by it after receiving reasons for reopening assessment under Section 148 of the Income Tax Act, 1961. The petitioner was served with a notice under Section 148 on 03.03.2016, filed returns, and sought reasons which were provided on 09.08.2016. On 06.12.2016, the petitioner raised objections, including that the Tribunal for assessment year 2010-11 had allowed the deduction claimed. Subsequently, the petitioner was served with a notice under Section 142(1) on 14.12.2016 for hearing on 19.12.2016, which was a public holiday in Goa; the petitioner did not appear. On 23.12.2016, the Assessing Officer passed an assessment order without disposing of the objections. The court held that the Assessing Officer is bound to pass a speaking order on objections raised by the assessee before proceeding with reassessment, and failure to do so vitiates the proceedings. The court set aside the assessment order and directed the Assessing Officer to pass a speaking order on the objections within four weeks, after giving the petitioner an opportunity of hearing.
Headnote
A) Income Tax - Reassessment - Speaking Order on Objections - Section 148, Income Tax Act, 1961 - The Assessing Officer issued notice under Section 148 for reopening assessment; assessee filed objections on 06.12.2016 raising legal issues including that Tribunal had allowed deduction for earlier year; Assessing Officer failed to pass a speaking order on these objections before proceeding with assessment under Section 142(1) - Held that failure to pass a speaking order on objections vitiates the subsequent proceedings and the assessment order dated 23.12.2016 is set aside (Paras 3-6).
Issue of Consideration
Whether the Assessing Officer is required to pass a speaking order on the objections raised by the assessee after furnishing reasons for reopening assessment under Section 148 of the Income Tax Act, 1961, and whether failure to do so vitiates the subsequent assessment proceedings.
Final Decision
The court allowed the writ petition, set aside the assessment order dated 23.12.2016, and directed the Assessing Officer to pass a speaking order on the objections raised by the petitioner within four weeks, after giving the petitioner an opportunity of hearing.
Law Points
- Assessing Officer must pass a speaking order on objections raised by assessee before proceeding with reassessment under Section 148 of Income Tax Act
- 1961
- Failure to do so vitiates subsequent proceedings
- Reopening of assessment without disposing objections is illegal
Case Details
2017 LawText (BOM) (02) 131
Writ Petition No. 38 of 2017
F. M. Reis, Nutan D. Sardessai
S. R. Rivankar, Rama Rivankar for Petitioners; Susan Linhares for Respondents
The Goa State Coop. Bank Ltd.
The Asst. Commissioner of Income Tax, Circle1(1), Panaji, Goa; The Income Tax Officer, W-2(4), Panaji, Goa; The Principal Commissioner of Income Tax, Panaji, Goa
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Nature of Litigation
Writ Petition challenging the refusal of the Assessing Officer to pass a speaking order on objections raised by the petitioner after notice under Section 148 of the Income Tax Act, 1961 for reopening assessment.
Remedy Sought
Petitioner sought quashing of the assessment order dated 23.12.2016 and direction to the Assessing Officer to pass a speaking order on its objections.
Filing Reason
The Assessing Officer failed to pass a speaking order on the objections raised by the petitioner against the reopening of assessment under Section 148, and proceeded to pass an assessment order under Section 142(1) without disposing of the objections.
Previous Decisions
The Tribunal for assessment year 2010-11 had allowed the deduction claimed by the petitioner, which was brought to the notice of the Assessing Officer in the objections.
Issues
Whether the Assessing Officer is required to pass a speaking order on objections raised by the assessee after furnishing reasons for reopening assessment under Section 148 of the Income Tax Act, 1961.
Whether failure to pass a speaking order on objections vitiates the subsequent assessment proceedings.
Submissions/Arguments
Petitioner argued that the Assessing Officer failed to pass a speaking order on the objections raised on 06.12.2016, which vitiates the subsequent proceedings under Section 142(1).
Petitioner contended that the objections raised legal issues including that the Tribunal for assessment year 2010-11 had allowed the deduction claimed.
Respondents did not make any specific submissions as the court proceeded to allow the petition.
Ratio Decidendi
The Assessing Officer is bound to pass a speaking order on the objections raised by the assessee after furnishing reasons for reopening assessment under Section 148 of the Income Tax Act, 1961. Failure to do so vitiates the subsequent assessment proceedings as it deprives the assessee of a fair opportunity to contest the reopening.
Judgment Excerpts
The challenge in the above Petition is to the refusal of the Assessing Officer passing a speaking Order on the objections raised by the Petitioners after filing the return and obtaining reasons for the intended re-opening of the Assessment in terms of Section 148 of the Income Tax Act.
The learned Counsel further pointed out that the Assessing Officer has failed to pass a speaking Order on the objections raised by the Petitioners which itself vitiates the subsequent proceedings initiated by the Assessing Order under Section 142 of the Income Tax Act.
Procedural History
Notice under Section 148 issued on 03.03.2016; petitioner filed returns and sought reasons; reasons provided on 09.08.2016; petitioner raised objections on 06.12.2016; notice under Section 142(1) issued on 14.12.2016 for hearing on 19.12.2016; assessment order passed on 23.12.2016 without disposing objections; writ petition filed in 2017.
Acts & Sections
- Income Tax Act, 1961: Section 148, Section 142(1), Section 187
