Rabo India Finance Ltd. vs Deputy Commissioner of Income Tax and Others

Rule, by consent returnable forthwith. With the consent of counsel and at their request the petition is taken up for hearing and final disposal. In the present case, a notice u/s 148 of the income tax Act, 1961, was issued to the assessee on March 28, 2011. Reasons were furnished to the assessee for reopening the assessment for the assessment year 2004-05 on November 19, 2011. The assessment is sought to be opened beyond a period of four years of the end of the relevant assessment year. The assessee filed its objections to the reopening of the assessment on November 30, 2011. The Assessing Officer passed an order of reassessment on December 16, 2011. Evidently, the Assessing Officer did not hear the objections of the assessee nor did he pass a separate order on those objections.

There is merit in the contention of the assessee that the Assessing Officer has acted patently in breach of the judgment of the Supreme Court in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and Others, . The principle laid down by the Supreme Court was binding upon the Assessing Officer. Instead of complying with the decision, the Assessing Officer has acted arbitrarily and in a manner clearly contrary to law in passing an order without disposing of the objections of the assessee. The attention of the court has been drawn to an order passed by this court in a similar case IOT Infrastructure and Energy Services Ltd. Vs. Assistant Commissioner of Income Tax and Another, . Following the earlier order of the Division Bench, we dispose of the petition in the following terms :

(i) the order of reassessment dated December 16, 2011, is quashed and set aside;

(ii) the Assessing Officer 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 clause (iii) above, the order passed as per clause (ii) above is not stayed by a court and there is no order restraining the Assessing Officer from passing a reassessment order, the Assessing Officer 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 clause (iii) above;

(v) in order to facilitate completion of the entire exercise set out hereinabove, for a period of ten weeks from today, the notice dated March 28, 2011, shall remain stayed;

(vi) all the rights and contentions of the parties are kept open and this order shall not be construed 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.