M/S.ANKIT AGROCHEM PRIVATE LIMITED V. JOINT COMMISSIONER OF INCOME TAX and ANR.

CW/7734/2017

AI Insights

In this case, M/s Ankit Agrochem Private Limited, represented by its director Shri Avinash Modi, filed a writ petition against the Joint Commissioner of Income Tax and the Assistant Commissioner of Income Tax, challenging a show cause notice and an order that deferred their objections without a decision. The petitioner argued that the assessing authority was required to decide on the objections with a speaking order before proceeding with the assessment, citing a precedent from the Supreme Court in GKN Driveshafts (India) Ltd. v. Income Tax Officer & Ors. The court, however, found that since a specific order dealing with the objections was passed, and the objections were factual, they could only be decided during the assessment.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 760224 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 13-09-2017
• Assessment Year: misc
• Other Referred Cases: GKN Driveshafts (India) Ltd. V/s Income Tax Officer & Ors. (2003) 179 CTR 0011
• Laws Referred To: Income Tax Act of 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K K BISSA; H G CHANDAK; G S CHOUHAN
• Assessee Lawyers: MAHENDRA GARGIEYA; VINEET DAVE
• Keywords: Assessment; Creditworthiness; Genuineness; Income Tax; Show cause notice; Speaking order; Bogus source
• Section: 147; 148

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. *** S.B. Civil Writ Petition No. 7734 / 2017 M/s Ankit Agrochem Private Limited, A-21, IIIrd Floor, Room No. 5, Sadulganj, Bikaner Through Its Director Shri Avinash Modi S/o Shri Arun Kumar Modi, Aged About 37 Years, Resident of A-21, Sadulganj, Bikaner. ----Petitioner Versus 1. Joint Commissioner of Income Tax, Range-1, Income Tax Department, Bikaner. 2. The Assistant Commissioner of Income Tax, Circle-1, Room No. 52, Income Tax Office, Rani Bazar, Bikaner. ----Respondents _____________________________________________________ For Petitioner : Mr. Mahendra Gargieya assisted by Mr. Vineet R. Dave. For Respondent(s) : Mr.K.K.Bissa assisted by Mr.H.G.Chandak & Mr. G.S. Chouhan. _____________________________________________________ HON'BLE MS. JUSTICE NIRMALJIT KAUR Order 13/09/2017 The prayer in the present writ petition is to set aside the show cause notice dated 20.02.2017 issued under section 147/148 of the Act of 1961 as well as the order dated 02.06.2017 vide which the objections raised by the petitioner are stated to have been deferred and not decided. While praying for setting aside the order, it was contended by learned counsel for the petitioner that the assessing authority is bound to decide the objections by passing a speaking order before proceeding with the assessment. Instead, the assessing (2 of 4) [CW-7734/2017] authority simply deferred the same and decided to proceed with the assessment without deciding the objections. Reliance is placed upon the judgment dated 25.11.2002 passed by the Hon’ble Apex Court in GKN Driveshafts (India) Ltd. V/s Income Tax Officer & Ors. reported in (2003) 179 CTR 0011 to contend that it was mandatory for the assessing authority to decide the objections by passing a speaking order. Learned counsel for the parties are heard. The objections dated 19.05.2017 filed by the petitioner were perused by this court with the assistance of learned counsel for the petitioner. The main objection appears to be that there is no material with the respondents and neither any material, if any, has been supplied to the petitioner to enable them to respond to the said objections, whereas, it is specifically observed in the order dated 02.06.2017 dealing with the objection that the material available on record will be provided to the petitioner during the assessment proceedings and submissions made by the petitioner regarding the same shall be duly considered. Moreover, the learned counsel on instructions from the respondents too stated at the bar that the said material relied upon by the department shall be duly supplied to learned counsel for the petitioner and sufficient time shall be granted to respond to the same before passing the order of assessment. The notice under section 148 is issued to the petitioner on the allegation that share application money has been received by the assessee company with no real business and from bogus source lacking genuineness and creditworthiness resulting in (3 of 4) [CW-7734/2017] income to the tune of Rs.2,19,98,520/- which was liable to be taxed but has escaped assessment. Thus, objections filed by the petitioner clarifying that: “(a) All companies are registered with Registrar of Companies, detail about ROC and registration no. of the companies are as per Annexure-A’. (b) All companies are registered with Reserve Bank of India to carry on business of non banking financial institution registration no. of the companies are as per Annexure ‘A’. (c ) All companies are regular income tax assessee having PAN and filed income tax return for the Asstt Year 2013-14 of which details are as per Annexure- ‘A” are factual which can only be dealt on merits during the assessment proceedings. There is no dispute with the proposition of law laid down by the Hon’ble Apex Court in the case of GKN Driveshafts (India) Ltd. (supra). In that case, no order at all was passed on the objections. In the present case, a specific order dealing with the objections was passed but since all the objections are based on facts and documents, this court finds no ground to set aside the order observing that the same can only be decided only at the time of assessment. The objections being totally factual, no fault can be found in the order observing that such objections can only be adjudicated at the time of dealing with the assessment order. Dismissed accordingly. However, this court has no doubt that as stated by learned counsel for the respondents, the petitioner shall be supplied documents as relied upon by the department (4 of 4) [CW-7734/2017] for proceeding against him and sufficient time will be granted to the petitioner in accordance with law to respond to the same in defence. (NIRMALJIT KAUR), J. Anil Singh/1 "