GKN DRIVESHAFTS (INDIA) LTD. V. INCOME TAX OFFICER .

C.A. No.-007731-007731 - 2002

AI Insights

GKN Driveshafts (India) Ltd. filed a writ petition challenging the validity of notices issued under Sections 148 and 143(2) of the Income Tax Act, 1961, for several assessment years. The High Court of Delhi dismissed the writ petition, deeming it premature as the appellant could have raised objections in response to the notices. Aggrieved by this decision, the appellant approached the Supreme Court. The Supreme Court, after hearing the arguments, dismissed the appeals, providing clarity on the procedure to be followed upon receiving such notices and emphasizing the need for a speaking order on any objections raised.

• Counselvise Citation: [2002] 140 COUNSELVISE.COM (IT) 628138 (SC)
• Appeal Type: Supreme court cases
• Pronouncement Date: 25-11-2002
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: SUPREME COURT
• Department Lawyers: RANBIR CHANDRA; NEERA GUPTA; RAJIV TYAGI; B V BALARAM DAS
• Assessee Lawyers: M L VERMA; JAGDISH KUMAR CHAWLA; VP GUPTA; R K JAIN
• Keywords: Assessment years; Civil Appeals; High Court; Income Tax; Notices; Special Leave to Appeal
• Section: 148; 143(2)

Judgement Text

"¤7 SLP(C)No. 5520 OF 2002 ITEM No.45 Court No. 4 SECTION IIIA A/N MATTER S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (Civil) No.5520/2002 (From the judgement and order dated 31/01/2002 in CW 730/2002 of The HIGH COURT OF DELHI AT N. DELHI) GKN DRIVESHAFTS (INDIA) LTD. Petitioner (s) VERSUS INCOME TAX OFFICER & ORS. Respondent (s) (With appln(s). for permission to place addl. documents on record, prayer for interim relief and office report) With S.L.P. (C) No.5522 of 2002 (With appln(s). for permission to place addl. documents on record, prayer for interim relief and office report) S.L.P. (C) No.5524 of 2002 (With appln(s). for permission to place addl. documents on record, prayer for interim relief and office report) S.L.P. (C) No.5525 of 2002 (With appln(s). for permission to place addl. documents on record, prayer for interim relief and office report) S.L.P. (C) No.5527 of 2002 (With appln(s). for permission to place addl. documents on record, prayer for interim relief and office report) S.L.P. (C) No.5529 of 2002 (With appln(s). for permission to place addl. documents on record, prayer for interim relief and office report) S.L.P. (C) No.5531 of 2002 (With appln(s). for permission to place addl. documents on record, prayer for interim relief and office report) Date : 25/11/2002 These Petitions were called on for hearing today. CORAM : HON’BLE MR. JUSTICE SYED SHAH MOHAMMED QUADRI HON’BLE MR. JUSTICE ARIJIT PASAYAT For Petitioner (s) Mr. M.L. Verma,Sr.Adv. Mr. Jagdish Kumar Chawla,Adv. Mr. V.P. Gupta,Adv. Mr. R.K. Jain,Adv. ...2/- - 2 - For Respondent (s) Mr. Ranbir Chandra,Adv. Ms. Neera Gupta,Adv. Mr. Rajiv Tyagi,Adv. Mr. B.V. Balaram Das,Adv. UPON hearing counsel the Court made the following O R D E R ......L......I..T.......T.......T.......T.......T............T....J Heard Mr. M.L. Verma, learned senior counsel for the petitioner, and Mr. Ranbir Chandra, learned counsel for the respondents, from 1.35 p.m. to 1.50 p.m. Leave is granted. The civil appeals are dismissed. No costs. Reportable.@@ CCCCCCCCCCC (T.I. Rajput) (Kanwal Singh) Court Master Court Master (Signed order is placed on the file) .PA .PL55 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No. 7731 of 2002@@ CCCCCCCCCCCCCCCCCCCCCCCCCCCCC (Arising out of S.L.P. (C) No. 5520 of 2002) GKN Driveshafts (India) Ltd. ...Appellant (s) Versus˜ Income Tax Officer & Ors. ....Respondent (s) W I T H@@ CCCCCCCCCC Civil Appeal Nos.7732,7733-34,7735,7736 & 7737 of 2002@@ CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC (Arising out of S.L.P. (C) Nos.5522, 5524-25, 5527, 5529 & 5531 of 2002) O R D E R@@ CCCCCCCCCCCCC ....L......I.....T.......T.......T.......T.......T.......T.......J .SP2 Heard learned counsel for the parties. Leave is granted. By the order under challenge, a Division Bench of the High Court at Delhi dismissed the writ petition filed by the appellant challenging the validity of notices issued under Sections 148 and 143(2) of the Income Tax Act, 1961. The High Court took the view that the appellant could have taken all the objections in its reply to the notices and that, at that stage, the writ petition was premature. Accordingly, the writ petition was dismissed on 31st January, 2001. Aggrieved by that order, the appellant is in appeal before us. ...2/- - 2 - Mr. M.L. Verma, learned senior counsel appearing for the appellant, submits that the impugned notices relate to seven assessment years; that during the pendency of these appeals, in respect of two assessment years, viz., 1995-96 and 1996-97, assessment has been completed against which appeals have been filed. Notices relating to the other five assessment years, viz., 1992-93, 1993-94, 1994-95, 1997-98 and 1998-99, are now the subject-matter of these appeals. We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years. Insofar as the appeals filed against the order of ...3/- - 3 - assessment before the Commissioner (Appeals), we direct the appellate authority to dispose of the same, expeditiously. With the above observations, the civil appeals are dismissed. No costs. .SP1 .........................J.@@ AAAA (Syed Shah Mohammed Quadri)@@ AAAAAAAAAAAAAAAAAAAAAAAAAAA .........................J.@@ AA (Arijit Pasayat)@@ AAAAAAAAAAAAAAAA New Delhi, November 25, 2002. "