M/S K C MERCANTILE V. DEPUTY COMMISSIONER OF IT

ITA/292/2016

AI Insights

The case involves M/s K.C. Mercantile, a company engaged in manufacturing electronics energy meters, which filed an appeal against the reassessment order by the Deputy Commissioner of Income Tax, Jaipur. The reassessment was initiated under Section 148 of the Income Tax Act, 1961, leading to an addition of Rs. 47,00,000 to the company's income, categorized as unexplained cash credit under Section 68. The tribunal had earlier remitted the matter back for reassessment, which the appellant contested, arguing that this would extend the limitation period unfairly and contradict the strict application of time limits under the Income Tax Act. The High Court, referencing several Supreme Court and High Court decisions, particularly GKN Driveshafts (India) Ltd. v. ITO, held that the Assessing Officer must dispose of the preliminary objections through a speaking order before proceeding with the reassessment.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 744803 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 07-11-2017
• Assessment Year: misc
• Other Referred Cases: KSS Petron Private Ltd. vs. The ACIT, Pr. Commissioner of Income Tax-2 vs. Sagar Developers, GKN Driveshafts (India) Ltd. vs. Income Tax Officer and Ors., Assistant Commissioner of Income Tax vs. Hotel Blue Moon, General Motors India (P) Ltd. vs. Deputy Commissioner of Income Tax, Travellers Choice vs. Income Tax Officers, Commissioner of Income Tax vs. Amit K. Jain, Keshrimal Jivji Shah & Anr. vs. Bank of Maharashtra & ORs., Umesh Kumar Misra vs. Union of India, Shri A.S. Chinnaswamy Raju vs. ACIT, Commissioner of Income Tax, West Bengal 1 vs. Vegetables Products Ltd., Banaskantha District Oilseeds Growers Co-op Union Ltd. vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ANUROOP SINGHI; ADITYA VIJAY
• Assessee Lawyers: SANJAY JHANWAR; ARCHANA
• Keywords: Reassessment; Share Application Money; Speaking order; Unexplained cash credit
• Section: 148; 143(3); 143(1); 68

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 292 / 2016 M/s K.C. Mercantile (Presently Known As Genus Innovation Limited), Registered Office At B-9, Ganpati Enclave Ajmer Road, Jaipur Through Its Director Ramachandran Viswanathan S/o Shri Muthurama Ramachandran, Residing At C-89, Jagraj Marg, 402, Mangalam Apartment, Bapu Nagar, Jaipur- 302015 ----Appellant Versus Deputy Commissioner of Income Tax Circle, Circle-2, Jaipur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. Sanjay Jhanwar with Ms Archana For Respondent(s) : Mr. Anuroop Singhi with Mr. Aditya Vijay _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 07/11/2017 1. By way of this appeal, the appellant has assailed the judgment and order of the tribunal whereby tribunal has allowed the appeal of the assessee only for statistical purposes. 2. This court while admitting the appeal on 14.2.2017 framed the following substantial questions of law:- (I) Whether under the facts and circumstances of the case the ld. Tribunal was justified in not declaring the reassessment proceedings and the consequential assessment order passed thereto as nullity? (II) Whether under the facts and circumstances of the case the ld. Tribunal has not committed grave legal error in setting aside the entire quantum proceedings? (2 of 31) [ITA-292/2016] 2.1 Subsequently vide order dt. 8.8.2017, relying on decision of Supreme Court, this court added the following substantial question of law:- Whether under the facts and circumstances of the case the ld. Tribunal was justified in not declaring the reassessment proceedings and the consequential assessment order passed thereto as nullity ? 3. The facts of the case are that the appellant is a limited company incorporated under the Companies Act, 1956 and engaged in the business of manufacturing of electronics energy meters besides doing work on job basis. The return of income declaring total income of Rs.2,79,230/- was filed by the assessee which was processed u/s 143(1) of the IT Act, 1961. Thereafter the re-assessment proceedings were initiated u/s 148 and the assessment stood completed u/s 143(3)/148 at total income of Rs.49,79,230/- by making addition of Rs.47,00,000/- on account of share application money as unexplained cash credit u/s 68 of the Act. The ld. CIT(A) dismissed the appeal of the assessee. 4. Counsel for the appellant has contended that the present appeal is arising out of the judgment and order of the tribunal whereby tribunal has upheld the contention of the appellant and remitted back the matter for reassessment which will give a second inning to the Assessing Officer who has to do reassessment within a period of 9 months and he will get extended time of limitation which is not the object of the Income Tax Act. When the Court has already fixed the period, it is to be construed in a very strict sense and has to be applied. (3 of 31) [ITA-292/2016] 4.1. In support of his contention, he has relied upon the following decisions: 1. KSS Petron Private Ltd. vs. The ACIT, ITA No. 224/2014, 03.10.2016 holding as under: 7. On further Appeal, the Tribunal passed the impugned order. By the impugned order it held that the Assessing Officer was not justified in finalizing the Assessment, without having first disposed of the objections of the appellant. This impugned order holds the Assessing Officer is obliged to do in terms of the Apex Court's decision in GKN Driveshafts (India) Ltd., v/s. ITO 259ITR19. In the aforesaid circumstances, the order of the CIT(A) and the Assessing Officer were quashed and set aside. However, after having set aside the orders, it restored the Assessment to the Assessing Officer to pass fresh order after disposing of the objections to reopening notice dated 28th March, 2008, in accordance with law. 8. We note that once the impugned order finds the Assessment Order is without jurisdiction as the law laid down by the Apex Court in GKN Driveshafts (supra) has not been followed, then there is no reason to restore the issue to the Assessing Officer to pass a further/fresh order. If this is permitted, it would give a licence to the Assessing Officer to pass orders on reopening notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the Assessing Officer for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the Assessee by reviving stale/ old matters. 9 In fact, to ensure that reopening notices are disposed of, expeditiously the parliament itself has provided in Section 153(2) of the Act a period of limitation within which the Assessing Officer must pass an order on the notice of reopening i.e. within one year from the end of the financial year in which the notice was issued. In fact, Section 153 (2A) of the Act as in force at the relevant time itself provides that an order of fresh Assessment, consequent to the order of (4 of 31) [ITA-292/2016] Tribunal under Section 254 of the Act, would have to be passed within one year from the end of the financial year in which the order under Section 254 of the Act, was passed by the Tribunal and received by the Commissioner of Income Tax. 2. In Pr. Commissioner of Income Tax-2 vs. Sagar Developers (GUJHC)[2016] 72 taxmann.com 321, it has been held as under :- 27. In the result, the question is answered in favour of the Revenue. The impugned respective judgments of the Tribunal would stand modified by providing that the respective orders of assessment though should stand set aside it would be open for the Assessing Officer to frame fresh assessment after first disposing of the objections of the assessees. Needless to clarify the provisions for time limit for framing the assessment as may be applicable would apply. 3. In GKN Driveshafts (India) Ltd. vs. Income Tax Officer and Ors. (SC)[2003] 259 ITR 19 (SC) it has been held as under :- 5. 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 notice 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 notice 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. (5 of 31) [ITA-292/2016] 4. In Assistant Commissioner of Income Tax vs. Hotel Blue Moon , [2010] 321 ITR 362 SC, it has been held as under :- 15. We may now revert back to Section 158 BC(b) which is the material provision which requires our consideration. Section 158 BC(b) provides for enquiry and assessment. The said provision reads “that the assessing officer shall proceed to determine the undisclosed income of the Block period in the manner laid down in Section 158 BB and the provisions of Section 142, sub-section (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply.” An analysis of this sub section indicates that, after the return is filed, this clause enables the assessing officer to complete the assessment by following the procedure like issue of notice under Sections 143(2)/142 and complete the assessment under Section 143(3). This Section does not provide for accepting the return as provided under Section 143(i)(a). The assessing officer has to complete the assessment under Section 143(3) only. In case of default in not filing the return or not complying with the notice under Sections 143(2)/142, the assessing officer is authorized to complete the assessment ex-parte under Section 144. Clause (b) of Section 158 BC by referring to Section 143(2) and (3) would appear to imply that the provisions of Section 143(1) are excluded. But Section 143(2) itself becomes necessary only where it becomes necessary to check the return, so that where block return conforms to the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice under Section 143(2). However, if an assessment is to be completed under Section 143(3) read with Section 158-BC, notice under Section 143(2) should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under Section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with. The other important feature that requires to be noticed is that the Section 158 BC(b) specifically (6 of 31) [ITA-292/2016] refers to some of the provisions of the Act which requires to be followed by the assessing officer while completing the block assessments under Chapter XIV-B of the Act. This legislation is by incorporation. This Section even speaks of subsections which are to be followed by the assessing officer. Had the intention of the legislature was to exclude the provisions of Chapter XIV of the Act, the legislature would have or could have indicated that also. A reading of the provision would clearly indicate, in our opinion, if the assessing officer, if for any reason, repudiates the return filed by the assessee in response to notice under Section 158 BC(a), the assessing officer must necessarily issue notice under Section 143(2) of the Act within the time prescribed in the proviso to Section 143(2) of the Act. Where the legislature intended to exclude certain provisions from the ambit of Section 158 BC(b) it has done so specifically. Thus, when Section 158 BC(b) specifically refers to applicability of the proviso thereto cannot be exclude. We may also notice here itself that the clarification given by CBDT in its circular No.717 dated 14th August, 1995, has a binding effect on the department, but not on the Court. This circular clarifies the requirement of law in respect of service of notice under sub-section (2) of Section 143 of the Act. Accordingly, we conclude even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of Section 158 BC, the provisions of Section 142 and sub-sections (2) and (3) of Section 143 are applicable and no assessment could be made without issuing notice under Section 143(2) of the Act. However, it is contended by Sri Shekhar, learned counsel for the department that in view of the expression “So far as may be” in Section 153 BC(b), the issue of notice is not mandatory but optional and are to be applied to the extent practicable. In support of that contention, the learned counsel has relied on the observation made by this Court in Dr. Pratap Singh’s case [1985] 155 ITR 166(SC). In this case, the Court has observed that Section 37(2) provides that “the provisions of the Code relating to searches, shall so far as may be, apply to searches directed under Section 37(2). Reading the two sections together it merely means that the (7 of 31) [ITA-292/2016] methodology prescribed for carrying out the search provided in Section 165 has to be generally followed. The expression “so far as may be” has always been construed to mean that those provisions may be generally followed to the extent possible. The learned counsel for the respondent has brought to our notice the observations made by this Court in the case of Maganlal Vs. Jaiswal Industries, Neemach and Ors., [(1989) 4 SCC 344], wherein this Court while dealing with the scope and import of the expression “as far as practicable” has stated “without anything more the expression `as far as possible’ will mean that the manner provided in the code for attachment or sale of property in execution of a decree shall be applicable in its entirety except such provision therein which may not be practicable to be applied.” 5. In General Motors India (P) Ltd. vs. Deputy Commissioner of Income Tax (GUJHC) [2013] 354 ITR 244, it has been held as under :- 23. From the aforesaid discussion, we are of the considered opinion that writ petition under Art. 226 of the Constitution of India is maintainable where no order has been passed by the AO deciding the objection filed by the assessee under s. 148 of the Act and assessment order has been passed or the order deciding an objection under s. 148 of the Act has not been communicated to the assessee and assessment order has been passed or the objection filed under s. 148 has been decided along with the assessment order. If the objection under s. 148 has been rejected without there being any tangible material available with the AO to form an opinion that there is escapement of Income from assessment and in absence of reasons having direct link with the formation of the belief, the writ Court under Art. 226 can quash the notice issued under s. 148 of the Act. The writ petition filed by the petitioner is maintainable. The AO is mandated to decide the objection to the notice under s. 148 and supply or communicate it to the assessee. The assessee gets an opportunity to challenge the order in a writ petition. (8 of 31) [ITA-292/2016] Thereafter, the AO may pass the reassessment order. We hold that it was not open to the AO to decide the objection to notice under s. 148 by a composite assessment order. The AO was required to, first decide the objection of the assessee filed under s. 148 and serve a copy of the order on assessee. And after giving some reasonable time to the assessee for challenging his order, it was open to him to pass an assessment order. This was not done by the AO, therefore, the order on the objection to the notice under s. 148 and the assessment order passed under the Act deserve to be quashed. 6. In Ferrous Infrastructure Pvt. Ltd. and Ors. vs. Deputy Commissioner of Income Tax (DELHC) [2015] 63 taxmann.com 201, it has been held as under :- 8. We may also point out that the second issue raised by the learned counsel for the petitioners also deserves some consideration. In GKN Driveshafts (supra), the Supreme Court had directed as under:- \"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.\" (underlining added) 8.1. On going through the same, it is evident that the Assessing Officer has to pass a speaking order disposing of the objections \"before proceeding with the assessment\". In (9 of 31) [ITA-292/2016] the present case, a separate speaking order has not been passed and the objections have been dealt with, if at all, in the re- assessment order itself. On this ground also, the petitioner is liable to succeed. 9. For all the reasons indicated above, the petition is allowed. The notice under Section 148 dated 30.08.2012 is quashed so also all proceedings pursuant to the said notice under Section 148 including the order dated 30.03.2014. 7. In Travellers CHoice vs. Income Tax Officers,[2010] 326 ITR 153 (Karnataka), it has been held as under :- 8. In view of the order passed in I.T.A. No. 102 of 2002 and other connected matters between CIT Vs. Dr. N. Thippa Setty [2010] 322 ITR 525 (Karn), dated April 9, 2008, we are of the view that the order passed by the authorities have to be quashed on the ground that there is no compliance with the provisions of the section 147 of the Act, for these assessment years. Accordingly, we answer the questions of law framed. Accordingly, the appeal is allowed. 8. In Commissioner of Income Tax vs. Amit K. Jain (GUJHC) [2016] 388 ITR 113, it has been held as under :- 6. We have heard learned counsel for the parties. We are aware of the decision of the Apex Court which has been referred by the Bombay High Court. Nonetheless, while block assessment is to be made, the Assessing Officer is having knowledge about the statutory provision and while issuing notice he should have mentioned in it about his source of power and should have referred to time which is required to be given for the purpose of filing of return under section 158BC of the Act. The words mentioned in the notice are 'within fifteen days' whereas the provision mandates the time of \"not less than fifteen days\". In view of the decisions of the Supreme Court referred more particularly New India Industries Ltd. (supra), we are of the (10 of 31) [ITA-292/2016] opinion, fifteen days means, clear fifteen days which is the requirement under law. In that view of the matter, we are of the view that the notice which was issued by the authority asking the assessee to file the return within fifteen days is not in accordance with the provisions of the Income-tax Act and therefore it is invalid. In our view, the authority who is issuing the notice must be aware of the Act and must construe the provision strictly. The words 'not less than fifteen days' have to be interpreted correctly. In that view of the matter, since the Assessing Officer asked the assessee to file the return within fifteen days of the service of the notice, the notice issued by the Assessing Officer is invalid. We are, therefore, of the opinion that the Tribunal has rightly cancelled the order of the Assessing Officer. The questions referred to us are, therefore, answered in favour of the assessee and against the revenue. 9. In Sona Builders vs. UOI & Ors., (2001) 1 SCC 280, it has been held as under :- 3. We are quite unable to agree with the view taken by the High Court. The notice was addressed on May 21, 1993, from Delhi to the appellant in Jaipur fixing the hearing on May 31, 1993. It was patent that it would take two or three days for that notice to be received in Jaipur even though despatched by speed post. In effect, therefore, the notice gave five days to the addressees to respond, and we are told that two of those days were Saturday and Sunday. Under section 269UD the Appropriate Authority had two months to act commencing from the end of the month in which the Form No. 37-I was filed. The form was filed on March 9 so that the Appropriate Authority had about two months and twenty days to take action. He did not take action until only one week from the last available date, and then he gave the appellant, in reality, only three days to respond. This was, plainly, most inadequate. 4. Further, the notice alleged that the apparent consideration of the transaction (11 of 31) [ITA-292/2016] between the appellant and the transferor was low based on the sale instance mentioned thereon. To be able adequately to respond to that allegation, it was necessary for the appellant to ascertain what the merits and demerits were of that property which had been auctioned, and to know what were the terms and conditions of the auction. No copy of any document relating to the sale instance was furnished by the Appropriate Authority to the appellant along with the notice, or at any time whatsoever. 5. There is no doubt in our minds that on both counts there has been a gross breach of the principles of natural justice because adequate opportunity to meet the case made out in the notice was not given to the appellant. 6. Having regard to the statutory limit within which the Appropriate Authority has to act and his failure to act in conformity with the principles of natural justice, we do not think we can remand the matter to the Appropriate Authority. We must set his order aside. 10. In Jayanthi Natarajan vs. Assistant Commissioner of Income Tax, Non Corporate Circle 1(1) (MADHC), it has been held as under :- 17. The law declared by the Hon'ble Supreme Court is of binding character and is a source of law and to itself, which will bind all authorities. GKN Driveshafts (India) Ltd., (supra), lays down a law and failure to comply would render the assessment order as without jurisdiction (Nand Kishore v. State of Punjab reported in (1995) 6 SCC 614 and Nair Services Society v. State of Kerala reported in (2007) 4 SCC 1). 11. Shri A.S. chinnaswamy Raju, vs. ACIT, 12. The Commissioner of Income Tax, West Bengal 1, Calcutta vs. Vegetables Products Ltd. (SC) (12 of 31) [ITA-292/2016] 6. There is no doubt that the acceptance of one or the other interpretation sought to be placed on Section 271(1)(a)(i) by the parties would lead to some inconvenient result, but the duty of the court is to read the section, understand its language and give effect to the same. If the language is plain, the fact that the consequence of giving effect to it may lead to some absurd result is not a factor to be taken into account in interpreting a provision. It is for the legislature to step in and remove the absurdity. On the other hand, if two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted. This is a well accepted rule of construction recognised by this Court in several of its decisions. Hence all that we have to see is, what is the true effect of the language employed in Section 271(1)(a)(i). If we find that language to be ambiguous or capable of more meanings than one, then we have to adopt that interpretation which favours the assessee, more particularly so because the provision relates to imposition of penalty. 13. In Keshrimal Jivji Shah & Anr. vs. Bank of Maharashtra & ORs., [2005] 273 ITR 451, it has been held as under :- 30. Mr. Naphade's reliance upon the decision of the Lahore High Court, subsequently followed, according to him, is misplaced. Considering the view of the Supreme Court in matters of this nature, it will not be possible for us to accept the pleas raised by Shri Naphade. The Court cannot allow a party to get away with violation of its prohibitory orders and uphold the transactions contrary to and in violation of its directions on the spacious plea that only way in which the Court can regulate such acts is to visit the guilty party with penalties. It is time that Courts reach the transaction itself and put an end to purported rights created thereby. Failing which, it will become possible for parties to retain fruits or benefits of such acts by (13 of 31) [ITA-292/2016] suffering penalties. It is well settled that no person can take advantage of his own wrong. In the instant case, respondent No. 2 in violation of the order of this Court, transferred the property by creating sub- lease in favour of petitioner. The approach suggested by Shri Naphade, if accepted, will allow respondent No. 2 to retain the benefits under the sub-lease. It will also allow the petitioners to get away easily when the Courts below have found that they have not acted bona fide. 14. In Umesh Kumar Misra son of Sri Ram Raj Misra vs. Union of India (UOI) through Secretary, Ministry of Home Affairs, (ALLHC)(2006) ILR 3AII1211, it has been held as under :- 7. It is also a settled principle that no person can claim any right arising out of his wrong doing i.e. a person having done wrong, cannot take advantage of his own wrong. 5. Mr. Singhi, counsel for the respondent has relied on Section 153(3) of the Income Tax Act and contended that basic argument of assessee is contrary to spirit of Section 153(3), if such an argument is accepted, it is contrary to law declared by the Supreme Court itself on which the assessee has based his argument in GKN Driveshafts (supra) where the Supreme Court itself has remanded back the matter for reassessment. He has relied upon the following decisions: 1. In, Arvind Mills Ltd. vs. Assistant Commissioner of Wealth Tax (GUJHC) (2004) 270 ITR 0467, it has been held as under :- 3. It is, however, not necessary to go into the merits of the controversy raised in this (14 of 31) [ITA-292/2016] petition for the simple reason that in GKN Driveshafts India Ltd. v. ITO: (2003) 259 ITR 19 the apex Court has now clarified that when a notice under Section 148 of the IT 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 AO 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 AO is bound to dispose of the same by passing a speaking order. 4. The above principle laid down in respect of the notice for reassessment under the IT Act would apply with full force to the notice for reassessment under Section 17 of the WT Act as well. The petitioner-company had already filed its return in response to the impugned notice and requested for furnishing reasons, which request has been acceded to only very recently and the petitioner has thereafter submitted its objections on 19th Feb., 2004. The AO is, therefore, now required to dispose of the objections by passing a speaking order as per the aforesaid decision of the Hon'ble Supreme Court. 5. The AO is accordingly required to decide the preliminary objections lodged by the petitioner to the notice for reassessment and pass a speaking order. Until such speaking order is passed, obviously the AO cannot undertake reassessment. Hence, it is only after the AO passes a speaking order deciding the petitioner's preliminary objections against the notice for reassessment that any cause of action would arise for the petitioner. 2. In, Arvind Mills Ltd. vs. Assistant Commissioner of Wealth Tax (GUJHC) (2004) 270 ITR 0469, it has been held as under :- 9. The position in law is thus well settled. After a notice for reassessment has been issued, an assessee is required to file the return and seek reasons for issuance of such notice. The AO is then bound to supply the reasons within a reasonable time. On receipt of reasons, the assessee is entitled to file (15 of 31) [ITA-292/2016] preliminary objections to issuance of notice and the AO is under a mandate to dispose of such preliminary objections by passing a speaking order, before proceeding with the assessment in respect of the assessment year for which such notice has been issued. 14. In the result, the impugned reassessment order dt. 9th Feb., 2004, made under Section 17 r/w Section 16(3) of the Act is hereby quashed and set aside. The respondent is directed to abide by the directions issued by this Court in its order dt. 3rd March, 2004, in Special Civil Application No. 2736 of 2004 (supra), more particularly, para Nos. 4 and 5 which are reproduced hereunder for the sake of convenience. \"4. The above principle laid down in respect of the notice for reassessment under the IT Act would apply with full force to the notice for reassessment under Section 17 of the WT Act as well. The petitioner company had already filed its return in response to the impugned notice and requested for furnishing reasons, which request has been acceded to only very recently and the petitioner has thereafter submitted its objections on 19th Feb., 2004. The AO is, therefore, now required to dispose of the objections by passing a speaking order as per the aforesaid decision of the Hon'ble Supreme Court. 5. The AO is accordingly required to decide the preliminary objections lodged by the petitioner to the notice for reassessment and pass a speaking order. Until such speaking order is passed, obviously the AO cannot undertake reassessment. Hence, it is only after the AO passes a speaking order deciding the notice for reassessment that any cause of action would arise for the petitioner.\" 3. In MGM Exports vs. Deputy Commissioner of Income Tax, (GUJHC) (2010) 323 ITR 0331, it has been held as under :- 2. The facts in brief are that : for asst. yr. 2001-02 against the returned income of Rs. 28,79,998, the petitioner was assessed on a (16 of 31) [ITA-292/2016] total income of Rs. 93,20,410 under s. 143(3) of the IT Act, 1961 (the Act) on 15th March, 2004. The matter was carried in appeal before CIT(A) and thereafter before the Income-tax Appellate Tribunal (the Tribunal). The Tribunal, by order dt. 27th Feb., 2006, remanded the matter back to the AO to decide the issues afresh after considering the amendments as per Taxation Laws (Amendment) Act, 2005. Accordingly, fresh assessment was framed on 28th Sept., 2006 under s. 143(3) r/w s. 254 of the Act on a total income of Rs. 28,80,000. 4. On behalf of the petitioner attention was invited to the following two decisions of this High Court in the case of Arvind Mills Ltd. vs. Asstt. CWT (2004) 191 CTR (Guj) 233 : (2004) 270 ITR 467 (Guj) and Arvind Mills Ltd. vs. Asstt. CWT (2004) 191 CTR (Guj) 235 : (2004) 270 ITR 469 (Guj) to contend that the respondent was under an obligation to first dispose of the preliminary objections raised by the petitioner and could not have framed the reassessment order. It was also submitted that as held by this Court until such speaking order is passed the respondent obviously cannot undertake reassessment. Learned advocate, therefore, submitted that the petition is required to be allowed on this limited ground. 7. Applying the aforesaid settled legal position to the facts of the case it is apparent that the action of the respondent authority in framing the reassessment order, without first disposing of the preliminary objections raised by the petitioner, cannot be sustained. Accordingly, the reassessment order dt. 16th Dec., 2008 is hereby quashed and set aside and the respondent authority shall dispose of the preliminary objections by passing a speaking order and only thereafter proceed with the reassessment proceedings in accordance with law. Considering the fact that the normal period of limitation, for framing reassessment pursuant to notice dt. 3rd March, 2008 issued under s. 148 of the Act, has already expired on 31st Dec., 2008, in the peculiar facts and circumstances of the case it would serve the ends of justice if the respondent authority is directed to abide by the following schedule : (i) The respondent authority shall dispose of (17 of 31) [ITA-292/2016] the preliminary objections raised by the petitioner within a period of four weeks from today by passing a speaking order in accordance with law; (ii) Thereafter the respondent authority shall undertake reassessment proceedings, if necessary, and shall complete the same within a period of four weeks thereafter, i.e., the date of disposal of the preliminary objections; (iii) No extension of time shall be sought for by either side in the fact situation of the present case; (iv) The aforesaid schedule shall not preclude the rights of the petitioner to challenge the order disposing of the preliminary objections, if the said order is required to be so challenged. 4. In, Pr. Commissioner of Income Tax-2 vs. Sagar Developers (GUJHC) [2016] 72 taxmann.com 321, it has been held as under :- 5. For the purpose of this group of appeals, we frame following common substantial question of law: \"Whether the Income Tax Appellate Tribunal was correct in law in setting aside the order of reassessment which was passed by the Assessing Officer on the ground that before passing such order, the Assessing Officer had not disposed of the objections of the assessee raised pursuant to the decision of Supreme Court in case of GKN Driveshafts (India) Ltd. v. Income Tax Officer and ors reported in 259 ITR 90 without placing the matter back before the Assessing Officer for passing a fresh order, if so needed after disposing of the objections of the assessee.\" 14. In this context, the question arise is, whether if the Assessing Officer defaults in disposing of the objections but proceeds to frame the assessment without so doing, should the reassessment be terminated permanently? In other words, the question is, should the assessment be placed back at a stage where such defect is detected or should the Assessing Officer for all times to (18 of 31) [ITA-292/2016] come be prevented from carrying out his statutory duty and functions? 15. In case of Arvind Mills Ltd. v. Assistant Commissioner of Wealth Tax (supra), as noted, a very similar issue came up for consideration. The Division Bench of the Court, while agreeing that the Assessing Officer could not have framed the assessment without disposing of the objections, by a speaking order provided as under: \"13. There is one more aspect of the matter. The order dated 3rd March, 2004 made by this Court in the earlier petition filed by the present petitioner namely Special Civil Application No. 2736 of 2004 directed the respondent to dispose of the objections filed by the petitioner by passing a speaking order as per the aforesaid decision of the Hon'ble Supreme Court. It is further laid down in the said order that it is only after the Assessing Officer passes a speaking order deciding the petitioner's preliminary objections against the notice for reassessment that any cause of action would arise for the petitioner. This order was served on the respondent on 4th March 2004 and immediately on 5th March 2004, the petitioner was served with a copy of the impugned re-assessment order dated 9th February 2004. The petitioner thereupon preferred a rectification application under Section 35 of the Act requesting the respondent to withdraw the impugned re- assessment order dated 9th February 2004, but, as averred in the petition, till the date of filing of the petition, the respondent has neither called the petitioner for hearing on the application dated 10th March 2004 nor withdrawn the impugned re-assessment order. In the affidavit in reply, the aforesaid averments are dealt with only by reiterating that the objections have been disposed of in the reassessment order itself. The aforesaid conduct of the respondent alongwith the facts stated hereinbefore clearly points out that the stand of the respondent appears to be that once a notice for re-assessment has been made, the respondent is bound to frame an order of re-assessment regardless of the fact as to whether such an order can be supported or not, in law or on facts. 14. In the result, the impugned re- (19 of 31) [ITA-292/2016] assessment order dated 9th February 2004 made under Section 17 read with Section 16(3) of the Act is hereby quashed and set aside. The respondent is directed to abide by the directions issued by this Court in its order dated 3rd March 2004 in Special Civil Application No. 2736 of 2004, more particularly, paragraph Nos. 4 and 5 which are reproduced hereunder for the sake of convenience:-- 15. The above principle laid down in respect of the notice for re-assessment under the Income-tax Act would apply with full force to the notice for re-assessment under Section 17 of the WT Act as well. The petitioner- Company had already filed its return in response to the impugned notice and requested for furnishing reasons, which request has been acceded to only very recently and the petitioner has thereafter submitted its objections on 19.2.2004. The Assessing Officer is, therefore, now required to dispose of the objections by passing a speaking order as per the aforesaid decision of the Hon'ble Supreme Court. 16. The Assessing Officer is accordingly required to decide the preliminary objections lodged by the petitioner to the notice for re- assessment and pass a speaking order. Until such speaking order is passed, obviously the Assessing Officer cannot undertake re- assessment. Hence, it is only after the Assessing Officer passes a speaking order deciding the petitioner's preliminary objections against the notice for reassessment that any cause of action would arise for the petitioner.\" 16. In case of General Motors India P. Ltd. v. DCIT (supra), this Court did strike down the order of assessment which was passed without disposing of the objections. It was provided as under: \"23. From the aforesaid discussion, we are of the considered opinion that writ petition under Article 226 of the Constitution of India is maintainable where no order has been passed by the Assessing Officer deciding the objection filed by the assessee under Section 148 of the Act and assessment order has been passed or the order deciding an (20 of 31) [ITA-292/2016] objection under Section 148 of the Act has not been communicated to the assessee and assessment order has been passed or the objection filed under Section 148 has been decided along with the assessment order. If the objection under Section 148 has been rejected without there being any tangible material available with the Assessing Officer to form an opinion that there is escapement of income from assessment and in absence of reasons having direct link with the formation of the belief, the writ Court under Article 226 can quash the notice issued under Section 148 of the Act. The writ petition filed by the petitioner is maintainable. The Assessing Officer is mandated to decide the objection to the notice under Section 148 and supply or communicate it to the assessee. The assessee gets an opportunity to challenge the order in a writ petition. Thereafter, the Assessing Officer may pass the reassessment order. We hold that it was not open to the Assessing Officer to decide the objection to notice under section 148 by a composite assessment order. The Assessing Officer was required to, first decide the objection of the assessee filed under section 148 and serve a copy of the order on assessee. And after giving some reasonable time to the assessee for challenging his order, it was open to him to pass an assessment order. This was not done by the Assessing Officer, therefore, the order on the objection to the notice under section 148 and the assessment order passed under the Act deserves to be quashed.\" 17. Two things emerge from this judgment. Firstly, that the question whether after striking down the order of assessment on this ground further assessment should be permitted or not, was neither argued nor addressed by the Court. Second aspect is that, in case of General Motors India P. Ltd. v. DCIT (supra), the Court noticed the judgment of Division Bench of Arvind Mills Ltd. v. Assistant Commissioner of Wealth Tax reported in : 270 ITR 469 in which, the Division Bench had, under somewhat similar circumstances, while setting aside the order of reassessment, required the Assessing Officer to dispose of the objections and only thereafter, proceed to pass the order of reassessment. (21 of 31) [ITA-292/2016] 18. It can thus be seen that two Division Benches of the Court have taken somewhat different routes in similar backdrop. In case of General Motors India P. Ltd. v. DCIT (supra), the Court, without laying down the ratio, struck down the order of assessment without any further facility to the Assessing Officer to dispose of the objections and then to proceed to reassess the income of the assessee. In case of Arvind Mills Ltd. v. Assistant Commissioner of Wealth Tax (supra) again the Court had, without laying down the ratio, enabled the Assessing Officer to dispose of the objections and till then prevented him from passing fresh order of assessment. What should, therefore, be the correct legal position when the Court strikes down the order of assessment only on this ground has not been opined by either of the two Division Benches in the said cases. 24. It can thus be seen that whenever an administrative action is found to be tainted with defect in the nature of breach of natural justice or the like, the Court would set aside the order, place back the proceedings at the stage where the defect is detected and leave the liberty to the competent authority to proceed further from such stage after having the defect rectified. In other words, the breach of principle of natural justice would ordinarily not result in terminating the proceedings permanently. 25. As noted, the requirement of supplying the reasons recorded by the Assessing Officer issuing notice for reopening and permitting the assessee to raise objections and to decide the same by a speaking order are not part of the statutory provisions contained in the Act. Such requirements have been created under a judgment of the Supreme Court in case of GKN Driveshafts (India) Ltd. v. Income Tax Officer and ors (supra). It is true that when the Assessing Officer proceeds to pass the final order of assessment without disposing of the objections raised by the assessee, he effectively deprives the assessee of an opportunity to question the notice for reopening itself. However, the assessee is not left without the remedy when the Assessing Officer proceeds further with the assessment without disposing of the objections. Even (22 of 31) [ITA-292/2016] before the final order of assessment is passed it would always be open for the assessee to make a grievance before the High Court and to prevent the Assessing Officer from finalizing the assessment without disposing of the objections. 26. The issue can be looked from slightly different angle. Validity of the notice for reopening would depend on the reasons recorded by the Assessing Officer for doing so. Similarly, the order of reassessment would stand failed on the merits of the order that the Assessing Officer has passed. Neither the action of the Assessing Officer of supplying reasons to the assessee nor his order disposing of the objections if raised by the assessee would per se have a direct relation to the legality of the notice of reopening or of the order of assessment. To declare the order of assessment illegal and to permanently prevent the Assessing Officer from passing any fresh order of assessment, merely on the ground that the Assessing Officer did not dispose of the objections before passing the order of assessment, in our opinion would be not the correct reading of the judgment of Supreme Court in case of GKN Driveshafts (India) Ltd. v. Income Tax Officer and ors (supra). In such judgment, it is neither so provided nor we think the Supreme Court envisaged such an eventuality. 27. In the result, the question is answered in favour of the Revenue. The impugned respective judgments of the Tribunal would stand modified by providing that the respective orders of assessment though should stand set aside it would be open for the Assessing Officer to frame fresh assessment after first disposing of the objections of the assessees. Needless to clarify the provisions for time limit for framing the assessment as may be applicable would apply. 5. In Simaben Vinodrai Ravani vs. Income Tax Officer (GUJHC) [2017] 394 ITR 778 it has been held as under :- 6.1 In a subsequent decision in the case of Garden Finance Ltd. v. Asstt. CIT reported in : (2004) 268 ITR 48 (Guj.) (FB), the effect (23 of 31) [ITA-292/2016] of Supreme Court decision in the case of G.K.N. Driveshaft (India) Ltd. (Supra) came up for consideration and by a majority opinion it has been thus laid down by this Court as under: \"What the Supreme Court has now done in the G.K.N. Case : (2003) 259 ITR 19 is not to whittle down the principle laid down by the Constitution Bench of the Apex Court in Calcutta Discount Co. Ltd. case : (1961) 41 ITR 191 but to require the assessee first to lodge preliminary objection before the Assessing Officer who is bound to decide the preliminary objections to issuance of the re- assessment notice by passing a speaking order and, therefore, if such order on the preliminary objections is still against the assessee, the assessee will get an opportunity to challenge the same by filing a writ petition so that he does not have to wait till completion of the re-assessment proceedings which would have entailed the liability to pay tax and interest on re- assessment and also to go through the gamut of appeal, the second appeal before Income-tax Appellate Tribunal and then reference/tax appeal to the High Court. Viewed in this light, it appears to me that the rigour of availing of the alternative remedy before the Assessing Officer for objecting to the reassessment notice under section 148 has been considerably softened by the Apex Court in G.K.N. case : (2003) 259 ITR 19 in the year 2003. In my view, therefore, the G.K.N. case: (2003) 259 ITR 19 (SC) does not run counter to the Calcutta Discount Co. Ltd. case : (1961) 41 ITR 191 (SC) but it merely provides for challenge to the re- assessment notice in two stages, that is,- i) raising preliminary objections before the Assessing Officer and in case of failure before the Assessing Officer, ii) challenging the speaking order of the Assessing Officer under section 148 of the Act (p. 87).\" 6.2 In the case of Arvind Mills Ltd. (Supra), in para 9, the Division Bench after considering the decision of the Hon'ble Supreme Court in the case of G.K.N. (24 of 31) [ITA-292/2016] Driveshafts (India) Ltd. (Supra) and the Garden Finance Ltd. (Supra) has observed and held as under: \"9. The position in law is thus well settled. After a notice for reassessment has been issued an assessee is required to file the return and seek reasons for issuance of such notice. The Assessing Officer is then bound to supply the reasons within a reasonable time. On receipt of reasons, the assessee is entitled to file preliminary objections to issuance of notice and the Assessing Officer is under a mandate to dispose of such preliminary objections by passing a speaking order, before proceeding with the assessment in respect of the assessment year for which such notice has been issued.\" 6.3 Identical question came to be considered by the Division Bench of this Court in the case of Banaskantha District Oilseeds Growers Co-op Union Ltd. vs. ACIT rendered in Special Civil Application No. 7813/2015 and considering the decisions of the Hon'ble Supreme Court and this Court, the Division Bench of this Court quashed and set aside the reassessment order which was passed without disposing of the objections raised by the assessee. 7. In view of the above and for the reasons stated above, present Special Civil Application succeeds in part. Impugned assessment order dated 30.12.2016 passed by the Assessing Officer is hereby quashed and set aside. Consequently, the demand notice dated 30.12.2016 is also quashed and set aside. The matter is remitted to the file of the Assessing Officer at the stage of submitting the objections by the petitioner against the reopening of the assessment for A.Y. 2009-10. The Assessing Officer now to deal with and dispose of the objections raised by the petitioner on 24.11.2016 and pass a speaking order, before proceeding with the reassessment in respect of the assessment year for which such notice has been issued and communicate the outcome of the same and thereafter after giving some reasonable time to the petitioner to challenge the decision dispose of the objections (in case the Assessing Officer over-rules the objections raised by the petitioner by a (25 of 31) [ITA-292/2016] speaking order). He may proceed further with the reassessment proceedings in respect of AY for which such notice has been issued. The Assessing Officer to give reasonable time to the petitioner which shall not be less than two months from the date of disposing of the objections (in case the Assessing Officer over-rules the objections raised by the petitioner by a speaking order). However, it is made clear that we have not expressed anything on merits and the impugned assessment order has been set aside solely on the aforesaid ground and for the reasons stated above. Rule made absolute to the aforesaid extent. In the facts and circumstances of the case, more particularly when the Assessing Officer has not followed the binding decisions of the Hon'ble Supreme Court as well as Full Bench and Division Bench of this Court referred to hereinabove and has passed the reassessment order without dealing with and/or disposing of the objections raised by the petitioner, the petition is allowed with cost which is quantified at Rs. 5000/-, which shall be deposited by the concerned Officer with the Registry of this Court, within a period of 3 weeks from today. On such deposit the Registry is directed to transmit the same to Gujarat State Legal Services Authority. 6. In Pr. Commissioner of Income Tax vs. Modinagar Rolls Ltd. (ALLHC) (2017) 99 CCH 0030, it has been held as under :- 23. There is no finding by the tribunal for holding the notice to be bad or illegal except for the fact that the objections of assessee filed against it were not decided. In view of the fact that the objections were not considered and decided and that no illegality in the notice was established, the tribunal erred in holding the notice to be bad. 24. The discussion above permits us to answer the second question partly in favour of the assessee and partly in favour of revenue and it is held that as the objections of the assessee respondent were left undecided the reassessment could not have been done and as such the tribunal has not erred in setting aside the order of assessment but the notice issued under (26 of 31) [ITA-292/2016] Section 148 of the Act cannot be said to be illegal and bad in law without recording finding that it is contrary to law. This aspect has to be dealt with by the tribunal before passing a fresh order of reassessment. 25. In view of the answer to the above two questions, it is premature to deal with the third question. It would be considered during the reassessment proceedings if the notice is found to be legal. 26. Accordingly, the appeals are partly allowed and the Assessing Authority is directed to consider and decide the objections of the respondent assessee on merits in accordance with law and then if necessary proceed with the reassessment proceedings. The order of the tribunal setting aside the reassessment order is maintained. 7. In Keshav Shares & Stocks LTd. vs. ITO & ORs., (2010) 326 ITR 553, it has been held as under :- 8. For not following the law laid down by the Supreme Court and stressed by this Court, we impose costs upon the respondent of a sum of Rs. 3,500 to be paid to the petitioner. The costs be paid within a period of four weeks from today.\" 11. The decision cited by the learned counsel for the Revenue in the case of Asstt. CIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) does not, in any way, enable us to detract from the position indicated above and especially the directions given by the Supreme Court in GKN Driveshafts (India) Ltd. (supra). The decision in Rajesh Jhaveri (supra) was not concerned with the procedure to be adopted by the AO for passing a speaking order before proceeding with the assessment. In fact, the decision in GKN Driveshafts (India) Ltd. (supra) has not even been noticed in Rajesh Jhaveri’s case (supra) apparently, because the issue of procedure did not at all arise in Rajesh Jhaveri’s case (supra). Consequently, the latter decision would have no application to the facts and circumstances of the present case. 12. In view of the foregoing discussion, we (27 of 31) [ITA-292/2016] set aside the assessment order dt. 28th Dec., 2007 and direct the AO to pass a speaking order on the objection as taken in the letter dt. 17th Sept., 2007, and to proceed with the assessment only thereafter. 8. In SAK Industries (P.) Ltd. Vs. Deputy Commissioner of Income Tax, [2012] 19 Taxmann.com 237 (Delhi), It has been held as under:- 14. We are informed that the Assessing Officer, i.e. respondent No.1, has now changed. The Assessing Officer will now pass a fresh order on the objections raised by the petitioner in terms of direction issued by the Supreme Court in GKN Driveshafts (India) Ltd. (supra). The petitioner will appear before the Assessing Officer on 5th March, 2012. When a date of hearing will be fixed and an order disposing of the objections will be passed on or before 16th March, 2012. In case of an adverse order, the Assessing Officer shall give 15 days time to the petitioner to take further steps, in accordance with law, and fix the next date of hearing accordingly. The learned counsel for the petitioner submits that they will not raise any objection with regard to the limitation period and a time period may be fixed for passing the re- assessment order. Keeping in view of the aforesaid facts, it is directed that it will be open to the Assessing Officer to thereafter proceed with the assessment and pass a re- assessment order on or before 15th May, 2012. The assessee must fully co-operate in the proceedings. The concerned Commissioner will examine the reassessment file in the present case and is at liberty to take appropriate action, if warranted. 9. In Home Finders Housing Limited vs. The Income Tax Officer, Corporate Ward 2(3) (MADHC), it has been held as under :- 15. An order passed within the period of limitation can always be questioned before the Court of law by raising very many grounds touching upon the merits of the matter. Upon considering those grounds, if the Court comes to a conclusion to set aside the impugned order and remit the matter back to the authority for passing a fresh order, depending upon the facts and circumstances of each case, it can do so. In (28 of 31) [ITA-292/2016] view of such remand, as the parties are reverted back to their original position as existed prior to the impugned order, it cannot be said that the court is extending the period of limitation. If such construction or interpretation is accepted, no fresh order of assessment can ever be made in respect of cases remitted by the Court where the limitation for passing the orders prescribed under the statute has already expired. Needless to say that prescription of statutory period of limitation is for the concerned authority to perform a particular act within such time limit. If he has acted within such prescribed time and passed an order, the statutory obligation vested on such authority, insofar as the period of limitation is concerned, is deemed to have been discharged. His order, so passed within time, may be right or wrong. Still it is an order passed within time. The person aggrieved against such an order is entitled to challenge the same before the appropriate forum, in a manner known to law. If any such challenge is made, such Forum has to look into the other aspects of the matter and the objections raised by the person so aggrieved, in order to come to a conclusion on the question whether to sustain the order or to set aside the same. If for some reasons such Forum chooses to set aside, it is open to such Forum to remit the matter back to the Original Authority for redoing the exercise once again. At that point of time, certainly, the question of considering the limitation does not arise, as such forum is not granting time to pass the original order itself beyond the period of limitation and on the other hand, it is an order empowering the original authority to redo their exercise. Certainly, there is a vast difference between the stage and circumstances of the exercise of power \"to do\" and \"redo\". When the power \"to do\" is certainly to be exercised within the statutory period of limitation, the power to \"redo\" such exercise does not fall under the purview of limitation once again. Hence, I reject the contention of the petitioner on this aspect. 20. Considering all these aspects, I am of the view that the matter has to go back to the respondent for passing a speaking order on the objections and thereafter, to pass the (29 of 31) [ITA-292/2016] final order of assessment. Accordingly, the writ petition is allowed and the impugned order of assessment is set aside and the matter is remitted back to the respondent to pass a speaking order on the objections raised by the petitioner, after giving an opportunity of hearing to them. Such exercise shall be done by the respondent within a period of four weeks from the date of receipt of a copy of this order. Thereafter, it is open to the respondent to pass the final order on merits and in accordance with law within a period of four weeks. No costs. Consequently, connected miscellaneous petitions are closed. 10. In R.K. Sawhney, Executor of The Estate of Late R.B. Nathu Ram vs. Commissioner of Income Tax, Delhi-II (DELHC) (1987) 166 ITR 0128, it has been held as under :- 8. Counsel submitted that at least the question whether the assessment dated September 10, 1979, is barred by limitation should be directed to be referred. We are unable to isolate this question for the reasons already mentioned. If the assessed is precluded from questioning the validity of the direction given by the Tribunal, then obviously the provisions of section 153(3) apply and no question of limitation arises. In this context, we may point out that, in similar circumstances, in Jajodia's case, : [1971]79ITR505(SC) , it was held that second proviso to section 34(3) of the 1922 Act (corresponding to section 153(3) of the 1961 Act) would apply and there would be no limitation for the making of a reassessment in pursuance of the direction given in such circumstances. This question, Therefore, is not, only not open to the assessed to urgent the present stage but it is also concluded by a decision of the Supreme Court. 11. Banaskantha District Oilseeds Growers Co-op. Union Ltd. vs. Assistant Commisioner of Income Tax, (GUJHC) [2015] 59 taxmann.com 328 12. Agarwal Metals & Alloys vs. Assistant Commissioner of Income Tax, (BOM)[2012] 346 ITR 64.. (30 of 31) [ITA-292/2016] 6. He contended that in all the cases relied upon the Department, the matter was remitted back and if the contention raised by the assessee is accepted, in no case of Section 153, the matter could be remanded. 7. We have heard the counsel for the parties. 8. Before proceeding with the matter, it is not out of place to mention that the law declared by the Supreme Court in GKN Driveshafts (supra) clearly held that the preliminary objection is to be decided as the first, it cannot be decided subsequently. The argument which has been canvassed by the assessee is required to be considered very seriously more particularly in view of the observations made by the Supreme Court in the case of KSS Petron Private Ltd (supra) which is followed in Hotel Blue Moon (supra), the law declared by the Supreme Court is taken in true spirit whether it will open a second inning in his own. Section 153(3) is to be read very cautiously as 153 powers are given to the Department, the Court has to look into whether the law declared by the Supreme Court is given away or protected. In the present case, as the Assessing Officer has clearly ignored the law declared by the Supreme Court, in that view of the matter, the issues which are raised in the matter, the Tribunal ought not to have remitted back for reassessment since period of limitation has already expired as the authority will get extended time of limitation beyond 9 months which is not the object of the Income Tax Act. (31 of 31) [ITA-292/2016] 9. In that view of the matter, on issue No. 1 and 2, the order of reassessment passed by the Tribunal is declared null and void. The questions are answered in favour of assessee and against the Department. 10. The appeal of the assessee is allowed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. Bmg 22. "