SOMATHEERAM MYURVEDIC BEACH RESORT (P) V. THE ASSISTANT COMMISSIONR OF INCOME TAX

WP(C)/3461/2010

AI Insights

The case involves Somatheeram Ayurvedic Beach Resort (P) Ltd., which challenged the assessment orders passed by the Assistant Commissioner of Income Tax under Sections 143(3) and 147 of the Income Tax Act. The main contention was the non-compliance with the procedural mandates set by the Supreme Court in GKN Drive Shafts V. Income Tax Officer, which requires the Assessing Officer to furnish reasons for reopening an assessment and to dispose of any objections by passing a 'speaking order'. The Department argued that there was substantial compliance with these directives. The court found that the assessment order did not clearly reflect compliance with the Supreme Court's mandates and thus allowed the petitioners to appeal the decision.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 756051 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 06-04-2010
• Assessment Year: misc
• Other Referred Cases: GKN Drive Shafts V. Income Tax Officer & others (259 ITR 19)
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: RAMESH JOHN
• Keywords: Assessment Order; Income Tax; Section 143(3); Section 147; Section 148; GKN Drive Shafts V. Income Tax Officer
• Section: 147; 148; 143(3)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 6TH APRIL 2010 / 16TH CHAITHRA 1932 WP(C).No. 3461 of 2010(G) ------------------------- PETITIONER: ---------------- SOMATHEERAM AYURVEDIC BEACH RESORT (P) LTD. CHOWARA P.O., BALARAMAPURAM THIRUVANANTHAPURAM, REP.BY ITS CHAIRMAN MR.BABY MATHEW. BY ADV. SRI.RAMESH CHERIAN JOHN RESPONDENTS: --------------- 1. ASSISTANT COMMISSIONR OF INCOME TAX, CENTRAL CIRCLE-I, THIRUVANANTHAPURAM. 2. DEPUTY COMMISSIONR OF INCOME TAX, CENTRAL CIRCLE I, THIRUVANANTHAPURAM. ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06/04/2010, ALONG WITH WPC NO. 5064 OF 2010 WPC NO. 5077 OF 2010 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMACHANDRA MENON, J ------------------------------------------ W.P(C) Nos.3461/2010, 5064/2010 & 5077/2010 ------------------------------------------- Dated this the 6th day of April, 2010. J U D G M E N T The petitioners in these cases are challenging Ext.P4 assessment orders passed by the first respondent under Section 143 (3), read with Section 147 of the Income Tax Act. The main ground of challenge is that the proceedings have been finalised by the said respondent without any regard to the clear mandate given by the Apex Court as per the decision in GKN Drive Shafts V. Income Tax Officer & others (259 ITR 19), whereby it has been held that, when a notice under Section 148 is issued, it is for the addressee to file a return and if he so desires, to seek reasons for issuing the notice; that the Assessing officer is bound to furnish reasons within a reasonable time; on receipt of which, the addressee is entitled to file objections and that the Assessing Officer is bound to dispose of the same by passing a 'speaking order'; which course is stated as not followed by the first respondent. 2. The learned standing counsel appearing for the Department submits that the averments and allegations raised in W.P(C) Nos.3461/2010, 5064/2010 & 5077/2010 2 the Writ Petition are devoid of any merit or bonafides. The assessee, on receipt of notice under Section 148, requested to treat the return filed originally, as the return in response to the notice under Section 148 and sought for reasons for reopening the assessment. Subsequently, notice under Section 143(2) was issued; whereupon, the authorised representative of the petitioner/assessee turned up before the concerned authority and there was a detailed discussion during the course of which, the reasons were let known to the assessee, pursuant to which, a detailed objection was also filed. It was thereafter, that the assessment was finalised as per Ext.P4 and since there is substantial compliance with the direction given by the Apex Court, no interference is warranted in these Writ Petitions; submits the learned standing counsel. 3. On going through Ext.P4 assessment order, the factual position as to the sequence of events, as narrated from the part of the respondents in the statement filed in W.P(C) No.3461 of 2010 is not seen referred to. It is not discernible from Ext.P4, whether the course stated as pursued by the Departmental Authorities W.P(C) Nos.3461/2010, 5064/2010 & 5077/2010 3 substantially complying with the mandate given by the Apex Court is satisfied or not; which can be ascertained only from the contents of the relevant file. This Court finds that the matter can be caused to be considered by the appellate authority; particularly when the petitioners are having an effective alternate remedy, by way of appeal. 4. In the above circumstances, the petitioners are permitted to pursue the alternate remedy by way of appeal, along with interlocutory applications for stay and if the petitioners file the proceedings as above within two weeks; the same shall be treated as valid appeals filed on time. The appellate authority shall consider the I.As if any, taking note of the specific contentions and appropriate orders shall be passed thereon, in accordance with law particularly law declared by the Apex Court in the decision cited supra, which shall be done after hearing the petitioners, as expeditiously as possible at any rate within 'six weeks' from the date of receipt of a copy of this judgment. It is made clear that, till appropriate orders are passed on the interlocutory applications for stay, all further coercive proceedings shall be kept in abeyance. It is W.P(C) Nos.3461/2010, 5064/2010 & 5077/2010 4 open for the appellate authority to consider the appeals themselves on merits, within the time as specified above. The Writ Petitions are disposed of. Sd/- P.R.RAMACHANDRA MENON JUDGE //True Copy// P.A to Judge ab "