THE HIGH COURT BAR ASSOCIATION ALLAHABAD V. UNION OF INDIA AND 5 OTHERS

WTAX/353/2021

AI Insights

The case involves the High Court Bar Association Allahabad challenging a reassessment notice issued by the Union of India for the assessment year 2016-17. The primary contention was the jurisdictional validity of the reassessment proceedings. However, the court focused on the procedural aspects, directing the petitioner to file a return and objections to the reassessment notice, which would then be addressed by the assessing authority in a structured manner. This approach was influenced by the precedent set in GKN Driveshafts (India) Limited Vs. Income Tax Officer, which emphasized the need for a reasoned response to objections raised against reassessment notices.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 736858 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 09-09-2021
• Assessment Year: misc
• Other Referred Cases: GKN Driveshafts (India) Limited Vs. Income Tax Officer and others (2003) 259 ITR 19
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: A S G I; GAURAV MAHAJAN
• Assessee Lawyers: AJAY SINGH; RAMANUJ TIWARI
• Keywords: Jurisdictional challenge; Notice; Objections; Re-assessment proceeding; Reason to believe; Speaking order
• Section: 148; 143(2)

Judgement Text

"Court No. - 3 Case :- WRIT TAX No. - 353 of 2021 Petitioner :- The High Court Bar Association Allahabad Respondent :- Union Of India And 5 Others Counsel for Petitioner :- Ajay Singh,Ramanuj Tiwari Counsel for Respondent :- A.S.G.I.,Gaurav Mahajan Hon'ble Naheed Ara Moonis,J. Hon'ble Saumitra Dayal Singh,J. 1. Heard Sri Rakesh Ranjan Agrawal, Sri Amrendra Nath Singh, learned Senior Advocates with Sri Prabha Shankar Mishra, Sri Vinay Kumar Tiwari, Sri Anil Pathak, Sri Ramanuj Tiwari, Sri Amitabh Agrawal and Sri Ajit Kumar, learned Advocates, for the petitioner and; Sri Gaurav Mahajan and Sri Manu Ghildyal, learned counsel for the revenue and Sri Krishna Agarwal, learned counsel for the union of India. 2. Challenge has been raised to the re-assessment proceeding for A.Y. 2016-17 vide reassessment notice dated 28.03.2021. While challenge has been raised on jurisdictional ground, it is undisputed that, at present, the petitioner has neither filed it's return in response to the notice nor it has been supplied copy of the reason to believe recorded by the assessing authority to initiate a reassessment proceeding nor has the petitioner filed any objections before the assessing authority. In GKN Driveshafts (India) Limited Vs. Income Tax Officer and others reported in (2003) 259 ITR 19 Supreme Court has observed as under:- \"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. Mr. M.L. Verma, learned senior counsel appearing for the appellant, submits that the impunged 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 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.\" 3. In view of the above, no useful purpose would be served in attempting to deal with the issue as the reason to believe is yet not on record. 4. Accordingly, the writ petition is disposed of with the following directions: (i) the petitioner shall file a return and response to the notice dated 28.03.2021, within a period of one month; (ii) upon that return being filed, the petitioner's assessing authority shall make available to the petitioner, a copy of the reason to believe, if any, recorded by that authority before issuing the reassessment notice, within one week; (iii) upon such reason to believe being made available to the petitioner, it may file its written objection thereto, within a period of two weeks; (iv) upon such written objection being filed, the assessing authority may give an opportunity of hearing to the petitioner and pass a reasoned order on the objection so filed, within a further period of four weeks and serve a copy of the order on the petitioner; (v) the reassessment proceeding, if any, may be continued only in accordance with the order passed by the assessing authority. Order Date :- 9.9.2021 S.Chaurasia Digitally signed by NAHEED ARA MOONIS Date: 2021.09.09 17:28:09 IST Reason: Document Owner Location: High Court of Judicature at Allahabad Digitally signed by SAUMITRA DAYAL SINGH Date: 2021.09.09 17:28:53 IST Reason: Document Owner Location: High Court of Judicature at Allahabad "