Allana Cold Storage Ltd. vs Income-Tax Officer And Ors.
2006 Latest Caselaw 959 Bom

JUDGMENT

1. All these four petitions are filed by companies which are sister concerns. They are all about the assessment orders passed by the first respondent-Income-tax Officer for the assessment year 2001-02. Rule on petitions. Reply has been filed by the first respondent. By consent of counsel for both the parties, the petitions are heard and decided at the admission stage itself.

2. The principal grievance of the petitioners is based on the judgment of the apex court in the case of GKN Driveshafts (India) Ltd. v. ITO reported in [2003] 259 ITR 19. The law laid down by the apex court in this judgment is that when a notice under Section 148 of the Income-tax Act is issued, the noticee is expected to file the return and if he so desires he may seek reasons for issuing the notice. The apex court has laid down that on the assessee seeking such reason, "the Assessing Officer is bound to furnish the reasons within a reasonable time". Thereafter, the apex court has added that on receipt of reasons, the noticee is entitled to file objections and the Assessing Officer is bound to dispose of the same by passing a speaking order.

3. In the first matter, i.e., Writ Petition No. 2234 of 2006 filed by Allana Cold Storage Limited, the notice to reopen the assessment dated March 18, 2005, was served on the petitioner on March 22, 2005. The petitioner wrote letters seeking copy of reasons from time to time. These reasons were not supplied in response to these letters dated March 31, 2005, and April 8, 2005. Instead a notice under Section 143(2) was issued on July 29, 2005. The petitioners again requested for the reasons on August 17, 2005, in response to which another notice under Section 143(2) was served on December 21, 2005. Again the petitioners sought reasons by letter dated December 30, 2005, and once again a notice under Section 143(2) was served on February 21, 2006. Thus, the first respondent though aware of the fact that the petitioners were seeking reasons for reopening the assessment has not supplied the reasons. This went on until March 21, 2006, when practically at the end of the assessment year the reasons were furnished. The petitioner filed their objections on March 23, 2006, and requested for personal hearing. What the first respondent has done is that he straightway passed the assessment order under Section 143(3) which also includes the decision on the objections filed by the petitioners.

4. Similar is the state of affairs in the next three petitions, i.e., Writ Petition Nos. 2235 of 2006, 2236 of 2006 and 2237 of 2006. We may however add that in these three matters the first respondent gave the reasons on August 22, 2005, and the petitioners filed their objections on September 9, 2005. In Writ Petitions Nos. 2235 and 2236 of 2006 what we find that similarly a common order of assessment and decision on the objections is passed whereas in the fourth matter, i.e., Writ Petition No. 2237 of 2006 straightway the assessment order is passed but no decision is given on the objections filed by the petitioners.

5. We may add at this stage that in the earlier two assessment years concerning this very petitioner, i.e., the assessment years 1999-2000 and 2000-01 similar developments had taken place and there the Revenue was fair enough to accept that the assessment order be set aside and the order was sought in terms of minutes whereby the assessment orders were set aside and the Assessing Officer was directed to dispose of the objections by passing a speaking order.

6. Mr. Dastoor, learned senior counsel appearing for the petitioners submits that thus the officer concerned was fully aware of the law laid down by the apex court and there is no reason why as far as this assessment year is concerned, he adopted this course, viz., to pass a common order on the objections and assessment in the first matter, not to pass any order on the objections in the fourth matter and to pass a delayed order on the objections in the second and third matters. What has further happened is that the petitioners have chosen to file appeals to the Commissioner of Income-tax (Appeals). They have been filed on 24th April, 2006. Mr. Chatterji, learned Counsel appearing for the Revenue, therefore, submits that when the petitioners have availed of the remedy under the statute, this Court ought not to interfere assuming that there was an error on the part of the officer concerned.

7. We have noted the submissions of both counsel. The law as laid down by the apex court is binding on this Court as well as on the authorities functioning under the statute. This being the position, we fail to understand as to why the first respondent did not decide the objections separately which he is duty bound to decide. The whole idea in laying down the law in the abovereferred judgment of the apex court is to give an opportunity to the assessee to know as to what is the decision on his objections, which decision has also to be arrived at after giving an opportunity to the assessee. In the present case, the assessee has been denied this opportunity. Not only that but in the first three writ petitions what we find is that a common order has been passed on the objections as well as for the reassessment. In the fourth matter, the assessment order does not disclose any decision on the objections at all and undoubtedly no such decision has been given separately on the objections.

8. Having noted this scenario, in our view the proper course will be to interfere with the assessment orders passed in all four matters by the concerned officer. We are aware that when an alternative remedy is resorted to, the writ jurisdiction is not to be exercised, but that is a rule of self-limitation. The orders challenged in the present matter are clearly against the law laid down by the apex court and, therefore, the exercise of writ jurisdiction is called for. That being so, we allow all these petitions and quash and set aside the orders of assessment passed in all these four petitions. Inasmuch as the assessment orders are set aside, the appeals filed by the petitioners no longer require to be prosecuted. The same will stand disposed of.

9. Now that the impugned orders are set aside, the first respondent, after hearing the petitioners, will pass separate speaking orders on the objections which the petitioners have filed. We further add that in the event the objections are rejected, the assessment order will not be passed for a period of four weeks thereafter.

10. All contentions of both the parties are kept open. We further clarify that this order does not mean any reflection on the impugned orders on the merits.

11. Rule made absolute in terms of this order with no order as to costs.