Saroj Jalan vs Union Of India & Ors
2022 Latest Caselaw 4380 Cal

19.07.2022.
   p.b.
 Sl. No.9.

                          W.P.A. 15188 of 2022


                       Saroj Jalan
                            Vs.
                   Union of India & Ors.


              Mr. Avra Mazumder,
              Mr. Binayak Gupta,
              Ms. Megha Agarwal.
                              ........for the petitioner.
              Mr. Soumen Bhattacharji.
                              .........for the respondent.

Heard learned advocates appearing for the parties.

By this writ petition, petitioner has challenged the

impugned assessment order dated 31st March, 2022 under

Section 147 read with Section 144B of the Income Tax Act,

1961 relating to the assessment year 2014-15, on the

ground that there is violation of the law laid down by the

Hon'ble Supreme Court in the case of GKN Driveshaft

reported in 259 ITR 19 while passing the impugned

assessment order. It appears from record that the

aforesaid impugned assessment order has been passed on

the basis of a notice dated 31st March, 2021 under Section

148 of the Income Tax Act, 1961. It appears from record

that against the aforesaid notice under Section 148 of the

Act, petitioner had filed an objection to the same on 8th

July, 2021 after receiving the recorded reason. It is the

case of the petitioner that without considering and

disposing his aforesaid objection, the impugned

assessment order has been passed while it is binding upon

the assessing officer in view of the aforesaid decision of the

Hon'ble Supreme Court in the case of GKN Driveshaft

(supra) to first dispose of the objection of an assessee

against the notice under Section 148 of the Act by passing

a speaking order before proceeding further with the

impugned reassessment proceeding.

Mr. Mazumder, learned advocate appearing for the

petitioner in support of his contention and on the

proposition of law that any reassessment order passed

without disposing the objection of an assessee by passing

a speaking order against notice under Section 148 of the

Act is bad in law and is in clear violation of the law laid

down by the Hon'ble Supreme Court in the case of GKN

Driveshafts (supra), has relied on the decision in the case

of IOT Infrastructure And Energy Services Ltd. Vs.

Assistant Commissioner of Income Tax reported in 2010

(3) TMI 706 Bombay High Court and particularly on

paragraph 3 of the said decision which is quoted

hereunder:-

"During the course of the hearing of these

proceedings, counsel appearing on behalf of the Revenue

has fairly stated on instructions of the Assessing Officer

who is present in the court that the direction contained in

the judgment of the Supreme Court in GKN Driveshaft

(India) Ltd. (2003) 259 ITR 19 were not complied with. In

our view, there is absolutely no or justification for the

Assessing Officer not to deal with the objections filed by

the assessee to the reopening of the assessment

particularly in view of the binding principle of law laid

down by the Supreme Court in that regard. In the

circumstances, during the course of the hearing, we have

suggested to the learned counsel that it would be

appropriate for this court to set aside the order of

reassessment dated December 23, 2009 and the noting by

the Assessing Officer dated December 21, 2009 disposing

of the objections and to remit the proceedings back to the

Assessing Officer. Counsel appearing on behalf of the

assessee has no objection thereto."

Mr. Mazumder also relies on this proposition of law

on a decision of the Hon'ble Madras High Court in the case

of M/s. Jayanthi Natarajan Vs. Assistant Commissioner of

Income Tax reported in 2017 (9) TM 1042 Madras High

Court particularly on paragraphs 15 and 17 of the said

judgment which are quoted hereunder:-

"15. - In some what similar circumstances, the

Division Bench of the Bombay High Court in KSS Petron

Private Ltd. (supra), held that the Assessing Officer was

not justified in finalizing the assessment without having

first disposed of the objections of the assessee. While

testing the correctness of the decision of the CIT (Appeals),

which quashed the order of the Assessing Officer restored

the assessment to the Assessing Officer to pass fresh

orders after disposing of the objections to reopening notice

in accordance with law, the Division Bench held that once

the impugned order finds the assessment order is without

jurisdiction, as the law laid down by the Apex Court in the

case GKN Driveshafts (India) Ltd. (supra), has not been

followed, then there is no reason to restore the issue to the

Assessing Officer to pass fresh/further orders and if this is

permitted, it would give license to the Assessing Officer to

pass orders on reopening notice, without jurisdiction

(without compliance of the law in accordance with the

procedure). Further it was pointed out that to ensure that

the reopening notices are disposed of expeditiously, the

Parliament itself has provided in Section 153(2) of the Act,

the period within which the Assessing Officer must pass

orders on notice of reopening (i.e.) within one year from the

end of the financial year, in which the notice was issued.

Thus, on facts having found that the procedure required to

be followed had not been adhered to, it has to be held that

the entire proceedings are vitiated."

"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 Vs. State of Punjab reported in (1995) 6 SCC 614

and Nair Services Society Vs. State of Kerala reported in

(2007) 4 SCC 1)."

Mr. Bhattacharji, learned advocate appearing for the

respondent income tax authority, by the order of this

Court dated 15th July, 2022, was asked to produce the

record to establish as to whether the impugned

assessment order and the aforesaid objection of the

petitioner against notice under Section 148 of the Act was

considered and disposed of or not to which Mr.

Bhattacharjee could not produce any specific record to

show that before passing the impugned assessment order

the aforesaid objection of the petitioner dated 8th July,

2021 was considered and disposed of. It is highly

unfortunate that the assessing officer concerned through

Mr. Bhattacharjee has produced irrelevant record in total

non-application of mind since those documents have no

relevance to the queries asked by this Court by the order

dated 15th July, 2022.

Considering the facts and circumstances of this case

as appears from record and submission of the parties and

the aforesaid judgments relied upon by the petitioner, I am

of the considered view that the impugned assessment

order dated 31st March, 2022 being Annexure P-11 to the

writ petition passed is in clear violation of the law laid

down by the Hon'ble Supreme Court in the case of GKN

Driveshafts (India) Ltd. (supra) and the same is not

sustainable in law since it was passed without considering

and disposing objection of the petitioner by passing a

speaking order which he was obliged to do in view of the

decision of the Apex Court in the case of GKN Driveshafts

(supra) before proceeding any further in the impugned

reassessment proceeding.

In view of the discussion made above impugned

assessment order is quashed and the matter is remanded

back to the assessing officer concerned to first dispose of

the aforesaid objection of the petitioner against impugned

notice under Section 148 of the Income Tax Act by passing

a reasoned and speaking order and after giving an

opportunity of hearing to the petitioner or its authorised

representatives and any further proceeding with the

impugned assessment proceeding will depend upon the

final outcome of the aforesaid objection of the petitioner

which has to be considered accordingly and by passing a

reasoned and speaking order.

With this observation and direction, this writ

petition being WPA No.15188 of 2022 stands disposed of.

(Md. Nizamuddin, J.)