INCOME TAX ACT, 1961

Section 148

Reassessment - Beyond four years - Failure to record reasons for reopening -

AO passed an assessment order under section 143(3). AO subsequently passed an order of assessment under section 154. CIT(A) held that debatable issues do not come within ambit of section 154. Order passed by CIT(A) was not challenged by revenue. Subsequently, AO issued a notice under section 148 notwithstanding order of CIT(A). Assessee, even before receiving reasons for issuing notice, filed a preliminary objection. Assessee, sent a communication to AO for filing return of income in response of notice issued under section 148. Assessee challenged the notice under section 148 before court. Held: Once a notice under section 148 has been issued, proper course of action for noticee is to file a return and to seek reasons for issuing notice, if he so desires. On receipt of reasons, noticee is entitled to file objections to issuance of notice and AO is bound to dispose of same by passing a speaking order. Accordingly, directions were issued that in case assessee files an objection challenging notice issued by AO within a stipulated time, AO shall afford an opportunity of hearing to assessee and shall decide each and every objection raised by assessee separately by assigning reasons. Further, ad interim order issued by Court, that no final order should be passed by AO without leave of Court, was extended for a further period of three weeks.

Applied:GKN Driveshafts (India) Ltd. v. ITO & Ors. (2003) 259 ITR 19 (SC) : 2003 TaxPub(DT) 0734 (SC),

REFERRED :

FAVOUR : In assessee's favour by way of remand

A.Y. :

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