| The Tax Publishers2021 TaxPub(DT) 2426 (Ori-HC) : (2021) 435 ITR 0376 CONSTITUTION OF INDIA, 1950
Article 226 Section 147
Supreme Court in GKN Driveshafts [(2003) 1 SCC 72 : 2003 TaxPub(DT) 734 (SC)], had held that an assessee's objection to the reopening of the assessment should be disposed of by AO by a speaking order is a mandatory requirement that cannot be dispensed with and admittedly this mandatory requirement was not complied with, moreover, approval under section 151 has to be granted by Pr. CIT or CCIT, if the reopening was beyond four years, however, approval in the instant case was issued by Jt.CIT, therefore, it was not a valid approval under section 151.
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Writ - Reopening of assessment under section 147 - Non disposal of objections prior to issuance of the impugned SCN -
The challenge in this writ petition was to a notice issued by ITO to the Petitioner proposing to reassess the income for the assessment year 2007-08 under section 147 on the ground that the income chargeable to tax for the said assessment year had escaped assessment. ITO furnished the Petitioner the reasons for reopening of the assessment. On receipt of reasons, Petitioner made a detailed representation objecting to the reopening of the assessment. Without deciding those objections, ITO proceeded to issue the show cause notice calling upon the Petitioner to explain why the reassessment should not be completed by enhancing the Petitioner's total income by making addition as proposed in the said SCN. Held: Indeed, the requirement spelt out by Supreme Court in GKN Driveshafts [(2003) 1 SCC 72 : 2003 TaxPub(DT) 0734 (SC)], is that an assessee's objection to the reopening of the assessment should be disposed of by AO by a speaking order is a mandatory requirement that cannot be dispensed with. Admittedly, this mandatory requirement was not complied with. In instant case, there was no indication of any application of mind by the authority. Moreover, the approval under section 151 has to be granted by Pr. CIT or CCIT, if the reopening was beyond four years. However, the above approval in the instant case was issued by Jt. CIT. Therefore, it was not a valid approval under section 151 and accordingly petition was allowed.
Followed:GKN Driveshafts (India) Ltd. v. ITO & Ors. (2003) 1 SCC 72 : 2003 TaxPub(DT) 734 (SC)Pr. CIT v. N.C. Cables Ltd. (2017) 391 ITR 11(Del-HC) : 2017 TaxPub(DT) 264 (Del-HC).
REFERRED :
FAVOUR : Petition allowed.
A.Y. : 2007-08
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