AO Duty Bound To Dispose Of Assessee's Written Objections To Proposed Re-Assessment By Passing Speaking Order: Calcutta High Court

A division bench of Chief Justice TS Sivagnanam and Justice Bivas Pattanayak held that the Assessing Officer had erred in not disposing of the written objection submitted by the assessee against the reopening of the assessment.

It observed, “The duty cast upon the assessing officer is to decide the written objections given by the assessee to the proposed reopening and passing a speaking order and if the order goes against the assessee, the assesee has a liberty to challenge the order by filing a writ petition as no other alternative remedy is provided under the provisions of the Income Tax Act, 1961.”

The Court was dealing with Revenue's appeal against the order of ITAT allowing the assessee's appeal and quashing the assessment order under Section 147, for not disposing of the objections raised by the assessee.

The ITAT had cited Madras High Court's decision in M/s. Home Finders Housing Limited vs. The Income Tax Officer (2017) where the reassessment order was set aside and the matter was remitted back to the AO for failure to pass a speaking order on the objections raised by the assessee.

The High Court relied on GKN Driveshafts [India] Ltd. vs. ITO (2003) where the Supreme Court laid down the procedure of dealing with objections raised against a reassessment notice.

It had held that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the assessee is to file the return and if he so desires, to seek reasons for issuing notices.

Thereafter, the assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the assessee 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, the Top Court had held.

“It is not in dispute that the assessing officer did not follow the procedure laid down by the Hon'ble Court in GKN Driveshafts [India] Ltd. [supra]. Therefore, the learned Tribunal was justified in allowing the assessee's appeal on the said ground. Thus, we find no ground to interfere with the impugned order,” the High Court thus held and dismissed Revenue's appeal.

Appearance : Mr. Aryak Dutt, Adv. Mr. Soumen Bhattacharjee, Adv. …for appellant Mr. J P Khaitan, Sr. Adv. Mr. Akhilesh Gupta, Adv. Mrs. Swapna Das, Adv. Mr. S. Das, Adv. …for respondent

Case title: Principal Commissioner Of Income Tax 13 Kolkata Vs Champalal Omprakash

Case no.: ITAT/5/2025

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