Calcutta High Court
Sahara India Commercial Corpn. Ltd. vs Deputy Commissioner Of Income Tax on 15 March, 2006
Equivalent citations: (2006)202CTR(CAL)501, [2006]284ITR295(CAL)
Author: Jayanta Kumar Biswas
Bench: Jayanta Kumar Biswas
JUDGMENT Jayanta Kumar Biswas, J.
1. The petitioner-company is aggrieved by the decision of the AO dt. 16th Feb., 2006 and also by the assessment order dt. 24th Feb., 2006 made by him. The assessment order has been brought on record by filing a supplementary affidavit dt. 1st March, 2006.
2. Notice under Section 148 of the IT Act, 1961 was issued on 15th March, 2005. It was regarding asst. yr. 1998-99. Reasons for reopening the assessment were recorded and disclosed by the AO on 2nd June, 2005. There is no dispute that the reasons were received by the petitioner-company on that day itself. In October, 2005 it moved this Court by filing a writ petition against steps taken by the authorities for transferring all its cases with a view to centralising its tax matters. Certain interim order was made. Notice under Section 142 was issued on 17th Jan., 2006. On 31st Jan., 2006 it submitted its objections to the reasons recorded and disclosed in support of reopening of the assessment. On 13th Feb., 2006 it submitted further grounds of objections.
3. In the decision dt. 16th Feb., 2006 the AO recorded that objections of the petitioner-company had been considered. He did not make any speaking order. In a sentence he, apparently, disposed of the objections. Feeling aggrieved, the petitioner-company submitted application dt.22nd Feb., 2006 requesting the AO to give the speaking order after considering the objections. Since the speaking order was not coming, it took out the present writ petition. The day copy of the writ petition was served, the AO served the assessment order dt. 24th Feb., 2006.
4. Counsel submits that both the decisions dt. 16th Feb., 2006 and the assessment order dt. 24th Feb., 2006 are liable to be set aside, since objections submitted by the petitioner-company were not disposed of by the AO by making a speaking order, though in view of the apex Court decision he was under an unqualified obligation to make a speaking order.
5. As to the question of making the speaking order, counsel for the Revenue submits that on the facts of the case the AO was not under the obligation to make any speaking order. His submission is that since the petitioner-company had not submitted any objection before 17th Jan., 2006 when the notice under Section 142 was issued, there was no reason for the AO to make a speaking order.
6. His further contention is that the question of jurisdiction of the AO to reopen the assessment can be raised before the appellate authority, since against the assessment order an appeal can be preferred. To this, counsel for the petitioner-company submits that in view of the provision of law existing today [Section 251(1)(a)] the appellate authority has no power to remit the matter to the AO for determining the question of jurisdiction.
7. I am unable to appreciate the manner in which the AO proceeded with the matter. What he actually wanted to mean by his decision dt. 16th Feb., 2006 is not clear. In view of the objections submitted by the petitioner-company raising the question of jurisdiction, and in the face of the apex Court decision in G.K.N. Driveshafts (I) Ltd. v. ITO (2003) 179 CTR (SC) 11 : (2003) 259 ITR 19 (SC), on receipt of objections from the petitioner-company, he was under the obligation to make a speaking order. He could have very well said that on the facts of the case the objections were not entertainable. He did not say so. He rather said that he had considered the objections. Thereafter he did not say anything about the merits of the objections raised by the petitioner-company.
8. It is curious that on receipt of notice of the writ petition he decided to serve the copy of the assessment order. In the context of application dt. 22nd Feb., 2006 submitted by the petitioner-company requesting him to give the speaking order after considering the objections, in my view it would have been fair on his part to give the speaking order, when he had already given an indication about the consideration of objections, as will appear from his decision dt. 16th Feb., 2006 which, in the eye of law, is no speaking order.
9. I do not think in such a case the assessee should be sent to the appellate authority. The petitioner-company was entitled to get the speaking order. Such a valuable right of the petitioner-company could not be taken away by the AO at the stroke of a pen. He clearly acted contrary to the binding decision of the apex Court. It is not the case that he had no knowledge of the decision. Hence, I am unable to countenance the manner in which he proceeded with the matter.
10. For these reasons I hold that this is a fit case where the writ petition should be disposed of at the admission stage itself. The question raised is to be decided on the admitted facts. It is really a question of law and propriety of the manner in which the AO has proceeded with the matter. The assessment order given by him is not questioned here on merits, and I am also not supposed to examine it on merits. Hence, I propose to finally dispose of the writ petition at this stage itself.
11. As a result, 1 hold that the assessment order dt. 24th Feb., 2006 is liable to be set aside, and that the decision of the AO dt. 16th Feb., 2006 should also be set aside. I, ac cordingly, set aside the assessment order dt. 24th Feb., 2006 and the decision of the AO dt. 16th Feb., 2006. The AO is directed to give the speaking order after considering the objections of the petitioner-company as raised in its applications dt. 31st Jan., 2006 and 13th Feb., 2006. After giving the speaking order, the AO shall proceed with the matter in accordance with law.
12. There shall be no order for costs.