Court/Forum: SC
Bench: SYED SHAH MOHAMMED QUADRI & ARIJIT PASAYAT
Order Date: 2002-11-25
Outcome: Revenue
Sections: Section 148, Section 143(2)
When a notice under Section 148 is issued, the noticee should file a return and may seek reasons, which the assessing officer must provide, allowing the noticee to file objections that must be disposed of by a speaking order.
The Supreme Court dismissed the appeals, upholding the High Court's decision that the writ petition was premature. The Court clarified the procedure to be followed when a notice under Section 148 is issued.
Revenue
The central legal question was whether the writ petition challenging the validity of notices under Sections 148 and 143(2) was premature.
GKN Driveshafts (India) Ltd. challenged the validity of notices issued under Sections 148 and 143(2) for multiple assessment years. The High Court dismissed the writ petition as premature, leading to the appeal.
The assessee argued that the notices were invalid and that the writ petition was justified.
The Revenue contended that the writ petition was premature and that the assessee should follow the statutory procedure.
Section 148 - issuance of notice for reassessment; Section 143(2) - notice for scrutiny assessment.
The legal reasoning rests on the procedural requirements under the Income-tax Act, 1961, for handling notices under Section 148. The Court emphasized the need for the assessing officer to provide reasons for the notice and to address objections through a speaking order.
The substantive validity of the notices was not decided, as the focus was on procedural aspects.
Practitioners should ensure that procedural steps are followed when challenging notices under Section 148, including seeking reasons and filing objections.
http://JUDIS.NIC.IN SUPREME COURT OF INDIAPage 1 of 1
Appeal (civil) 7731 of 2002
2002 Supp(4) SCR 359 The following Order of the Court was delivered : Heard learned counsel for the parties. Leave is granted. By the order under challenge, a Division Bench of the High Court at Delhi dismissed the writ petition filed by the appellant challenging the validity of notices issued under Sections 148 and 143(2) of the Income Tax Act, 1961. The High Court took the view that the appellant could have taken all the objections in its reply to the notices and that, at that stage, the writ petition was premature. Accordingly, the writ petition was dismissed on 31st January, 2001. Aggrieved by that order, the appellant is in appeal before us. Mr. M.L. Verma, learned senior counsel appearing for the appellant, submits that the impunged notices relate to seven assessment years; that during the pendency of these appeals, in respect of two assessment years, viz., 1995-96 and 1996-97, assessment has been completed against which appeals have been filed. Notices relating to the other five assessment years, viz., 1992-93, 1993-94, 1994-95, 1997-98 and 1998-99, are now the subject-matter of these appeals. We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 of the Income tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee 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. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking Order before proceeding with the assessment in respect of the abovesaid five assessment years. Insofar as the appeals filed against the order of assessment before the Commissioner (Appeals), we direct the appellate authority to dispose of the same, expeditiously. With the above observations, the civil appeals are dismissed. No costs.