Assessing Officer should not show undue hurry in completing an assessment
The Bench of the High Court at Ahmadabad consisting of Hon’ble Justice Mr. Akil Qureshi and Hon’ble Justice Ms. Sonia Gokani has passed a judgment declaring that if an assessing Officer shows undue hurry in completing an assessment proceeding even though the time limit for doing the same is available, the principles of natural justice are violated.
The judgment was passed in the Special Civil Application No. 17851 of 2013 in the case of Shree Palani Transport Co…..Petitioner vs. The Assessing Officer ……..Respondent.
Facts and circumstances of the case:
The petitioner assessee challenged the order of assessment passed on November 22, 2013 by the Assessing Officer on various grounds.
For the assessment year 2006 – 2007, the Assessing Officer passed the assessment on August 11, 2008 after scrutiny and issued a notice under section 148 of the Income Tax Act, 1961 on March 20, 2013 to reopen such assessment. In such notice, the reasons for reopening were also stated.
The petitioner objected to such reopening by a communication dated November 15, 2013. Thereafter, the Assessing Officer proceeded with the reassessment proceedings and fixed dates for hearing. The petitioner was called upon to explain why the payment of Rs.1.63 crore should not be disallowed to it under section 40(a) (ia) of the Act. He was given time till November 22, 2013 and was asked to appear before the the Assessing Officer on such date. The petitioner sent a communication dated November 22, 2013 and requested the Assessing Officer to adjourn the hearing as they were compiling the required details. They also asked for 20 days time to comply the show cause notice issued to them.
The Learned Advocate for the petitioner Mr. Hardik V. Vora, contended that the Assessing Officer failed to deal with the objections against reassessment under section 147 which was required to be done as per rulings of the Honorable Supreme Court.
According to the rulings it was mandatory to pass speaking order in connection with objections of assessee. Hence any failure in passing a speaking order would be contempt of order of the Honorable Apex Court.
The learned counsel for the Revenue contended that the assessment order was subjected to statutory appeal, as such the Court should not exercise writ jurisdiction. If there was violation of principles of natural justice on the face of record, it would be necessary for the petitioner to move before the Appellate forum.
The decision of the Supreme Court in Whirlpool v. Registrar of Trade Marks, Mumbai and others, AIR 1999 SC 22, was referred to in the case.
It was admitted that a communication was received by the Assessing Officer in person, a copy of which was produced by the assessee. In spite of such objection, the Assessing Officer passed the impugned order of assessment on November 22, 2013.
It was held that the Assessing Officer showed undue hurry in completing the assessment proceedings, though the time limit for doing so was available till March 31, 2014, as was pointed out by the learned counsel for the petitioner.
It was further held that the Assessing Officer ought not to have neglected the request for adjournment and proceeded for final order of assessment. The application for time was not even decided. Without refusing adjournment to the petitioner the Assessing Officer on the same day proceeded to pass the order of assessment.
It was held that the said act of the Assessing Officer resulted in violation of principles of natural justice which provides to give a fair opportunity of hearing to the petitioner, on the ground of which the assessment order was quashed.
The assessment proceedings were remanded back to the Assessing Officer for disposal of the same in accordance with law.