Jagdishprashad M. Joshi Vs the Assistant Commissioner of Income Tax Central CIRCLE-11, Mumbai and Anr.

2.	Four times	we	indic	ated to the learned coun	sel	for
the	petitioner that	as	th	e impugned order does	not	meet
the	requirement of	law	b	ecause the Assessing O	fficer	has
not	dealt with	the	obje	ctions raised by the		petitioner
in	response to	the	notic	e under Section 148	of	the
Income	Tax Act,	1961,	the	matter has to be rem	itted	to
him,	the learned	coun	sel	kept on insisting that	we	must
quash	the notice	under	sect	ion 148 here and now.		We
fail	to understand	t	he	insistence of the		learned
counsel.	This is	a	wri	t petition under Article	226	of
the	Constitution of	Ind	ia	and if this Court find	s	that
the	assessing off	icer	has	not properly followed	the	law
laid	down by	the	Apex	Court by not disposing	of	the

¶14

2

¶15

petitioner’s objections by speaking order, naturally the

¶16

matter must go back to him for reconsideration.

¶17

3.	The	petition	er	was	served	with	the notice	under
Section	148	of	the	Income	Tax	Act,	1961 intimating	to
him	that	his	income	for	the	Asses	sment Year	1998-1999
chargeable	to	tax		has	escaped	ass	essment within	the
meaning	of	Section	147	of	the Inc	ome	Tax Act.	The
reasons	that	led	to	the fo	rming	of	such opinion	were
furnished	and	in	res	ponse	thereto		the petitioner	filed
his	objections.		Inter	alia	the	obj	ection was	raised
that the	sales	made	to	the	two	part	ies viz.	M/s.Jaywant
Industries	Limi	ted	and		M/s.Jayw	ant	Products	Limited
amounting	to	Rs.1	0.25	crores	has	alr	eady been	assessed
during	the	course	of	two	block		assessment orders	passed

¶18

on 31st March, 2004 and 30th May, 2004 respectively.

¶19

The objections filed by the petitioner read thus:

¶20

"1.2	Firstly, the very basic req	uirement
	u/s.147 is that there should be	reason
	to believe that any income chargeable	to
	tax has escaped assessment. The made to the said parties have	sales already
	been assessed during the course of	two
	block assessments (covering these passed on 31.03.2004 and 30 These sales and profit therefrom not only been assessed and taxed	sales) .05.2004. have but
	also the said tax demand was paid full, though under appeal. So your selves have erred while recording reasons stating that he (so	in good the called
	bogus) sales to these two parties profit therefrom has escaped assessment.	and
1.3	Secondly, regular assessment for	A.Y.
	1988-99 was completed by your	good
	selves vide your order dt.30	.03.2001

¶21

3

¶22

u/s.143(3) r.w.s. 147 of the I.T.Act,
1961. The sales to the above mentioned
two parties were duly disclosed in the final accounts & books of accounts produced before your selves and details of customers with addresses, value of
sales affected including to these two
parties filed with your selves during
the course of assessment for the said
year. So now, it is only change of
opinion and no reason to believe that
income has escaped assessment due to
failure on part of the assessee to disclose fully and truly all material facts.
2. It is legally not permissible [per
Explanation to subsection (2) of Section
158BA] to assess an income, which has
already been assessed during block
assessment, again in regular assessment.
Your reasons provided also refer to
search conducted. Two block assessments
(which included A.Y. 1998-99) had been
completed (first on 31-03-2004 & second
on 30-15-2004) had been completed (first
on 31.03.2005. The same cannot be again
assessed in regular assessment u/s.147
r.w.s. 148 reasons for which recorded
on 28-03-2005. Therefore the said notice u/s.148 dt.28.03.05 is bad in law and hence may be cancelled/dropped."

¶23

4.	The	assessing	officer	rejected	the objections	by
observing	that	in view	of	the	findings in	block
assessment		proceedings of	the	wrong	claim under	Section
80-IA	with	respect to	sales	made	to M/s.Jaywant	Products
Limited		and M/s.Jaywant	Indu	stries	Limited, the	notice

¶24

given to the petition under Section 148 cannot be cancelled.

¶25

5.	In	GKN	Drives	hafts	(India)	Ltd.	v.		Income	Tax
Officer	&	ors.,	259	(2003)	ITR	19,	the		Supreme	Court
held	that	upon	receipt	of	the	object	ions	to	the	notice

¶26

4

¶27

under	Sect	ion 148 of the Income Tax Act,	the	a	ssessing
officer	sha	ll dispose of the objections by	a	s	peaking
order	before	proceeding with the assessmen	t	of	the
concerned		year. The order dated 24th Janua	ry,	2006	is
non-speaking		order and does not meet the	re	quirement	of
law as	laid	down by the Supreme Court in the	ca	se of	GKN
Driveshafts		(India) Limited. The assessing		officer	was
obliged	to	pass a speaking order dealing		with	the
objections		raised by the petitioner in respon	se	to	the
notice	under	Section 148. We do not agre	e	with	the
contention		of the learned counsel for	the	p	etitioner
that	we	must quash the notice under Section	148	of	the
Income	Tax	Act issued to the petitioner.	That	stage	has
not	arise	n because the assessing officer h	as	not	passed
speaking	orde	r dealing with the objections r	aised	by	the
petitioner.		However, the order dated 24th	Ja	nuary,	2006
passed	by	the assessing officer cannot stand	an	d has	to

¶28

be set aside being non-speaking order and the matter has

¶29

to be reconsidered by the petitioner.

¶30

We, accordingly, dispose of this writ petition by

¶31

the following order:

¶32

(i)	The	order		dated	24th	January,	2006
	passed		by	the	Assistant	Commissioner	of

¶33

Income Tax, Central Circle 11, Mumbai is

¶34

quashed and set aside.

¶35

5

¶36

The	Assistant	Commissio	ner	of	Income
Tax,	Central	Circle	11,	Mumb	ai is
directed	to	re-consider	the		petitioner’s
objections	dated	6th	January,	2006	in
accordance	with	the	law	and	pass

¶37

speaking order disposing of such objections.

¶38

Until	objectio	ns dated	6th		January,	2006
filed	by	the peti	tioner	are	disposed	of
by	the	Assistant	Commis	sioner	of	Income
Tax,	Centr	al Circle	11,	Mu	mbai	afresh
and	for	a period	of		four	weeks
thereafter		from	the		date	of
communicat	ion	of such		order	to	the
petitioner,		the	assessing		officer	shall
not	pass	the	fre	sh	order	of

¶39

re-assessment pursuant to the notice

¶40

dated 28th March, 2005.

¶41

(R.M. LODHA,J.)

Jagdishprashad M. Joshi v. the Assistant Commissioner of Income Tax Central CIRCLE-11, Mumbai and Anr.

Case brief

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Jagdishprashad M. Joshi v. the Assistant Commissioner of Income Tax Central CIRCLE-11, Mumbai and Anr.

Case brief

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