Challenge against Income Tax Order directing Re ajudication by AO: Orissa HC dismissed Petition in Absence of Substantial Question Of Law [Read Order]

The Orissa High Court in a recent case dismissed the petition in absence of substantial question of law. The Writ petition was on challenging the Income Tax Order  which directs  reajudication by Assessing Officer (AO).

Mr. Parida, advocate appeared on behalf of appellant- assessee Biswajit Behera  challenged the order dated 4th January, 2024 made by the Income Tax Appellate Tribunal. The appeal before the Tribunal was against appellate order dated 21st September, 2023. On last day of the prescribed period, notice under section 148 in Income Tax Act, 1961 was issued to his client. He obtained reasons for belief and thereupon filed an objection. Without considering and dealing with the objection, an assessment order was made. The first appellate authority confirmed the assessment order, against which his client moved the Tribunal.

It was contended that the Tribunal erred in restoring the re- assessment proceeding since his client’s objection to the reopening had not been dealt with by the Assessing Officer (AO). He relies on decision of the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO,. A substantial question of law arises on whether the Tribunal was correct in so restoring. He seeks admission of the appeal on a substantial question of law suggested in the memo or on any question as may be formulated by us.

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Mr. Kedia, advocate, Junior Standing Counsel appears on behalf revenue and submitted that, the Tribunal committed no error in restoring the re-assessment proceeding. Appellant can participate in the restored proceeding as the Tribunal had also given liberty for him to take additional objection.

A division bench of Justice Arindam Sinha And Justice Sanjay Kumar Mishra found  that the Tribunal in following the declaration of law made by the Supreme Court, directed the AO to re-adjudicate upon first dealing with the objection. Further held that “in event, consideration of the objection renders satisfaction to the AO that the reopening does not result in enhancement, the proceeding will be appropriately closed.”

In absence of substantial question of law arises for admission of the appeal, the court dismissed the appeal.

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