The Orissa High Court held that the objections for reopening of assessment to be raised at reassessment proceedings.
The Petitioner, M/s. Amber filed income tax returns for the AY 2012-13 electronically disclosing a total income. The Petitioner’s tax returns were subjected to scrutiny under CASS, for which statutory notices under Sections 143(2) and 142(1) of the Act were issued to it by the Assessing Officer. An assessment order was passed under Section 143(3) of the Act by the AO purportedly being satisfied with the genuineness of the transactions and documents, etc. disclosed by the Petitioner.
Being aggrieved by certain disallowances of expenses in the aforementioned assessment order, the Petitioner filed a statutory appeal before the Commissioner of Income Tax (Appeals), which came to be disposed of by the CIT(A), Cuttack.
Thereafter, the impugned notice under Section 147 of the Act was issued to the Petitioner by Opposite Party, pursuant to which the Petitioner sought the reasons for such reopening. The Petitioner filed the same return pursuant to the notice.
After the reasons for reopening were communicated the Petitioner filed objections. Opposite Party rejected the objections of the Petitioner and issued a notice under Section 142(1) of the Act, seeking further details from the Petitioner.
At that stage, the present writ petition was filed by the Petitioner, in which notice was issued on 13th November 2019, and in the interim, it was directed that the reassessment proceedings may continue but no final order shall be passed without leave of the Court.
Mr. Sandeep Kumar Jena, the counsel for the petitioner urged that the non-supply of the copy of Mr. Banka’s statement (which incidentally has been extracted in full in the reasons for reopening), or not providing an opportunity to cross-examine Mr. Banka at the stage of objections vitiates the reopening of the assessment.
The division bench headed by Chief Justice Dr. S. Muralidhar and Justice Savitri Ratho while rejecting the contention of the petitioner said that such opportunity would be provided if sought by the Petitioner and if so permitted in law, in the reassessment proceedings. The Court was not satisfied that the Petitioner has made out any case for interference by the Court at the present stage, i.e. the stage of issuance of the notice for reopening of the assessment under Section 147 of the Act.
The Court while reserving the right of the Petitioner to raise all the defences available to it in accordance with the law in the reassessment proceedings, including the right to cross-examine the deponents of the statements relied upon by the Department in the reassessment proceedings, declined to interfere in the matter.
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