The main legal point established in the judgment is the importance of providing the assessee with a reasonable opportunity of being heard and the right to file a defense in reassessment proceedings under section 148A of the Income Tax Act, 1961.

JUDGMENT :

N.V.ANJARIA, J.

Heard learned advocate Mr.Aditya Ajgaokar with learned advocate Mr. Bhaumik Dholariya for the petitioner and learned advocate Mr.Karan Sanghani for the respondents.

2. What is prayed in this petition filed under Article 226 of the Constitution is to set aside order dated 30.07.2022 under Section 148A(d), as also the consequential notice dated 30.07.2022 issued under Section 148 of the Income Tax Act, 1961, which were in respect of Assessment Year 2016-17.

3. Noticing the relevant facts, the petitioner engaged in the business as builder, land-organiser, developer of lands and such other infrastructural projects, filed its return of income alongwith computation of income for the Assessment Year 2016-2017 declaring loss of Rs. 8,24,444/- on 4.10.2016. Thereafter, on 30.6.2021, respondent No.1- the Income Tax Officer issued notice under section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) requiring the petitioner to file return of income for Assessment Year 2016-2017. The petitioner filed its return of income under section 139 of the Act on 30.7.2021. The petitioner thereafter requested for copy of reasons recorded from the officer. The notice under section 143(2) of the Act was issued on 27.9.2021 and the respondent No.1 Assessing Officer supplied copy of reasons on the same date.

3.1 In the reasons recorded, respondent No.1 alleged against the petitioner that the petitioner purchased immovable property for consideration of Rs. 30,23,10,000/-. It was further alleged that the petitioner was a shell company which was not actually involved in any kind of business activity, however, was found, according to the Assessing Officer, to have acquired immovable property from income earned by undisclosed source.

3.2 It was further alleged that while the assessee company had purchased immovable property, the details of the said transactions were not disclosed in the books of accounts of the petitioner. Therefore, the Assessing Officer concluded that the investment of Rs. 30,23,10,000/- was made for the immovable property by the Assessee from undisclosed source of income and which remained out the ambit of taxation.

3.3 The petitioner objected to the reasons recorded and filed its detailed objections by letter dated 11.10.2021. It was submitted on 12.10.2021. The allegations were refuted and it was explained that the petitioner had purchased immovable property at Dehradun for Rs. 10,59,23,190/- on 3.2.2016 and the same was registered with the office of sub-registrar, Dehradun and was also recorded in the audited books of accounts and Financial Statement as on 31.3.2016, which formed part of stock in trade of Rs. 15,04,03,552/-. The petitioner stated that he had not purchased any other immovable property during the year under consideration.

3.4 It was further stated that figure of Rs. 30,23,10,000/- shown towards purchase of immovable property was incorrect and that the initiation of the reassessment proceedings was thus based on wrong facts. It is the say of the petitioner that petitioner reeled under impression that as per the law laid down by the Supreme Court in GKN Driveshafts (India) Ltd. vs. ITO [(2023) 259 ITR 19 (SC)], the Assessing Officer would dispose of the objections to the reasons recorded by passing a speaking order.

3.5 The petitioner stated that, however, in its case, the order disposing of the objections was never passed by the Assessing Officer. It was thus pleaded by the petitioner that by not passing any order disposing of the objections, not only the law laid down by the supreme court in GKN Driveshafts (India) Ltd. (supra) was violated, the petitioner was also deprived of a reasonable opportunity to meet with the case of the department in reassessment notice.

3.6 It is to be noted that the new regime containing newly inserted provisions relating to reassessment inter alia section 148A was brought in the statute book with effect from 1.4.2021. The provisions contemplated issuanc