GKN DRIVESHAFTS (INDIA) LTD.versusINCOME TAX OFFICER AND ORS.

                    GKN DRIVESHAFTS (INDIA) LTD.                                  A
                                      v.
                    INCOME TAX OFFICER AND ORS.

                          NOVEMBER 25, 2002

  [SYED SHAH MOHAMMED QUADRI AND ARIJIT PASAYAT, JJ.]                             B

        Income Tax Act, 1961:

       Ss. 148 and 143(2)-Issuance of notices under-Challenging validity of
-Procedure-Writ petition filed by assessee before High Court-Dismissed, C
 holding that assessee could have taken all the objections in reply to the
 notices and the writ petition was pre-mature-Held, when a notice u/s 148 is
 issued, proper course of action for noticee is to file return and, if he so
desires, to seek reasons for issuing notices-Assessing officer is bound to
furnish reasons within a reasonable time-Then noticee is entitled to file D
 objections to issuance of notice and assessing officer is. bound to dispose of
 the same by a speaking order-On facts, since reasons have been disclosed,
assessing officer has to dispose of the objections, if any, by a speaking order
before proceeding with the assessment-Order of High Court needs no
interference.
                                                                                  E
        CIVIL APPELLATE JURISDICTION              Civil Appeal No. 773 I of
2002.

     From the Judgment and Order dated 31.1.2002 of the Delhi High
Court in C.W. No. 730 of 2002.
                                                                                  F
                                    WITH

        C.A. Nos. 7732, 7733-7734, 7735, 7736 and 7737 of 2002.

     M.L. Verma, Jagdish Kumar Chawla, V.P. Gupta and R.K. Jain for the
Appellant.                                                                        G
      Ranbir Chandra, Ms. Neera Gupta, Rajiv Tyagi and B.V. Balaram Das
for the Respondents.

        The following Order of the Court was delivered :
                                                                                  H
                                     359
    360                        SUPREME ('')URT REPORTS [2002) SUPP. 4 S.C.R.

A          Heard learned counsel for the parties.

           Leave is granted.

           By the order under challenge, a Division Bench of the High Court at
    Delhi dismissed the writ petition filed by the appellant challenging the validity
B   of notices issued under Sections 148 and 143(2) of the Income Tax Act,
    1961. The High Court took the view that the appellant could have taken all
    the objections in its reply to the notices and that, at that stage, the writ
    petition was premature. Accordingly, the writ petition was dismissed on 31st
    January, 2001. Aggrieved by that order, the appellant is in appeal before us.

C          Mr. M.L. Verma, learned senior counsel appearing for the appellant,
    submits that the impunged notices relate to seven assessment years; that
    during the pendency of these appeals, in respect of twp assessment years,
    viz., 1995-96 and 1996-97, assessment has been completed against which
    appeals have been filed. Notices relating to the other five assessment years,
D   viz., 1992-93, 1993-94, 1994-95, 1997-98 and 1998-99, are now the subject-
    matter of these appeals.

          We see no justifiable reason to interfere with the order under challenge.
    However, we clarify that when a notice under Section 148 of the Income tax
    Act is issued, the proper course of action for the noticee is to file return and
E   if he so desires, to seek reasons for issuing notices. The assessing officer is
    bound to furnish reasons within a reasonable time. On receipt of reasons, the
    noticee is entitled to file objections to issuance of notice and the assessing
    officer is bound to dispose of the same by pas:-ing a speaking order. In the
    instant case, as the reasons have been disclosed in these proceedings, the
    assessing officer has to dispose of the objections, if filed, by passing a speaking
F   Order before proceeding with the assessment in respect of the abovesaid five
    assessment years.

         Insofar as the appeals filed against the order of assessment before the
    Commissioner (Appeals), we direct the appellate authority to dispose of the
G   same, expeditiously.

           With the above observations, the civil appeals are dismissed.

           No costs.

    R.P.                                                          Appeals dismissed.