2017 (4) TMI 1453 - AT - Income Tax

Reopening of assessment u/s 148 - non disposal of objections filed by the assessee against reasons recorded for reopening - HELD THAT - There is no merit in the appeal filed by the Revenue where the CIT(A) had allowed the appeal of assessee on jurisdictional issue and had not considered the merits of the addition. CIT(A) has applied proposition laid down by the jurisdictional High Court in the case of M/s. Bayer Material Sciences Pvt. Ltd. 2016 (3) TMI 179 - BOMBAY HIGH COURT to hold that where the objections filed by the assessee against reasons recorded for reopening the assessment have not been disposed of by a separate speaking order then the impugned assessment order is bad in law. The said proposition is squarely applicable to the facts of the present case and applying the same the assessment order is to be quashed. In such circumstances there is no merit in the grounds of appeal raised by the Revenue against the merits of addition and the same are dismissed. - Decided against revenue

Summary

Issues involved:
1. Validity of deletion of addition on account of alleged bogus purchases from Hawala dealers/parties.
2. Justification of deletion of addition based on section 292BB.
3. Validity of deletion of purchases treated as bogus based on the objection raised by the assessee.
4. Correctness of assuming objections raised by the assessee as u/s 292BB.
5. Merits of initiating proceedings u/s 147 of the Income Tax Act.
6. Legality of completing assessment without service of notice u/s 143(2).
7. Reliance on the statement of M/s. Jain Corporation without giving an opportunity to rebut.
8. Disallowance of purchase made from alleged hawala parties.
9. Completion of assessment without the issue of Notice u/s.142 (1).
10. Completion of assessment u/s.143 (3) without the assessee's appearance.
11. Allowance of set-off of brought forward losses.
12. Levying of interest u/s 234B without considering relevant provisions.

Analysis:

1. The Revenue appealed against the deletion of an addition on account of alleged bogus purchases from Hawala dealers/parties. The CIT(A) justified the deletion based on section 292BB and the objection raised by the assessee. The Revenue argued that the CIT(A) erred in assuming the objections as u/s 292BB, which only pertains to notice issues. The CIT(A) relied on a High Court judgment to quash the assessment order due to the Assessing Officer not disposing of objections properly.

2. The assessee raised objections regarding the initiation of proceedings u/s 147, completion of assessment without proper notice, reliance on a statement without rebuttal opportunity, disallowance of purchases, lack of Notice u/s.142 (1), completion of assessment without the assessee's presence, set-off of losses, and interest levied u/s 234B. The CIT(A) dismissed the Revenue's appeal, emphasizing the jurisdictional issue and the High Court's precedent. The Cross Objections by the assessee were dismissed as academic.

3. The judgment highlights the importance of proper disposal of objections by the Assessing Officer in reassessment cases. It also underscores the significance of following procedural requirements and providing opportunities for rebuttal to maintain the validity of assessment orders. The decision showcases the application of legal principles to uphold fair assessment practices and protect the rights of taxpayers and the revenue authorities.