2015 (4) TMI 1302 - AT - Income Tax

Reopening of assessment - Unexplained cash - non disposal of objections raised by the assessee against the issuance of notice u/s 148 - HELD THAT - In the instant case, it is not in dispute that the assessee filed his objections against the issuance of notice u/s 148 of the Act vide his letter dated 11.11.2009 which was received by the office of the Assessing Officer on 16.11.2009. AO passed the impugned re-assessment order on 20.11.2009, disposing off the objections to re-assessment proceedings of the assessee in the order itself. Thus, these facts show that the objections raised by the assessee against the issuance of notice u/s 148 of the Act were not disposed off by the AO by passing a speaking order thereon and allowing reasonable time to the assessee after communicating the fate of the objections before proceeding with the re-assessment. As relying on General Motors India P. Ltd. 2012 (8) TMI 714 - GUJARAT HIGH COURT we are of the considered view that the impugned order of re-assessment passed by the Assessing Officer without disposing off the objections raised by the assessee against the issuance of notice u/s 148 by a separate order is liable to be quashed. We order accordingly. Thus, this ground of appeal of the Revenue is dismissed.

Summary

Issues involved:
- Appeal against deletion of addition of unexplained cash
- Jurisdiction to initiate reassessment proceedings under section 147
- Disposal of objections against issuance of notice u/s 148
- Legality of re-assessment order without separate disposal of objections

Analysis:
1. Deletion of addition of unexplained cash: The Revenue appealed against the deletion of two additions related to unexplained cash. The CIT(A) had deleted the additions, leading to the appeal. The Tribunal noted the grounds of appeal by the Revenue but ultimately dismissed the appeal, upholding the CIT(A)'s decision to delete the additions.

2. Jurisdiction to initiate reassessment proceedings under section 147: The Authorised Representative of the assessee raised objections regarding the jurisdiction of the Assessing Officer to initiate reassessment proceedings under section 147. The CIT(A) had dismissed these objections, citing decisions of higher courts. However, the Tribunal, following the principles established by the Hon'ble Gujarat High Court, emphasized the importance of the Assessing Officer disposing of objections separately before passing a reassessment order. The Tribunal quashed the re-assessment order due to the failure to follow this procedure.

3. Disposal of objections against issuance of notice u/s 148: The assessee had objected to the issuance of notice u/s 148, arguing that the objections were not disposed of separately, as required by law. The Tribunal agreed with the assessee, citing the Hon'ble Gujarat High Court's decision, which emphasized the necessity of the Assessing Officer deciding on objections and communicating the decision to the assessee before proceeding with the reassessment. As the objections were not disposed of separately, the Tribunal quashed the re-assessment order.

4. Legality of re-assessment order without separate disposal of objections: The Tribunal ultimately dismissed the Revenue's appeal, as the quashing of the re-assessment order rendered the grounds of appeal on the merits of the addition moot. The Tribunal's decision was based on the failure to comply with the procedural requirement of separately disposing of objections against the issuance of notice u/s 148. The Tribunal upheld the principle that objections must be addressed before proceeding with the reassessment, as established by the Hon'ble Gujarat High Court.

In conclusion, the Tribunal's decision in this case focused on procedural compliance regarding the disposal of objections against the issuance of notice u/s 148 before passing a re-assessment order. The Tribunal emphasized the necessity of following legal procedures and quashed the re-assessment order due to the failure to separately address the objections raised by the assessee.