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2018 (8) TMI 2008 - AT - Income TaxReopening of assessment u/s 147 - as argued Assessee objections are not dealt with by the AO - HELD THAT - AO has not adjudicated the objection raised by assessee on the reasons recorded for issuance of notice under section 148 of the Act vide letter No.SC-148/BS/A.Y.09-10/02 dated 30.04.2014. We have gone through the assessment order and other material placed before us, which in no way indicates that the AO has adjudicated the objections. Once the objections raised by assessee and not adjudicated by the AO in term of the decision of Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd. 2002 (11) TMI 7 - SUPREME COURT the assessment / re-assessment framed by the AO in lieu of notice under section 147/ 148 of the Act is quashed. We find that this issue is squarely covered by the decision in the case of KSS Petron Pvt. Ltd 2016 (10) TMI 1112 - BOMBAY HIGH COURT . Also see TUPPERWARE INDIA PVT. LTD. 2015 (8) TMI 517 - DELHI HIGH COURT Thus re-assessment is quashed and appeal of assessee is allowed on this jurisdictional issue. - Decided in favour of assessee.
Issues:
1. Validity of assessment based on objections raised against reopening of assessment. Analysis: The appeal before the Appellate Tribunal ITAT Mumbai involved a challenge by the assessee against the order of the Commissioner of Income Tax (Appeals) regarding the reopening of assessment for the A.Y. 2009-10. The primary issue was whether the objections raised by the assessee against the reopening were adequately addressed by the Assessing Officer (AO). The reasons for reopening the assessment included information from the Maharashtra Sales Tax Department regarding fictitious sales bills issued by certain parties, which the assessee was alleged to have benefitted from. The AO issued a notice under section 148 of the Income Tax Act, 1961 based on these reasons. The assessee contended that the objections raised were not considered by the AO during the assessment process. Upon review of the facts and arguments presented, the Tribunal noted that the AO failed to adjudicate on the objections raised by the assessee, which was a crucial procedural requirement as per legal precedents, including the decision of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs. ITO. Citing relevant case laws, the Tribunal emphasized the mandatory nature of addressing objections before finalizing the assessment. The Tribunal referred to the decision of the Hon'ble Bombay High Court in KSS Petron Pvt. Ltd. case and the Hon'ble Delhi High Court in PCIT vs. Tupperware India (P.) Ltd., which highlighted the importance of complying with the procedure laid down by the Supreme Court in GKN Driveshafts case. In light of the legal principles and precedents, the Tribunal concluded that the failure of the AO to address the objections rendered the reassessment invalid. Therefore, the Tribunal quashed the reassessment and allowed the appeal of the assessee on this jurisdictional issue. As a result, the Tribunal did not delve into the merits of the case, deeming it academic after setting aside the reassessment. In the final order pronounced on 28-08-2018, the Tribunal upheld the assessee's appeal, emphasizing the significance of addressing objections raised during the assessment process as a fundamental procedural requirement for a valid reassessment.
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