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2018 (7) TMI 212 - AT - Income TaxReopening of assessment - procedure to be followed when a notice under Section 148 of the said Act is issued - non disposing of objections of assessee - Held that - In the instant case, no speaking order has been passed by the Assessing Officer but he directly proceeded to pass the reassessment order which is un-doubtly contrary to the directions in GKN DRIVESHAFTS (INDIA) LTD. VERSUS INCOME-TAX OFFICER AND OTHERS 2002 (11) TMI 7 - SUPREME COURT . As the Assessing Officer is bound to dispose off the objection(s) of the assessee by passing speaking order before proceeding with the re-assessment, hence, the appropriate course should be to restore back the matter to the file of the Assessing Officer with a direction to dispose off the assessee s objections by passing speaking order thereon and thereafter, to proceed with the reassessment proceeding, if required, as per law. Set aside the impugned order passed by the Ld CIT(A) with direction to the Assessing Officer for passing a speaking order on assessee s objections and thereafter can proceed further, if required, as per law
Issues:
1. Validity of reassessment proceedings initiated under section 147 of the Income Tax Act, 1961. 2. Disposal of objections raised by the assessee during the assessment proceedings. 3. Compliance with the Supreme Court's directions regarding passing a speaking order on objections raised by the assessee. Issue 1: Validity of Reassessment Proceedings: The appellant challenged the reassessment order passed by the Assessing Officer under section 147 of the Income Tax Act, contending that the proceedings were initiated without justification and in excess of jurisdiction. The appellant argued that the proceedings were flawed as the objections raised were not addressed by the Assessing Officer or the CIT(A). The appellant relied on the judgment in GKN Driveshafts (India) Ltd. vs. DCIT [2003] 259 ITR 19 (SC) to emphasize the need for proper disposal of objections. The Tribunal noted that the objections were not disposed of by the authorities, leading to a violation of the principles of natural justice. The Tribunal held that the reassessment order was void ab initio due to the failure to pass a speaking order on the objections raised by the assessee. Issue 2: Disposal of Objections: The appellant submitted objections to the initiation of reassessment proceedings, which were not addressed by the Assessing Officer or the CIT(A). The Tribunal observed that the failure to dispose of the objections violated the principles of natural justice and the directions laid down by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO. The Tribunal emphasized the importance of passing a speaking order on objections raised by the assessee before proceeding with the reassessment. The Tribunal concluded that the reassessment order was invalid due to the non-compliance with the requirement to address the objections raised by the appellant. Issue 3: Compliance with Supreme Court Directions: The Tribunal highlighted the necessity of complying with the Supreme Court's directions regarding the disposal of objections raised by the assessee during reassessment proceedings. Citing the judgment in M/s Home Finders Housing Ltd. v. ITO, the Tribunal emphasized that the failure to pass a speaking order on objections does not render the reassessment order void ab initio. However, in the present case, the Assessing Officer proceeded with the reassessment without addressing the objections, contravening the Apex Court's directives. The Tribunal directed the Assessing Officer to pass a speaking order on the objections raised by the assessee before proceeding with the reassessment proceedings, ensuring compliance with the legal requirements. In conclusion, the Tribunal allowed the appeal filed by the assessee for statistical purposes, setting aside the impugned order passed by the CIT(A) and directing the Assessing Officer to address the objections raised by the assessee before proceeding further with the reassessment proceedings.
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