2019 (7) TMI 292 - AT - Income Tax

Re-opening of assessment u/s 147 - non disposal of objection raised by appellant regarding jurisdiction of reopening such as reasons to belief, barred by limitation, no failure on the part of the Appellant to fully and truly disclose material facts etc.- HELD THAT - We find that assessee has filed the Objection letter dated 15.4.2013 before the AO stating therein There is no escapement under assessment completed. The initiation of proceedings u/s. 147 are unwarranted. which shows that the AO has not decided the objection neither by a separate order nor in the final assessment order dated 21.3.2014, which is very essential to decide the same before completing the assessment and against the spirit of the direction of the Hon ble Supreme Court of India laid down in the decision of the GKN Driveshafts (India) Ltd. vs. ITO a 2002 (11) TMI 7 - SUPREME COURT and also Ld. CIT(A) has not taken into consideration the objection filed by the assessee against the reasons to believe stated by the AO. Therefore, in the interest of justice, we are remitting back the issues in dispute to the file of the AO with the directions to first decide the objection of the Assessee and then decide the issues in dispute, afresh, after giving adequate opportunity of being heard to the assessee.

Issues:
1. Validity of reasons for reassessment proceedings
2. Bar on assessment due to failure to disclose material facts
3. Presumption and prejudice in the impugned order
4. Failure to address objections raised by the Appellant
5. Addition made under Section 37 of the Act
6. Violation of principles of Natural Justice in the Assessment Order
7. Levying of interest under Section 234B and 234C of the Act
8. Initiation of penalty proceedings under Section 271(1)(c) of the Act

Analysis:

1. The appeal challenged the sustainability of the reasons for initiating reassessment proceedings. The Appellant contended that the reasons provided by the Assessing Officer were unsustainable both factually and legally. The Tribunal noted that the Assessing Officer failed to address the objections raised by the Appellant regarding the reasons for reassessment, contravening the principles laid down by the Hon'ble Supreme Court. Consequently, the issues were remitted back to the Assessing Officer for proper consideration and decision after hearing the Appellant.

2. The Appellant argued that the assessment order was time-barred as there was no failure on their part to fully disclose material facts. The Tribunal observed that the Assessing Officer did not adequately address the objections raised by the Appellant, leading to a violation of procedural fairness. The Tribunal directed the Assessing Officer to decide on the objections before proceeding with the assessment to ensure compliance with legal requirements.

3. The Appellant raised concerns regarding the presumptuous and prejudiced nature of the impugned order. The Tribunal acknowledged these concerns and emphasized the importance of addressing objections raised by the Appellant before finalizing the assessment. By not considering the objections and following due process, the authorities risked prejudicing the Appellant's rights, necessitating a reevaluation of the issues.

4. The Appellant contended that the Assessing Officer failed to dispose of the objections raised regarding the reasons for reopening the assessment, as required by legal precedent. The Tribunal agreed with this contention and directed the Assessing Officer to address the objections and provide a speaking order before proceeding with the assessment. Failure to adhere to this procedural requirement could invalidate the assessment process.

5. The addition made under Section 37 of the Act was challenged by the Appellant, arguing that the Assessing Officer did not sufficiently prove the alleged bogus nature of the entries. The Tribunal noted the lack of proper consideration of objections and directed a reevaluation of the issue to ensure that the burden of proof was adequately discharged before making such additions.

6. The Appellant raised concerns about the Assessment Order violating principles of Natural Justice, equity, and fairness. The Tribunal recognized the importance of upholding these principles in the assessment process and directed a reevaluation of the order to ensure compliance with legal standards and procedural fairness.

7. The Appellant contested the levying of interest under Section 234B and 234C of the Act. The Tribunal did not provide specific details on this issue in the summarized judgment.

8. The Appellant challenged the initiation of penalty proceedings under Section 271(1)(c) of the Act. The Tribunal did not provide specific details on this issue in the summarized judgment.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the need for procedural compliance, addressing objections, and upholding principles of Natural Justice in the assessment process. The judgment highlighted the importance of following legal precedents and ensuring fairness and equity in tax assessments.

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