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2020 (11) TMI 443 - AT - Income TaxReopening of assessment u/s 147 - objections are not considered by the Assessing Officer and no order qua that is passed - HELD THAT - The issue is covered in favour of the assessee for the reason that the objections were not disposed off by the Assessing Officer or even by CIT(A). No hesitation in quashing the assessment in view of the decision of Hon ble Bombay High Court in the case of KSS Petron Private Ltd. 2016 (10) TMI 1112 - BOMBAY HIGH COURT - Decided in favour of assessee.
Issues:
1. Validity of reassessment order passed under section 143(3) read with section 147 of the Income-tax Act, 1961. 2. Disposal of objections raised by the assessee against the recorded reasons for reopening of assessment. 3. Compliance with principles of natural justice in the assessment process. Issue 1: Validity of Reassessment Order: The appeals of the assessee challenged the order of the Commissioner of Income Tax (Appeals) upholding the reassessment order passed under section 143(3) read with section 147 of the Income-tax Act, 1961. The assessee contended that the reassessment order was in contravention of the law and bad ab initio. The reasons for reopening the assessment were based on a search action conducted on a charitable trust, alleging tax evasion through donation payments. The Assessing Officer concluded that the trust was engaged in bogus activities and that the donation made by the assessee was not genuine. The assessee objected to these reasons, asserting the genuineness of the donation and challenging the validity of the reassessment. However, the objections were not disposed of by the Assessing Officer, leading to the argument that the assessment was bad in law. Citing relevant case law, the Tribunal quashed the assessment, emphasizing the importance of following due procedure and principles of natural justice in such matters. Issue 2: Disposal of Objections: The assessee raised objections against the recorded reasons for reopening the assessment, highlighting the genuineness of the donation made to the charitable trust. Despite the objections, the Assessing Officer did not address or dispose of them, leading to a contention that the assessment was invalid. The Tribunal, relying on legal precedents, emphasized the need for Assessing Officers to consider and dispose of objections raised by taxpayers in a timely manner to ensure procedural fairness and compliance with legal requirements. Failure to address objections can render the assessment void ab initio, as established in relevant case law. Issue 3: Compliance with Principles of Natural Justice: The Tribunal's decision to quash the assessment was based on the failure of the Assessing Officer to consider and address the objections raised by the assessee, thereby violating principles of natural justice. The Tribunal cited previous judgments by the Hon'ble Bombay High Court, emphasizing the importance of adhering to procedural requirements and ensuring expeditious disposal of reopening notices. The Tribunal's decision was consistent with the legal precedent that assessments conducted without due consideration of objections raised by taxpayers are liable to be invalidated. By upholding the assessee's appeal and quashing the assessment, the Tribunal reinforced the significance of procedural fairness and adherence to legal principles in the assessment process. In conclusion, the Tribunal allowed the appeals of the assessee, emphasizing the importance of addressing objections raised by taxpayers and ensuring compliance with principles of natural justice in the assessment process. The decision highlighted the need for Assessing Officers to follow due procedure and consider taxpayer objections to maintain the integrity and legality of assessment proceedings.
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