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2022 (11) TMI 447 - AT - Income TaxReopening of assessment u/s 147 - Non disposal of dispose off/adjudicate objection of the assessee - HELD THAT - The legal contention raised by the Ld. Counsel for the assessee is squarely covered in favour of the assessee before the judgement of Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd. 2002 (11) TMI 7 - SUPREME COURT and judgement of Hon ble Delhi High Court in the case of Ferrous Infrastructure (P.) Ltd. 2015 (5) TMI 871 - DELHI HIGH COURT as the AO failed to dispose off/adjudicate objection of the assessee vide letter dated 10.10.2017 to the re-opening of the assessment therefore, notice u/s 148 of the Act dated 30.03.2017, the impugned reassessment order u/s 147/144 and all proceedings and orders in pursuance to the said notice and reassessment order are quashed. Legal Ground Nos. 1 2 raised by the assessee are allowed.
Issues involved:
1. Validity of reassessment proceedings under sections 147 and 144 of the Income Tax Act, 1961. 2. Compliance with legal requirements in initiating reassessment proceedings. 3. Disposal of objections raised by the assessee before passing the reassessment order. Detailed Analysis: Issue 1: The appeal challenged the reassessment order for the assessment year 2010-11. The assessee contended that the assessment order was bad in law and against natural justice. The Assessing Officer (AO) initiated reassessment proceedings without disposing of the objections raised by the assessee, leading to a lack of opportunity for the assessee to be heard. Issue 2: The assessee argued that the AO failed to comply with the legal requirement of passing a speaking order to dispose of objections before proceeding with the assessment, citing the judgment in GKN Driveshafts (India) Ltd. vs. ITO & Ors. The assessee also referred to the judgment of the Delhi High Court in SABH Infrastructure Ltd. vs. ACIT, emphasizing the importance of providing reasons to the assessee at the initial stage of reassessment proceedings. Issue 3: The legal representative for the assessee relied on various judgments, including Ferrous Infrastructure (P.) Ltd. vs. DCIT, to support the contention that the AO's failure to pass a speaking order on the objections raised by the assessee rendered the reassessment order void ab-initio. The Tribunal noted that the AO did not dispose of the objections raised by the assessee before finalizing the reassessment order, contravening the legal requirement as per judicial precedents. The Tribunal, after considering the submissions and legal precedents, held in favor of the assessee. It found that the AO's failure to address the objections raised by the assessee before passing the reassessment order was a violation of legal requirements and principles of natural justice. Consequently, the Tribunal quashed the notice under section 148 of the Act, the reassessment order under sections 147/144 of the Act, and all proceedings and orders related to the reassessment. The appeal of the assessee was allowed based on the legal grounds presented. In conclusion, the Tribunal's decision highlighted the importance of complying with legal procedures and providing the assessee with a fair opportunity to present objections before finalizing reassessment proceedings under the Income Tax Act.
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