2015 (10) TMI 1490 - AT - Income Tax

Reopening of assessment - Unaccounted cash receipts introduced in the previous year - Held that - It is not in dispute that the assessee filed his objections against the issuance of notice u/s 148 of the Act vide his letter dated 11.11.2009 which was received by the office of the Assessing Officer on 16.11.2009. Thereafter, the Assessing Officer passed the impugned re-assessment order on 19.11.2009, disposing off the objections to re-assessment proceedings of the assessee in the order itself. Thus, these facts show that the objections raised by the assessee against the issuance of notice u/s 148 of the Act were not disposed off by the Assessing Officer by passing a speaking order thereon and allowing reasonable time to the assessee after communicating the fate of the objections before proceeding with the reassessment. See General Motors India P. Ltd. v. DCIT 2012 (8) TMI 714 - GUJARAT HIGH COURT Thus he impugned order of re-assessment passed by the Assessing Officer without disposing off the objections raised by the assessee against the issuance of notice u/s 148 by a separate order is liable to be quashed. - Decided in favour of assessee.

Summary

Issues:
1. Jurisdiction of reopening assessment
2. Validity of re-assessment order
3. Disposal of objections by Assessing Officer
4. Compliance with legal procedures

Jurisdiction of Reopening Assessment:
The appeal was filed against the order of the Commissioner of Income-Tax (Appeals) in Ahmedabad. The appellant challenged the reopening of the assessment, arguing that it was without jurisdiction and void ab initio. The Authorized Representative of the assessee contended that objections to the notice under section 148 were raised, but the re-assessment order was passed without disposing of these objections separately. Citing a previous case, it was argued that the objections should have been addressed before proceeding with the reassessment. The Hon'ble Gujarat High Court's decision emphasized the necessity of the Assessing Officer deciding on objections separately before passing the reassessment order.

Validity of Re-assessment Order:
The Assessing Officer passed the re-assessment order without addressing the objections raised by the assessee regarding the notice under section 148. The Tribunal, following the precedent set by the Hon'ble Gujarat High Court, held that the re-assessment order was liable to be quashed due to the failure to dispose of the objections separately. The Tribunal emphasized the importance of allowing the assessee reasonable time to challenge the order on objections before proceeding with the assessment order, which was not done in this case.

Disposal of Objections by Assessing Officer:
The Tribunal noted that the assessee had filed objections against the notice under section 148, but these objections were not addressed separately by the Assessing Officer. The failure to pass a speaking order on the objections and allowing reasonable time to the assessee after communicating the fate of the objections before proceeding with reassessment led to the quashing of the re-assessment order. The Tribunal highlighted the necessity of the Assessing Officer deciding on objections and communicating the decision to the assessee before passing the assessment order.

Compliance with Legal Procedures:
The Tribunal, in line with the decision of the Hon'ble Jurisdictional High Court, emphasized the importance of following proper procedures in reassessment cases. Quashing the re-assessment order due to the failure to dispose of objections separately underscored the significance of adhering to legal requirements and providing the assessee with an opportunity to challenge decisions on objections before finalizing the assessment order. The appeal was allowed based on the jurisdictional and procedural irregularities in the re-assessment process.