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TMI Blog2021 (9) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed it by a separate speaking order, however, it would not lead to nullity of the order. The case laws relied on by the ld. DR on this point are applicable to the facts of the present case. Accordingly, in the interest of justice, we vacate the orders of the lower authorities and remit this legal issue back to the file of the Assessing Officer for deciding the objections of assessee for reopening the assessment by a separate and speaking order, and in case the objections of the assessee is rejected, then the AO is required to pass a fresh assessment order, after adequate opportunity of being heard to the assessee. Appeal by the assessee is partly allowed for statistical purposes. - ITA No. 304/Bang/2018 (Assessment year: 2009-10) - - - Dated:- 17-9-2021 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER Appellant by : Shri Ravi Shankar, Advocate Respondent by : Smt. H. Kabila, Addl.CIT(DR)(ITAT), Bengaluru. ORDER Per Chandra Poojari, Accountant Member This appeal by the assessee is directed against the order dated 01.12.2017 of the CIT(Appeals)-3, Bengaluru for the assessment year 2009-10 on the following grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tashildhar wherein it has been stated that the Property is 8 KMS from Kengeri Muncipality, when Kengeri Municipality is not enumerated in the notification of the central Government on the facts and circumstances of the case. e) The learned authorities below, erred in holing that the property is within 8 Kms of BBMP on the date of sale of land without any factual basis on the facts and circumstance of the case. f) The assessing officer and the commissioner failed to appreciate that the land situated in Panchyat by no stretch of imagination can be treated as capital Asset on the facts and circumstance of the case. g) The assessing officer and the commissioner erred in law in not appreciating that Panchayat and Muncipalities are different as per our constitution and no land which is part of Panchayat can be treated as capital asset on the facts and circumstance of the case. h) The learned assessing officer has relied on notifications by urban development department of the state government which are all issued subsequent to the date of the agreement or sale deed and thus not relevant for the year under assessment on the facts and circumstance of the case. i) The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is impermissible in law on the facts and circumstance of the case. 9. Without prejudice to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies itself liable to be charged to interest under section 234 A 234 B of the Income Tax Act under the facts and circumstances of the case. Further the levy of interest under section 234 A 234 B of the Act is also bad in law as the period, rate, quantum and method of calculation adopted on which interest is levied are all not discernable and are wrong on the facts of the case. 10. The appellant denies the liability to pay interest under section 234A, of ₹ 32,05,866/ - and 234B of ₹ 33,92,253/ - in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied are not discernable from the order and hence deserves to be cancelled on the facts and circumstances of the case. 11. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 12. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement was executed on 28.12.2005 ( much before BBMP was notified and areas of earlier Bangalore Mahanagara Palike was far less than present BBMP). Though the sale deed was registered on 24.09.2008, the sale agreement was executed on 28.12.2005 and contended that the transfer had already taken place on 28.12.2005 and the execution of registered sale deed on 24.09.2008 was merely a formality to confirm the legal ownership of the purchaser and accordingly requested to close the issue placing reliance on the decision of Hon'ble ITAT Ahmedabad in the case ACIT Dharamshibhai Soriani in ITA NO.1237 1 AHD 12013 for the A. Y.2008-09. iii) The assessee further contended the sale consideration paid for all the- five co-owners was of ₹ 10,50,0001 - and the one fifth share of the assessee amounts to ₹ 2,10,0001- only and requested to drop the proceedings initiated u/s.148. 6. Now the contention of the ld. AR is that the objection of the assessee for reopening of assessment was not disposed by the AO by separate speaking order. For this he relied on the judgment in the case of Lakshman in ITA No.382/Bang/2018 dated 8.2.2018 wherein it was held as follows:- 8. Aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is the jurisdictional High Court as far as this Tribunal is concerned in the case of Deepak Extrusions Pvt. Ltd., (supra) supports the case of the assessee. The other decisions of the Hon ble Gujarat High Court and the Hon ble Madras High Court referred to in the order of the CIT(A) being the decisions of the non-jurisdictional High Courts, are not binding in the light of the decision of the Hon ble jurisdictional High Court. Consequently, we uphold the grievances projected by the assessee in ground No.3 n) and hold that the order of assessment passed is vitiated and liable to be annulled. In view of the above conclusion, we are of the view that the other issue raised by the assessee in its appeal does not require examination. 7. Contrary to this, the ld. DR submitted that in view of the judgment of the Hon ble Supreme Court in in SLP in the case of Home Finders Housing Ltd. v. ITO, 256 Taxman 59 (SC), non-disposing of the objection raised by the assessee against the reopening of assessment by separate and speaking order is only a procedural matter and it does not make the assessment bad in law and he submitted that on this reasoning, assessment order cannot be quashed. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 6. We have heard both the parties and have gone through the facts of the case. As is apparent from the facts of the case, the ld. CIT(A) quashed the reassessment proceedings merely because the AO failed to dispose of the objections raised by the assessee in their letter dated 5.11.2009. There is no material before us, suggesting that the assessee raised any objections against issuance of notice u/s 148 of the Act immediately on receipt of notice dated 27.3.2009 issued by the AO or on receipt of a copy of the reasons on 9.9.2009. In terms of decision of Hon ble Supreme Court in the case of GKN Shaft (India) Ltd. Vs. CIT, 259 ITR 19(SC), if the AO did not dispose of the objections raised by the assessee in his letter dated 5.11.2009, the matter at best could be restored to the file of the AO for doing the needful. The approach of the ld. CIT(A) in quashing the assessment is not in accordance with law. In GKN Driveshafts(supra), the Hon'ble Apex laid down an elaborate procedure as to the manner of dealing with objections raised against a notice u/s 148 of the Act, in the following words: However, we clarify that when a notice under section 148 of the Income-tax Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reassessment notice in two stages, that is, (i) raising preliminary objections before the Assessing Officer and in case of failure before the Assessing Officer; (ii) challenging the speaking order of the Assessing Officer under section 148 of the Act. 6.2 Hon ble Gujrat High Court in the case of Arvind Mills Ltd. vs. ACWT [2004] 270 ITR 469 (Guj) while following the aforesaid decision concluded that once the Supreme Court stated that the AO was bound to dispose of the objections by passing a speaking order, it was not open to the authorities to contend that in the absence of any provision in the Act, the authorities could not have passed a speaking order. Hon ble Delhi High Court in the case of Delhi Tourism Transport Development Corporation Ltd. vs. ACIT [2004] 141 Taxman 361 (Delhi), while relying upon the aforesaid decision of the Hon ble Apex Court in GKN Driveshafts (India) Ltd.(supra) directed to follow the procedure laid down by the Hon ble Apex Court and pass a speaking order before passing the assessment order. 6.3 While adjudicating a similar issue, Hon ble Gujrat High Court in the case of MGM Exports vs. DCIT [2010] 23 DTR 356 (Guj) observed as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r reassessment has been issued, an assessee is required to file the return and seek reasons for issuance of such notice. The AO is then bound to supply the reasons within a reasonable time. On receipt of reasons, the assessee is entitled to file preliminary objections to issuance of notice and the AO is under a mandate to dispose of such preliminary objections by passing a speaking order, before proceeding with the assessment in respect of the assessment year for which such notice has been issued. 7. In view of above settled legal position, we consider it fair and appropriate to vacate the findings of the ld. CIT(A) as also set aside the reassessment order and remit the matter to the file of the AO with the directions to follow the procedure laid down by the Hon ble Apex Court reiterated by the Hon ble jurisdictional High Court. The AO shall dispose of the preliminary objections by passing a speaking order and only thereafter proceed with the reassessment in accordance with law. With these observations, ground nos.1 2 in the appeal are disposed of. As a corollary, the other ground nos. 3 4 raised in the appeal do not survive for adjudication at this stage and are , therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the peculiar facts and circumstances of this case that the assessee filed the objection against the Notice under Section 148 only on 28.3.2013 and the Assessing Officer was left with no option but to finalise the assessment before the expiry of limitation for completing the assessment on 31.3.2013. Therefore the Assessing Officer has completed the assessment vide order dt.28.3.2013 whereby the objections of the assessee were also disposed off. Accordingly, we find that decisions relied upon by the ld. DR on this point are applicable in the facts of the present case and therefrom, we set aside the impugned order of the CIT (Appeals) as well as the assessment order and remit the matter to the record of the Assessing Officer for deciding the objections of the assessee by a separate speaking order and in case the objections of the assessee are rejected then after allowing the assessee a period of four weeks the Assessing Officer may pass the assessment order. 11. In the present case, the AO issued notice u/s. 148 dated 29.3.2016 served on the assessee on 30.3.2016. There was change in the incumbent of office of AO and the proceedings continued vide letter dated 26.7.2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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