CIT(A) direction to initiate fresh reassessment proceeding after deciding objections set aside

CIT(A) direction to initiate fresh reassessment proceeding after deciding assessee’s objections set aside as reassessment was bad in law

ABCAUS Case Law Citation:
ABCAUS 2692 (2019) (01) HC

Important Case Laws Cited/relied upon:
Multiplex Trading & Industrial Co. Ltd. 170 (Delhi).

G.K.N Driveshafts (India) Ltd. v. ITO: (2003) 259 ITR 19 (SC); (2003) 1

The appeal was filed by the assessee against the order of Commissioner of Income Tax (Appeals) whereby he had directed the Assessing Officer (AO) to again proceed to make fresh reassessment from the stage of receipt of objections as per the ratio of GKN Drive Shafts.

The assessee had filed original return of income for the relevant assessment year. The Assessing Officer issued notice u/s 148 of the Act for reopening of the assessment after recording the reasons for reopening of the assessment.

The Assessing Officer in the reasons recorded has stated that the assessee has made cash deposits in Saving Bank Accounts maintained with Bank. The assessee was issued show cause notice for verification of source of cash deposit to which the assessee made no compliance.

Therefore the Assessing Officer inferred that assessee failed to disclose fully and truly all material facts necessary for his assessment.

The assessee demanded copy of reasons recorded which were supplied to the assessee.

Thereafter, the assessee submitted to the Assessing Officer that the original return filed by the assessee may be treated as the return filed pursuance to the notice u/s 148 of the Act. The assessee also filed objection against the reopening of the assessment before the Assessing Officer.

However, the Assessing Officer passed assessment order u/s 147 r.w.s. 143(3) of the Act without disposing the objections filed by the assessee.

The assessee filed appeal before the Commissioner of Income Tax (Appeals) and contended that since the assessment order was passed without disposing of the objections filed by the assessee against the reopening of the assessment, the re-assessment order passed by the Assessing Officer was bad in law.

The Commissioner of Income Tax (Appeals) after considering the submission of the assessee held that he had no inherent power to set aside the matter to the Assessing Officer therefore, he deemed it appropriate to cancel the impugned assessment order.

Thereafter the CIT(A) directed the Assessing Officer that he can again proceed to make fresh re-assessment proceedings from the stage of receipt of objections and thereafter to dispose off the said objections as per the ratio of G.K.N. Drive Shaft and after disposing of the objections of the assessee and thereafter if needed to reframe the fresh reassessment as per law.

Being aggrieved by the order of the Commissioner of Income Tax (Appeals) the assessee was in appeal before the Tribunal.

The contention of the assessee was that since the reassessment order was passed by the Assessing Officer u/s 147 r.w.s. 143(3) of the Act without disposing of the objections of the assessee for reopening of the assessment was bad in law the said reassessment order was liable to be quashed in view of the decision of Hon’ble High Court.

The Tribunal, following the Hon’ble High Court, set aside the order of the Commissioner of Income Tax (Appeals) directing the AO to commence the reassessment proceeding from the stage of receipt of objections to the reopening and allowed the grounds of appeal of the assessee

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