Order quashed for not deciding objections to reopening u/s 147

Order quashed for not deciding objections to reopening u/s 147. The objections filed by the assessee were not decide in the set aside proceedings.

ABCAUS Case Law Citation:
ABCAUS 1241 (2017) (05) ITAT

The Grievance:
The appellant assessee was aggrieved by the order passed by the Assessing Officer (‘AO’) without deciding objections filed by the assessee for initiation reassessment proceedings AO’) u/s 69B of the Income Tax Act, 1961 (‘the Act’) ignoring that 50% of the amount was invested by the wife of assessee.

Assessment Year : 2003-04 and 2004-05
Date/Month of Pronouncement: May, 2017

Important Case Laws Cited relied upon:
M/s. Shiva Rubber Industries vs. ITO

Brief Facts of the Case:
For both the years, the assessee had challenged the orders framing reassessment without complying with the mandatory conditions of section 147 to 151 and alleged that the directions of the Tribunal had  not been complied with by the AO in set aside proceedings.

Earlier the assessment order(s) for both the assessment years were set aside and matter was restored to Assessing Officer by ITAT. The Assessing Officer was directed to decide objections of assessee u/s 147/148 of the Act and decide the addition on merits afresh. The assessee filed objections u/s 147/148 before AO in set aside proceedings which were not adjudicated by the AO. Thus the assessee alleged that the order of ITAT was disobeyed.

Observations made by the Tribunal:
The Tribunal observed that in the earlier first round proceedings before ITAT, the Tribunal while deciding the departmental appeal and cross objections of assessee had restored the matter back to the file of Assessing Officer to re-deciding objections of the assessee u/s 147 and addition on merit.

The assessee did file objections to the reopening of the assessment before Assessing Officer. However Assessing Officer did not decide the objections of the assessee in the set aside proceedings. Therefore the reassessment orders wa liable to be quashed.

It was observed that the issue was covered in favour of the assessee in the case of M/s. Shiva Rubber Industries vs. ITO.

Held:
ITAT quash the reassessment proceedings for both the year and the addition made therein.