ACIT vs. Mondal Construction Company Limited - (Income Tax Appellate Tribunal) (04 Jan 2023)

Assessment framed without disposing of objections filed by the assessee against the re-opening of assessment cannot be sustained

MANU/IK/0009/2023

Direct Taxation

Present is an appeal preferred by the assessee against the order of the Commissioner of Income Tax (Appeals) Kolkata ['CIT(A)'] for the assessment year 2014-15. The legal issue raised by the revenue is that, the Learned CIT(A) has erred in quashing the order AO on the ground that, the AO has not disposed off the objections filed by the assessee against the re-opening of assessment.

The undisputed facts are that the AO has not disposed off the objection filed by the assessee against the re-opening before framing the assessment which is a substantive defect which goes to the root of the matter. It is trite law that, the assessment framed without disposing of objections filed by the assessee against the re-opening of assessment is not a valid assessment and cannot not be sustained.

The case of the assessee finds support from the decision of the GKN Driveshafts (India) Ltd. vs. DCIT wherein the Apex Court has held that when a notice under Section 148 of the Income Tax Act, 1961 (IT Act) is issued and the assessee has filed its return of income and sought the reasons for issuance of notice under Section 148 of the Act, the AO is bound to furnish the copy of reasons within the reasonable time and assessee on receipt of the reasons is entitled to file objections to issuance of notice. The Hon'ble Apex Court held that, the AO is bound to dispose of the objections filed by the assessee by passing a speaking order. However in the instant case, the AO has not disposed off the objections filed by the assessee. The order of learned CIT(A) by dismissing the appeal of the revenue. The legal ground raised by the revenue is dismissed. The appeal of the revenue is dismissed.

Tags : RE-OPENING ASSESSMENT LEGALITY