Assessing Officer's Failure to Address Objections Leads to Cancellation of Assessment

The Tribunal canceled the assessment due to the Assessing Officer's failure to address objections challenging the validity of reopening under section 143(3)/147, citing a previous Tribunal decision and a Supreme Court case. Consequently, the issues raised by the assessee challenging the addition made under section 2(22)(e) were deemed infructuous, leading to the allowance of the assessee's appeal. The Tribunal pronounced the order in favor of the assessee on February 23, 2018.

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Issues: Validity of assessment made under section 143(3)/147, Addition made under section 2(22)(e)

Validity of assessment made under section 143(3)/147:
The appeal was against the order of the ld. Commissioner of Income Tax (Appeals) challenging the validity of the assessment made by the Assessing Officer under section 143(3)/147. The Assessing Officer had reopened the assessment and issued a notice under section 148. The assessee requested to treat the original return as a response to the notice. The assessment was completed, adding deemed dividend under section 2(22)(e) of the Act. The appeal was dismissed by the ld. CIT(Appeals), leading to the appeal before the Tribunal. The assessee raised preliminary issues regarding the validity of the assessment.
The Tribunal found that the objections raised by the assessee challenging the validity of reopening were not considered or disposed of by the Assessing Officer before completing the reassessment. Citing a previous Tribunal decision and a Supreme Court case, it held that passing an assessment order without addressing objections challenging the validity of reopening was bad in law. Following the Supreme Court decision, the Tribunal canceled the assessment due to the Assessing Officer's failure to address the objections raised by the assessee.

Addition made under section 2(22)(e):
Due to the decision on the preliminary issue, the Tribunal found the issues raised by the assessee challenging the addition made by the Assessing Officer in the assessment to be infructuous. The Tribunal did not find it necessary to decide on these issues due to the cancellation of the assessment. Consequently, the appeal of the assessee was allowed based on the decision on the preliminary issue, and the Tribunal pronounced the order in favor of the assessee on February 23, 2018.

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