Assessment Reopening Ruled Invalid for Lack of Basis, Assessee's Objection Upheld

The Tribunal found the reopening of assessment to lack a valid basis, deeming the order bad in law due to a mechanical recording of reasons under section 148(2) and lack of application of mind. Consequently, the assessee's Cross Objection was allowed, and the Revenue's appeal was dismissed as infructuous/academic.

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Issues:
Appeal and Cross Objection against CIT(A)'s Order dated 21/09/2020 for AY 2011-12.

Analysis:
The case involved an Appeal and a Cross Objection by the Revenue and the Assessee against the CIT(A)'s Order. The initial assessment was completed on 28/03/2014, with adjustments including disallowance under section 40(a)(ia). The AO passed an order holding the assessee as an assessee-in-default for payments without deduction of tax at source. A notice u/s. 148(1) was issued on 29/03/2018, leading to reassessment proceedings. The CIT(A) allowed relief to the assessee on merits but dismissed the legal grounds. The Revenue challenged the relief granted, while the assessee contested the non-acceptance of its legal grounds. The Tribunal found the reopening of assessment to lack a valid basis, as the AO failed to specify any new material or misrepresentation by the assessee. The order was deemed bad in law due to a mechanical recording of reasons under section 148(2) and lack of application of mind. Consequently, the assessee's Cross Objection was allowed, and the Revenue's appeal was dismissed as infructuous/academic. The judgment was pronounced on July 22, 2022.

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