2022 (1) TMI 1468 - HC - Income Tax

Calcutta HC Upholds Tribunal Ruling: Reassessment Proceedings Deemed Legally Flawed, Relief Granted to Assessee.

The HC of Calcutta dismissed the revenue's appeal under Section 260A of the Income Tax Act, 1961, affirming the ITAT's decision that the reassessment ... Validity of Reassessment u/s 147 - reasons to believe - whether the order passed by the Tribunal affirming the order passed by the CIT (A) holding that the reassessment was bad in law calls for interference? - HELD THAT:- We find that initially the assessing officer did not comply with the mandate in GKN Driveshaft ( India) Ltd [2002 (11) TMI 7 - SUPREME COURT] in the sense that he did not pass a speaking order on the objection given by the assessee to the proposal to reassess the income. When this order was put to challenge before the CIT (Appeals), the order was set aside and the matter was remanded to the assessing officer to pass a speaking order on the objection by keeping the appeal pending on the file of the CIT(A). Despite such opportunity, the assessing officer failed to follow the mandate laid down in GKN Driveshaft (India) Ltd. When the appeal was taken up by the CIT (Appeals), this aspect was noted and relief was granted to the assessee. This order was tested for its correctness by the Tribunal and on facts we find that the Tribunal was right in holding that the order passed by the CIT (Appeals) holding that the reassessment proceedings were bad in law had attained finality. The High Court of Calcutta heard an appeal by the revenue under Section 260A of the Income Tax Act, 1961 against an order passed by the Income Tax Appellate Tribunal. The Court found that the Tribunal was right in holding that the reassessment proceedings were bad in law, and relief was granted to the assessee. The appeal was dismissed, and the application for stay was also dismissed.