AI Drafter 
TaxTMI 
TaxTMI 
2020 (4) TMI 530
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....ficer by a speaking order now stands remedied. 2. The learned CIT(A) erred in confirming the action of the assessing officer in restricting the deduction under section 35(l)(iv) of the Income-tax Act ("ITA") to Rs. 1,02,86,739 i.e. after excluding government grant of Rs. 61,13,697 received by the appellant as against Rs. 1,64,00,436 claimed by the appellant. 3(a) The learned CIT(A) erred in confirming the action of the assessing officer in reducing certain expenses from the STP profits while computing deduction under section 10A of the ITA. (b) The learned CIT(A) erred in directing the assessing officer to follow the ratio of the decision taken in the appellant's own case for assessment year 2004-05 wherein the learned CIT(A) had upheld the reduction of unallocable expenses on proportionate basis from the STP profits while computing deduction under section 10A of the ITA. (c) The learned CIT(A) further erred in directing the assessing officer to reduce a percentage of depreciation on the building in which the STP is located on the ratio of FSI occupied by the STP from the STP profits while computing deduction under section 10A of the ITA. ....
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....ssee's challenge to the reopening is that the challenge was noted by learned CIT(A). He agreed with the assessee that the Assessing Officer has failed to pass a speaking order on objection raised by the assessee to the reopening. However, learned CIT(A) was of the opinion that the same is a curable defect, hence, he noted in the course of appellate proceedings the Assessing Officer was given a opportunity to reply to the objections raised by the assessee vide his order dated 11.12.2007. Learned CIT(A) noted the following response by the Assessing Officer :- "In this case assessee has objected to the reopening of assessment u/s. 147 on the ground that this is a change of opinion by the assessing officer had the same is not permitted u/s. 147 of the Act. Contention made by the assessee is not acceptable. In the case of Indo Aden Salt Manufacturing & Trading Co. P. Ltd. (159 ITR 624) it has been held that mere production of evidence before the assessing officer is not enough. There may be omission or failure to make a true and full disclosure, if some material for the assessment lay embedded in the evidence which the assessee could have uncovered but did not, and then it is t....
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..... Firstsource Solutions Ltd. (supra) has considered similar issue. By elaborate order the Tribunal came to the conclusion that in view of the Hon'ble Jurisdictional High Court decision, non-disposal of the objection by the Assessing Officer by speaking order is fatal to the assessment and matter cannot be restored back to the Assessing Officer. The Tribunal also accepted that Hon'ble Mdaras High Court decision is contrary to the view expressed by Hon'ble Jurisdictional High Court. 11. We may gainfully referred to the adjudication by the Tribunal in the above case as under :- "6. Shri Farookh Irani, learned Sr. Counsel for the assessee strongly supporting the decision of learned Commissioner (Appeals) submitted, non- disposal of the objections raised by the assessee by the Assessing Officer before completion of the assessment is not a mere procedural irregularity but affects the jurisdiction of the Assessing Officer to pass the assessment orders. Therefore, he submitted, such defect in the assessment orders is not a curable one which can be rectified by restoring it again to the Assessing Officer. In support of such contention, learned Sr. Counsel for the ass....
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....nd & Ors., in Civil Appeal no.5390/2007, cited by learned Departmental Representative, we find it to be not applicable to the facts of the present case, as the said decision is not on the issue of validity of re- assessment order on account of non-disposal of objection raised by the assessee. It is relevant to observe, post conclusion of hearing of the appeal, the learned Departmental Representative has submitted a note citing certain decisions in support of the proposition that non- disposal of objection is a procedural irregularity, hence, the assessment order should be set aside for enabling the Assessing Officer to dispose of the objections and pass a fresh assessment order. The first decision relied upon by the learned Departmental Representative is, Home Finders Housing Ltd. v/s ITO, [2018] 94 taxmann.com 84 (SC). This is a matter arising out of a judgment delivered by the Hon'ble Madras High Court holding that non-disposal of objection before completion of assessment is a procedural irregularity which can be cured by setting aside the assessment order to the Assessing Officer for disposing of assessee's objection and thereafter completing the assessment. Against the aforesai....
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....he reassessment order was subjected to the proceedings under section 263 of the Act. In of revision proceeding the assessee contended that due to lack of opportunity various documents/evidences could not be produced before the Assessing Officer. Considering the aforesaid submission of the assessee, the Commissioner set aside the assessment order with a direction to frame de novo assessment. During the fresh assessment proceeding assessee pleaded that the objection against reopening of assessment should be disposed of first. In the aforesaid factual context, the Hon'ble Jurisdictional High Court did not entertain assessee's plea. However, the Hon'ble Jurisdictional High Court in KSS Petron Pvt. Ltd. (supra), in no uncertain terms, has held that if the Assessing Officer before completion of assessment has not disposed of the objection, the assessment order cannot be restored back to the Assessing Officer for framing assessment de novo after disposal of the objections of the assessee. Though, the Hon'ble Madras High Court in case of Home Finders Housing Ltd. referred to earlier as well as the Hon'ble Gujarat High Court in MGM Exports v/s DCIT, [2010] 323 ITR 3....