TaxTMI 
TaxTMI 
2021 (7) TMI 75
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...., the appellate order so framed be held as bad and illegal, as: (i) The same is framed in breach of the principles of natural justice; and (ii) The same is passed without application of mind to the facts and the submissions brought on record by the Appellant. WITHOUT PREJUDICE TO THE ABOVE 2. REASSESSMENT 2.1 The Ld. CIT (A) erred in confirming the action of the A.O. in initiating reassessment proceedings and framing the assessment of the Appellant by invoking the provisions of section 147 r.w.s. 148 of the Income tax Act, 1961 ["the Act"]. 2.2 While doing so, the Ld. CIT (A) failed to appreciate that: (i) The case of the appellant did not fall within the parameters laid down by section 147 r.w.s. 148 of the Act; (ii) The necessary preconditions for initiating and completion thereof were not satisfied. 2.3 It is submitted that in the facts and the circumstances of the case, and in law, the reassessment framed is bad, illegal and void. WITHOUT FURTHER PREJUDICE TO THE ABOVE 3.1 The Ld. CIT (A) erred in confirming the addition made by the A.O. of Rs. 27,07,327/- u/s. 68 of the Act, on account of alleged ....
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....erred to the following decision of ITAT in the case of Manish K. Ajmera(HUF) (ITA No. 5001/Mum/2018 order dated 8.12.2020), the order of the ITAT is reproduced as under :- 3. Ld. Counsel for the assessee at the outset submitted that the reassessment order passed by the Assessing Officer is bad, illegal and without jurisdiction for the reason that the Assessing Officer ignored the mandatory requirement of disposing off objections raised by the assessee for reopening the assessment u/s. 147 of the Act. Ld. Counsel for the assessee referring to Para No.4 of the re-assessment order at Page No.11,submitted that the Assessing Officer stated that assessee never submitted any objections and therefore disposing off the objections does not arise is contrary to record. Referring to Page Nos. 16 to 27 of the Paper Book Ld. Counsel for the assessee submits that in the course of proceedings before the Assessing Officer assessee made elaborate submissions and preliminary objections on reopening of assessment and these objections were never disposed off by the Assessing Officer before framing the assessment, therefore, rendering the assessment order bad in law. 4. Ld. Counsel for....
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....s executed are genuine, and at the prevailing market rate, as per the trend of the market and are duly supported by all possible evidences. 4.On perusing your reason for reopening of assessment it is seen that, you have relied upon two so called evidences to support the allegation, A. The statement of Shri Jasmin Ajmera taken during the search operation and B. Alleged evidences collected in course of the search proceeding against one Shri Shirish C. Shah. In this preliminary submission, we deal with each of the two allegations as under: - A. Statement of Shri Jasmin Ajmera:- Here, the sole reliance is placed on the fact that in the statement Shri Jasmin Ajmera he had agreed to offer the amount of capital gain for taxation. In this regard, the following points are noteworthy:- i.First of all, except for this statement there is absolutely no evidence in support of the allegation. No incriminating document/ evidence were found during the search from his or our property. Now, as far as the sole reliance on statement is concerned, we understand that such action is contrary to the specific directions issued by the CB....
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....ning into thousands of pages. You have also given hard copies of some affidavits of various persons, who are alleged to be directors of various companies, again alleged to be managed by Shirish Shah. In this regard, we have to submit as under:- 1. Data provided of BSE Ltd1. It appears that this data shows sale and purchase transactions of Prraneta. 2. Our preliminary observation on going through this data is as under: i. It is seen that the scrip was actively traded during this period. ii. It is seen that there were multiple buyers and sellers in the market. iii. It is seen that there was participation from all kind of cliental like retails/Corporate/Institutions. iv. It is further seen that, In fact many parties who had purchased the shares sold by us in the market had resold in the open market. v. Please note this data confirms our transactions are executed through the Stock Exchange, at the prevailing market rate and same authenticates the bills cum contracts and bank statements already submitted by us in our previous submissions. 3. We further would like to draw your kind attention that, It is also a matter....
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....us and which alleged to have been managed and owned by Shirish Shah are public limited listed companies. For example, Avance Technologies Ltd./Mahan Industries Ltd. and few more. Sir, How can that be possible? We believe that public listed companies are owned by the shareholders of the said company. 7.Kind attention Is also drawn to the quantity of the shares, i.e. to say that the quantity of the shares which were sold by us and the shares purchased by the purchasers, as shown in reason for reopening of assessment miss matches. 8.Please note that total quantities of shares of Prraneta alleged to have been purchase by companies managed and controlled by Shirish C. Shah are much lesser than the quantities traded in the exchange. II.THE SCANNED DOCUMENTS PROVIDED IN THE PEN DRIVE:- 1.At the outset, we fail to understand the purpose of giving me 6000 to 7000 pages of material, in the pen drive form, which, as you are fully aware, is not humanly possible for anybody to scan through and verify and, that too, in a short span of time. We, therefore, have to request you to give copies of only those material on which you intend to rely while framing assess....
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....as under: i) First of all, Ex-facie, these affidavits do not at all directly, indirectly or remotely concern us, nor do they indicate involvement of ourselves in any transaction, much less in any dubious transaction. ii) Besides, our few observations regarding the affidavits are as under: (a) In all, there are 134 affidavits/declarations and all are stereotyped. (b) Some documents are styled as "affidavits" and some documents are styled as "declarations". The affidavits do not appear to be legally and validly executed document of oath. All stamp papers appear to be purchased from one vendor. Almost all affidavits 134 on oath are not arised by only three notaries, and that too within few days, (81affidavits are executed notarized on one single day), which is difficult to believe as the deponents are scattered at different places. Even the format of these affidavits is not as per the Oath Act. It is not properly verified, identified or administered. (c) The purported Declarations are not oil Paper as required under the law. (d) There is no mention of Notarial Register Sr. No. on any of the said purported Declarations and ....
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....d u/s. 143(3) r.w.s. 147of the Act. While quashing the re-assessment order the Coordinate Bench observed as under: - "2.1The Ld. Authorized Representative for Assessee [AR], at the outset, submitted that the objections raised by the assessee against reopening the assessment were never disposed-off by Ld. Assessing Officer as mandated by the decision of Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. Vs. ITO [259 ITR 19] and therefore, the reassessment proceedings stood vitiated in the eyes of law. Reliance has been placed on the decision of Jurisdictional Hon'ble Bombay High Court rendered in KSS Petron Private Limited Vs. ACIT [ITA No. 224 of 2014 dated 03/10/2016] to submit that the matter could also not be restored back to the file of Ld. AO to pass order on objections raised by the assessee. 2.2On the other hand, Ld. CIT-DR relied on para 3.3(a) of the impugned order which would read as under: - 3.3(a) The appellant's first objection is that the AO did not dispose-off objections raised by it in respect of re-opening of the assessment proceedings. On this issue the appellant has relied on various caselaws. I have considered the facts of ....
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....ing notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the Assessing Officer for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the Assessee by reviving stale/old matters. 9.In fact, to ensure that reopening notices are disposed of, expeditiously the parliament itself has provided in Section 153(2) of the Act a period of limitation within which the Assessing Officer must pass an order on the notice of reopening i.e. within one year from the end of the financial year in which the notice was issued. In fact, Section 153 (2A) of the Act as in force at the relevant time itself provides that an order of fresh Assessment, consequent to the order of Tribunal under Section 254 of the Act, would have to be passed within one year from the end of the financial year in which the order under Section 254 of the Act, was passed by the Tribunal and received by the Commissioner of Income Tax. 10. The Director of the appellant has filed an affidavit dated 19th September, 2006. In the affidavit, it is stated that c....
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....nt orders are legally unsustainable. Now the issue which arises is, whether in such circumstances, the re-assessment orders passed have to be quashed as void ab initio or they are to be restored back to the Assessing Officer for enabling him to dispose of the objections of the assessee and pass fresh assessment orders. In our view, the issue is no more res integra in view of the decision of the Hon'ble Jurisdictional High Court in KSS Petron Pvt. Ltd. (supra), wherein, the Hon'ble Jurisdictional High Court has held that if the re-assessment order is passed without disposing of the objections raised by the assessee, they have to be quashed and no second opportunity can be given to the Assessing Officer topass fresh assessment orders after disposing of the objections of the assessee. The same view has been expressed by the Co-ordinate Bench in the decisions cited by the learned Sr. Counsel for the assessee. Upon careful reading of the decision of the Hon'ble Supreme Court in Larsen Toubro Ltd. v/s State of Jharkhand & 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 s....
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....essee and thereafter complete the assessment. Moreover, the decision of the Hon'ble Supreme Court in GKN Driveshafts India Ltd. (supra) has not been overruled and still holds the field. The next decision cited by the learned Departmental Representative is of the Hon'ble Jurisdictional High Court in NTUC Income Insurance Co-operative Ltd. v/s DDIT, [2013] 33 taxmann.com 255 (Bom.). On a careful reading of the aforesaid decision, it is evident that the facts on the basis of which the Hon'ble Jurisdictional High Court restored back the issue to the Assessing Officer to re-frame assessment de novo is completely different from the present appeal. In the case before the Hon'ble Jurisdictional High Court, the Assessing Officer had not only communicated the reasons for reopening, but, by a separate communication had intimated the assessee that all conditions laid down in GKN Driveshafts India Ltd. has been met. Admittedly, the assessee did not challenge the aforesaid decision of Assessing Officer. Subsequently, the 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 o....
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....king order before proceeding with the reassessment in respect of the Assessment Year 1997-98. However, the Assessing Officer, without proceeding to dispose of the objections raised by the Appellants by passing a speaking order, straight away proceeded to make the assessment order dated 26th March, 2004, bringing to charge taxable expenditure on Rs.10,22,73,987/-. The assessment order dated 26th March, 2004, no doubt, deals with the objections raised by the Appellant and purports to dispose of the same. Ms. Linhares contends that this is a sufficient compliance with the procedure set out in GKN Driveshafts (India) Ltd. (supra), assuming that the same is at all applicable to the proceedings under the said Act. Mr. Dada, however, submits that such disposal in the assessment order itself does not constitute the compliance with the mandatory conditions prescribed by the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. (supra). In support, as noted earlier, Mr. Dada relies upon Bayer Material Science (P) Ltd. (supra) and KSS Petron Private Ltd. (supra). 14.The contention of Ms. Linhares that the decisions relied upon by Mr. Dada relate to the provisions of the Inco....
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.... Ltd. (supra) or, whether it was necessary for the Assessing Officer to have first disposed of the Appellant's objections by passing a speaking order and only upon communication of the same to the Appellants, proceeded to reopen the assessment for the Assessment Year 1997-98. 19.Virtually, an identical issue arose in the cases of Bayer Material Science (P) Ltd. (supra) and KSS Petron Private Ltd. (supra) before the Division Benches of our High Court at Bombay. 20.In Bayer Material Science (P) Ltd. (supra), by a notice dated 6/2/2013, the Revenue sought to reopen the assessment in the year 2007-08. The Assessee filed a revised return of income and sought for reasons recorded in support of the notice dated 6.2.2013. The reasons were furnished only on 19.3.2015. The Assessee lodged objections to the reasons on 25th March, 2015. The Assessing Officer, without disposing of the Petitioner's objections, made a draft assessment order dated 30th March, 2015, since this was a matter involving transfer pricing. In such circumstances, the Division Bench of this Court, set aside the assessment order by observing that the Court was unable to understand how the Assessing Officer....
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....ssessing Officer to pass a further/fresh order. If this is permitted, it would give a licence to the Assessing Officer to pass orders on reopening notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the Assessing Officer for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the Assessee by reviving stale/old matters." 24.According to us, the rulings in Bayer Material Science (P) Ltd. (supra) and KSS Petron Private Ltd. (supra) afford a complete answer to the contentions raised by Ms. Linhares in defence of the impugned order. 25.Since, in the present case, the Assessing Officer has purported to assume the jurisdiction for reopening of the assessment, without having first disposed of the Assessee's objections to the reasons by passing a speaking order, following the law laid down in GKN Driveshafts (India) Ltd. (supra), Bayer Material Science (P) Ltd. (supra) and KSS Petron Private Ltd. (supra), we are constrained to hold that such assumption of jurisdiction by the Assessing Officer was ultra....