TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 1598
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 30.03.2012 by recording the reason that during the course of search proceedings in case of Shri Sohanraj Mehta as well as M/s. Mehta Associates on 10.10.2009 a number of incriminating documents pertaining to unaccounted sales transactions of Gutka made by Shri Sohanraj Mehta, C & F Agent of Rasiklal Manikchand Group. The seized documents also indicate that Shri Sohanraj Mehta had made various payments in cash including the payment to the assessee to the extent of Rs. 32,31,09,000 on the instruction of Shri Rasiklal Manikchand during the period from April, 2003 to October, 2006. One of the ledger extract seized showed payments of Rs. 7,16,22,000 on 8.10.2006. Accordingly, the Assessing Officer was of the view that the said cash transactions constitute the income to the tune of Rs. 32,31,09,000 which has escaped assessment for the Assessment Years 2005-06 to 2007-08. The Assessing Officer accordingly reopened the assessment inter alia for the year under consideration to assess the income of Rs. 3,91,71,662. The Assessing Officer completed the reassessment under Section 147 r.w.s. 143(3) on 20.3.2013 whereby the addition of Rs. 5 Crores was made by the Assessing Officer. Aggrieved by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ith direction to Assessing Officer to pass a speaking order on the objection as taken by the assessee against Notice under Section 148. The ld. DR then referred to the decision of Hon'ble Bombay High Court in the case of Allana Cold Storage Ltd. Vs. ITO (supra) and submitted that in the identical circumstances where the Assessing Officer did not decide the objection separately the Hon'ble High Court has set aside the matter to the Assessing Officer for passing a separate speaking order on the objection after hearing to the assessee. He has then referred to the decision of the co-ordinate Bench of this Tribunal dt.23.11.2012 in the case of ACIT Vs. Mukut Mahal Banquet Pvt. Ltd. (supra) and submitted that after considering all the decisions on this point the Tribunal has set aside the matter with direction to the Assessing Officer to follow the principle laid down by the Hon'ble Apex Court as reiterated by the Hon'ble jurisdictional High Court in the case of Sat Industries Pvt. Ltd. as well as the decision of Hon'ble Gujarat High Court in the case of MGM Exports Vs. DCIT 230 DTR 356. 4. On the other hand, the learned Authorised Representative has submitted that o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s so and the assessment order has to be passed thereafter. After considering the relevant decisions on this point the co-ordinate Bench of Delhi Tribunal in the case of ACIT Vs. Mukut Mahal Pvt. Ltd. (supra) has analysed the legal proposition in paras 6 & 7 as under : " 6. We have heard both the parties and have gone through the facts of the case. As is apparent from the facts of the case, the ld. CIT(A) quashed the reassessment proceedings merely because the AO failed to dispose of the objections raised by the assessee in their letter dated 5.11.2009 .There is no material before us, suggesting that the assessee raised any objections against issuance of notice u/s 148 of the Act immediately on receipt of notice dated 27.3.2009 issued by the AO or on receipt of a copy of the reasons on 9.9.2009.In terms of decision of Hon'ble Supreme Court in the case of GKN Shaft (India) Ltd. Vs. CIT,259 ITR 19(SC), if the AO did not dispose of the objections raised by the assessee in his letter dated 5.11.2009, the matter at best could be restored to the file of the AO for doing the needful. The approach of the ld. CIT(A) in quashing the assessment is not in accordance with law. In GKN Driveshaf....
X X X X Extracts X X X X
X X X X Extracts X X X X
....#39;s case [2003] 259 ITR 19 in the year 2003. In my view, therefore, the GKN Driveshafts (India) Ltd. 's case [2003] 259 ITR 19 does not run counter to the Calcutta Discount Co. Ltd. case [1961] 41 ITR 191 (SC) but it merely provides for challenge to the reassessment notice in two stages, that is, (i) raising preliminary objections before the Assessing Officer and in case of failure before the Assessing Officer; (ii) challenging the speaking order of the Assessing Officer under section 148 of the Act." 6.2 Hon'ble Gujrat High Court in the case of Arvind Mills Ltd. vs. ACWT [2004] 270 ITR 469 (Guj) while following the aforesaid decision concluded that once the Supreme Court stated that the AO was bound to dispose of the objections by passing a speaking order, it was not open to the authorities to contend that in the absence of any provision in the Act, the authorities could not have passed a speaking order. Hon'ble Delhi High Court in the case of Delhi Tourism & Transport Development Corporation Ltd. vs. ACIT [2004] 141 Taxman 361 (Delhi), while relying upon the aforesaid decision of the Hon'ble Apex Court in GKN Drivesharfts (India) Ltd.(supra) directed to follow the pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is no dispute that the notice was served on the assessee. There is also no dispute that the reasons recorded by the AO were supplied to the assessee on 9.9.2009. These reasons, indisputably, were the same as were recorded by the AO. After a notice for reassessment has been issued, an assessee is required to file the return and seek reasons for issuance of such notice. The AO is then bound to supply the reasons within a reasonable time. On receipt of reasons, the assessee is entitled to file preliminary objections to issuance of notice and the AO is under a mandate to dispose of such preliminary objections by passing a speaking order, before proceeding with the assessment in respect of the assessment year for which such notice has been issued. 7. In view of above settled legal position, we consider it fair and appropriate to vacate the findings of the ld. CIT(A) as also set aside the reassessment order and remit the matter to the file of the AO with the directions to follow the procedure laid down by the Hon'ble Apex Court reiterated by the Hon'ble jurisdictional High Court. The AO shall dispose of the preliminary objections by passing a speaking order and only thereafter proceed ....