AI Drafter 
TaxTMI 
TaxTMI 
2017 (10) TMI 1598
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....t by issuing a Notice under Section 148 on 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 m....
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.... this issue found that it was proper to set aside the assessment order with 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 ....
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....rder of the Assessing Officer deciding the objections if the assessee chooses 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....
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....tice under section 148 has been considerably softened by the apex court in GKN Driveshafts (India) Ltd.'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 rel....
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....ure mandated. 6.5 The position in law is thus well settled. In the instant case, the reasons were recorded before issuance of notice u/s 148 of the Act on 27.3.2009. There 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 dow....
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....w, after providing due and reasonable opportunity of being heard to the assessee. Since we have remanded the case to the file of AO, we do not consider it fit and appropriate to go into the other grounds raised by the assessee on merits of the case." 6. Having regard to the peculiar facts and circumstances of this case that the assessee filed the objection against the Notice under Section 148 only on 28.3.2013 and the Assessing Officer was left with no option but to finalise the assessment before the expiry of limitation for completing the assessment on 31.3.2013. Therefore the Assessing Officer has completed the assessment vide order dt.28.3.2013 whereby the objections of the assessee were also disposed off. Accordingly, we find that decisions relied upon by the ld. DR on this point are applicable in the facts of the present case and therefrom, we set aside the impugned order of the CIT (Appeals) as well as the assessment order and remit the matter to the record of the Assessing Officer for deciding the objections of the assessee by a separate speaking order and in case the objections of the assessee are rejected then after allowing the assessee a period of four weeks the Asses....