TaxTMI 
TaxTMI 
2023 (9) TMI 1696
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.... 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). 4. The Ld. Senior Counsel for the Appellant appearing before us, at the outset, invited our attention to the Additional Grounds No. 1.1 challenging the assumption of jurisdiction by the Assessing Officer under Section 148 of the Act raised vide letter, dated 12/06/2023, and submitted that the same be admitted and taken up for adjudication first as it goes to the root of the matter. On the other hand, the Ld. Departmental Representative opposed the admission of Additional Ground. 5. Having heard both the sides on admission of Additional Ground No. 1.1., we are of the view that Additional Ground No. 1.1 raised by the Appellant is a legal ground which can be adjudicated on the basis of material on record without inquiring into new facts. Thus, in view of the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT: 229 ITR 383, we admit the Additional Ground No. 1.1 raised by the Appellant which read as under: "1. Reassessment is bad in law 1.1. The Ld. Commissioner of Income-tax (Appeals) (CIT(A)) erred in upholding the reassessment order of the Ld. Assessing Officer (AO....
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...., advancing arguments on Additional Ground No. 1.1 above, submitted that the Assessing Officer had failed to dispose of the objections to reopening of assessment filed by the Appellant before passing the reassessment order, dated 25/12/2019, passed under Section 143(3) read with Section 147 of the Act, and therefore, the assumption of jurisdiction by the Assessing Officer under Section 147/148 of the Act is bad in law. In this regard, the Ld. Senior Counsel placing reliance on the following judgments: 1. GKN Driveshafts (India) Ltd. Vs. ITO (2003) 259 ITR 19 (SC) 2. KSS Petron Pvt. Ltd. Vs. ACIT (ITA No. 224 of 2014 dated 03/10/2016 (Bom) (HC) 3. Bayer Material Sciences Private Limited Vs. Deputy Commission of Income Tax 10(3) : [2016] 382 ITR 333 (Bombay), 4. Fomento Resorts & Hotels Ltd. Vs. Assistant Commissioner of Income, Central Circle, Panjim, Goa : Tax Appeal No. 63 of 2007, dated 30/08/2019 5. CIT Vs. Anurag Rice Mills (2017) 88 taxmann.com 420 (Patna) (HC) 6. General Electric Company Vs. ADIT: ITA No. 82/Mum/2011, 23/12/2022 8. Per contra, the Ld. Departmental Representative submitted that in the present case it cannot be said that the Assessing Officer had f....
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....the instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years." (Emphasis Supplied) 10.2. Thus, the Hon'ble Supreme Court, laid down the following procedure to be adopted in case of reopening of assessment under Section 147 of the Act: (a) "On receipt of notice issued under Section 148 of the Act, the noticee/assessee must file return of income and seek reasons recorded for reopening assessment from the assessing officer; (b) In case the noticee/assessee seeks the reasons recorded as stated in (a) above, the assessing officer must furnish reasons within reasonable time. (c) On receipt of reasons from the assessing officer, the notice/assessee can file objections to reopening of assessment (d) the objections raised by the notice/assessee must be disposed off by the Assessing Officer by passing a speaking order before proceedings with the assessment." 10.3. Issue that arises for consideration in the facts of the present case is whether 'passing a speaking order, before proceeding ....
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.... having first disposed of the objections of the appellant. This impugned order holds the Assessing Officer is obliged to do in terms of the Apex Court's decision in GKN Driveshafts (India) Ltd., v/s. ITO 259 ITR 19. In the aforesaid circumstances, the order of the CIT(A) and the Assessing Officer were quashed and set aside. However, after having set aside the orders, it restored the Assessment to the Assessing Officer to pass fresh order after disposing of the objections to re-opening notice dated 28 March, 2008, in accordance with law. 8 We note that once the impugned order finds the Assessment Order is without jurisdiction as the law laid down by the Apex Court in GKN Driveshafts (supra) has not been followed, then there is no reason to restore the issue to the Assessing Officer to pass a further/fresh order. If this is permitted, it would give a licence to the Assessing Officer to pass orders on re-opening 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 un....
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....ons to the same on 25th March, 2015. This passing of the draft Assessment order without having disposed of the objections is in defiance of the Supreme Court's decision in GKN Driveshafts (India) Ltd. (supra). Thus, the draft Assessment order dated 30th March, 2015 is not sustainable being without jurisdiction. This for the reason that it has been passed without disposing of the objections filed by the Petitioner to the reasons recorded in support of their impugned notice. Accordingly, we set aside the draft Assessment order dated 30th March, 2015. We are not dealing the validity of the reasons in support of the impugned notice in the present facts as the time limit to pass the Assessment order as provided under 4th Proviso to subsection(2) of Section 153 of the Act has already expired when the petition was filed." (Emphasis Supplied) 10.8. In the case of Fomento Resorts & Hotels Ltd. (supra), the Hon'ble Bombay High Court, while dealing with the issue of reopening of assessment under Section 11 of the Expenditure Tax Act, 1987, held that assumption of jurisdiction by the Assessing Officer was bad in law as the assessing officer had failed to dispose of the objections to reo....
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....2009 passed by the Assessing Officer without having disposed of the objections filed by the appellant to the reasons recorded in support of the re- opening Notice dated 28th March, 2008?" 22. In the aforesaid case, the Assessing Officer had purported to dispose of the objections to the reasons in the assessment order, consequent upon reopening of the assessment. This Court, however, held that the proceedings for reopening of assessment prior to disposing of the Asessee's objections by passing a speaking order, was an exercise in excess of jurisdiction. 23. KSS Petron Private Ltd. (supra), this is what the Division Bench has observed at paragraphs 7 and 8 of the Judgment: "7. On further Appeal, the Tribunal passed the impugned order. By the impugned order it held that the Assessing Officer was not justified in finalizing the Assessment, without having first disposed of the objections of the appellant. This impugned order holds the Assessing Officer is obliged to do in terms of the Apex Court's decision in GKN Driveshafts (India) Ltd., v/s. ITO 259 ITR 19. In the aforesaid circumstances, the order of the CIT(A) and the Assessing Officer were quashed and set aside. Howev....
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....ify that the second substantial question of law, raised in this Appeal, is not to be treated as decided in this Appeal, one way or the other. 27. The Appeal is allowed in the aforesaid terms. There shall be no order as to costs". (Emphasis Supplied) 10.9. Thus, in view of the above judgments of the Hon'ble Bombay High Court, it can be concluded that the assessing officer is under obligation to dispose of the objections to reopening the assessment filed by the assessee by way of a separate speaking order before passing the reassessment order provided the assessee acts in accordance with the judgment of the Hon'ble Supreme Court in the case of GKN Driveshaft (India) Limited. 10.10. In our view, the procedure laid down by the Hon'ble Supreme Court in the case of GKN Driveshaft (India) Limited granted opportunity to an assessee to access and understand the reasons for reopening of his assessment and to file objections against the same. At the same time, the Revenue was granted opportunity to examine the set up by the assessee after taking into consideration the objections/reply filed by the assessee and pass a speaking order disposing off objections clearly stating therein the po....
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....es of the present case. Therefore, in view of the above judgments of the jurisdictional High Court, the reassessment order, dated 25/12/2019, passed under Section 143(3) read with Section 147 of the Act is quashed as having been passed without jurisdiction. Additional Ground No. 1.1 raised by the Appellant is, therefore, allowed while all the other grounds raised by the Appellant are dismissed as being infructuous. ITA No. 691/Mum/2023 (Assessment Year 2013-14) ITA No. 692/Mum/2023 (Assessment Year 2014-15) 11. During the course of hearing, both the sides had agreed that our findings/adjudication in respect of Additional Ground No. 1.1 raised in appeal for the Assessment Year 2012-13 would apply mutatis mutandis to corresponding Additional Ground No. 1.1 raised in appeals for the Assessment Year 2013-14 and 2014-15. 12. We note that in identical facts and circumstances reassessment order was passed for the Assessment Year 2013-14 and 2014-15 without first disposing of the objections to reopening of assessment filed by the Appellant. The relevant dates are tabulated as under: Particulars AY 2012-13 AY 2013-14 AY 2014-15 Date of providing reasons 07/11/2019 07/11/2019 ....