AI Insights
The case involves a series of appeals by M/s Soham Estates against the reassessment orders for three consecutive assessment years. The primary legal issue was the validity of the reassessment orders passed by the Assessing Officer under Section 143(3) read with Section 147 of the Income Tax Act, 1961, without first disposing of the assessee's objections to the reopening of the assessment through a separate speaking order. The Tribunal examined whether the procedure followed by the Assessing Officer complied with the judicial precedents set by the Supreme Court and the Bombay High Court regarding the disposal of objections to reassessment.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 113504 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
6 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-09-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
G
Next Hearing Date
03-09-2023
Assessment Year
2012-2013
Appeal Filed On
08-03-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL "G" BENCH, MUMBAI SHRI B.R. BASKARAN, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 690/MUM/2023 (Assessment Year: 2012-13) ITA No. 691/MUM/2023 (Assessment Year: 2013-14) & ITA No. 692/MUM/2023 (Assessment Year: 2014-15) M/s Soham Estates, 7 th Floor, Sun Plaza, Hariom Nagar, Off Easter Express Highway, Mulund (East), Mumbai - 400081 [PAN: ABKFS1710J] Deputy Commissioner of Income Tax Circle-3, Thane Room No. 10, A Wing, 6 th Floor, Ashar IT Park, Road No. 16Z, Wagle Indl. Estate, Thane - 400064 ............. Vs ............. Appellant Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Dr. K. Shivaram, Sh. Shashi Bekal Dr. Kishor Dhule Date Conclusion of hearing Pronouncement of order : : 04.09.2023 20.09.2023 O R D E R Per Bench: 1. This is a batch of three appeals filed by the Appellant pertaining to Assessment Years 2012-13, 2013-14 and 2014-15 which were heard together as the same involved identical issues and are, ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 2 therefore, being disposed off by way of a common order. ITA No. 690/MUM/2023 (Assessment Year: 2012-13) 2. We would first take up appeal for the Assessment Year 2012-13. 3. By way of the present appeal the Appellant has challenged the order, dated, dated 10/01/2023, passed by the Ld. Commissioner of Income Tax (Appeals), Pune – 11, (hereinafter referred to as ‘the CIT(A) for the Assessment Year 2012-13, whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 25/12/2019, passed under Section 143(3) read with Section 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 ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 3 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) which was passed without disposing of the objections raised by the assessee against the reasons recorded for issuance of Notice under section 148 of the Act by passing a separate speaking order. Hence the order is bad in law.” 6. Since the above ground goes to the root of the matter it is taken up first for consideration. The facts relevant for adjudication of Additional Ground No. 1.1, which goes to the root of the matter, are as follows: 6.1. The Appellant is a partnership firm undertaking business as builder and developer. A survey under Section 133A of the Act was carried out on the business premises of the Appellant on 05/10/2018. During the survey proceedings, it was discovered that two retiring partners of the Appellant, which were shell companies run by Kolkata based accommodation entry operators, had introduced capital aggregating to INR 43.92 Crores from Assessment Year 2012-13 to 2017-18. In view of the aforesaid, reassessment proceedings were initiated for the Assessment Year 2012-13. In response to notice dated 26/11/2018, issued under Section 148 of the Act, the Appellant filed return of income on 24/12/2018. Thereafter, on receiving reasons recorded reopening of assessment, the Appellant filed objections before the Assessing Officer on 09/12/2019. The Assessing Officer passed the reassessment order under Section 143(3) read with Section 147 of the Act on ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 4 25/12/2019 making an addition of INR 13.40 Crores under Section 68 of the Act. 6.2. Being aggrieved, the Appellant filed appeal before the CIT(A) vide submissions dated 25/02/2022 it was, inter alia, contended by the Appellant that reassessment order passed by the Assessing Officer is without jurisdiction for the reasons that the Assessing Officer has ignored the mandatory requirement of disposing of objections raised by the Appellant for reopening assessment under Section 147 of the Act before passing the Assessment Order. The CIT(A) did not find merit in the aforesaid contention raised by the Appellant and dismissed the appeal preferred by the Appellant vide order, dated 10/01/2023. 6.3. The Appellant is now before us in appeal against the order passed by the CIT(A) and had challenged the jurisdiction of the Assessing Officer to pass reassessment order dated 25/12/2019 under Section 143(3) read with Section 147 of the Act. 7. The Ld. Senior Counsel appearing on behalf of the Appellant, 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) ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 5 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 failed to dispose of the objections to reopening of assessment raised by the Appellant. Referring to paragraph 10 of the reassessment order dated 25/12/2019, the Ld. Departmental Representative submitted that the Assessing Officer had disposed of the objections to reopening of assessment raised by the Appellant before passing the reassessment order, dated 25/12/2019. He submitted that there was no requirement that the Assessing Officer should pass an order, separate from the reassessment order, for disposing of the objections to the reopening of assessment raised by the Appellant. 9. In rejoinder, the Ld. Senior Counsel appearing for the Appellant placed reliance upon the judgment of Hon’ble Bombay High Court in the case of Fomento Resorts & Hotels Ltd. Vs. Assistant ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 6 Commissioner of Income, Central Circle, Panjim, Goa : Tax Appeal No. 63 of 2007, dated 30/08/2019 and submitted that identical submissions made by the Revenue were rejected by the Hon’ble Bombay High Court by, inter alia, placing reliance on the earlier judgment of the Hon’ble Bombay High Court in the case of KSS Petron Pvt. Ltd. (supra). 10. We have heard the rival submissions, perused the material on record and examined the position in law. 10.1. In the case of GKN Driveshafts (India) Ltd. (supra), notice under Section 148 of the Act read with Section 143(2) of the Act was issued by the assessing officer calling upon the assessee in that case to give details in connection with the return of income. In a writ petition filed by the assessee, the Hon’ble Delhi High Court took the view that the petition was premature. Being aggrieved, the assessee filed special leave petition before the Hon’ble Supreme Court. Though the Hon’ble Supreme Court declined to interfere with the order passed by the Hon’ble Delhi High Court, the Hon’ble Supreme Court, clarified as under: “We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In 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) ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 7 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 with the assessment’ must be construed to be passing a ‘separate’ speaking order. 10.4. The contention of the Revenue is that even if the objections raised by the assessee are dealt with and disposed off in the reassessment order, the same would amount to sufficient compliance of the judgment of the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra) whereas the contention of the Appellant is that disposing of the objections filed by way of a separate speaking order before passing the reassessment order is necessary before continuing the assessment proceedings. 10.5. In this regard, reliance was placed on behalf of the Appellant on the judgment of the Hon’ble Bombay High Court in the case of KSS Petron Private Limited (supra) wherein following substantial ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 8 question of law was admitted and answered in favour of the assessee: “Whether on the facts and circumstances of the case and in law, the Tribunal was justified in restoring the issue to the Assessing Officer after having quashed/set aside the order dated 14 th December, 2009 passed by the Assessing Officer without having disposed of the objections filed by the appellant to the reasons recorded in support f the reopening Notice dated 28th March, 2008.?” 10.6. In the above case the Assessing Officer, without disposing of the objections of the Appellant, completed the assessment under Section 143(3) read with Section 147 of the Act. The issue travelled to the Tribunal. The Tribunal held that the Assessing Officer was bound to follow the procedure laid down by the Hon’ble Supreme Court in the case of GKN Driveshaft (India) Private Limited (supra). Since, the Assessing Officer had not disposed off the objections, the reassessment order was set aside and the Assessing Officer was directed to pass fresh assessment order after disposing off the objections. In appeal preferred by the Appellant, the Hon’ble Bombay High Court answered the substantial question of law in favour of the Appellant holding that in the facts of that case the Tribunal was not correct in restoring the issue back to the file of Assessing Officer for passing the fresh assessment. The relevant extract of the aforesaid judgment reads as under: “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. However, after having set aside the orders, it restored the Assessment to the Assessing Officer to ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 9 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 unnecessary harassment of the Assessee by reviving stale/ old matters. 9 In fact, to ensure that re-opening 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 re-opening 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 19 September, 2006. In the affidavit, it is stated that consequent to the impugned order of the Tribunal dated 14 August, 2013, the Assessing Officer has not passed any order of re-assessment. Time was granted on the last occasion to enable the Respondent to respond to the affidavit dated 19th September, 2006 of the Director of the Appellant-Company. The Respondent is unable to dispute the facts stated in the affidavit dated 19th September, 2016 filed by the Director of the Appellant-Company. The time to pass a order on the notice dated 28th March, 2008, even consequent to the impugned order of the Tribunal, has lapsed. ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 10 11 Therefore, on the above facts and law, the substantial question of law is answered in the negative i.e. in favour of the Appellant- Assessee and against the Respondent-Revenue.” (Emphasis Supplied) 10.7. In the case of Bayer Material Sciences Private Limited (supra), the Hon’ble Bombay High Court allowed the writ petition filed by the assessee holding that draft assessment order passed without disposing off the objections to reopening of assessment filed by the assessee was not sustainable and without jurisdiction. The relevant extract of the aforesaid judgment reads as under: “11. In the present facts, we find that the draft Assessment order was passed on 30th March, 2015 without having disposed of the Petitioner's objections to the reasons recorded in support of the impugned notice. The reasons were supplied to the Petitioner only on 19th March, 2015 and the Petitioner had filed the objections 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 sub- section(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 ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 11 objections to reopening of the assessment filed by the assessee before proceedings with the reassessment proceedings. While arriving at the said conclusion, the Hon’ble Bombay High Court had, placing reliance of the above two judgments, held as under: “18. The moot question is, therefore, the disposal of the objections by the Assessing Officer in his assessment order dated 26th March, 2004 constitutes sufficient compliance with the procedure prescribed by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) 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 could, at all, exercise the jurisdiction and enter upon an inquiry on the reopening notice before disposing of the objections on the reasons furnished to the Assessee. This Court held that the proceedings initiated by the Transfer Pricing Officer (TPO), on the basis of such a draft assessment order, were without jurisdiction and quashed the same. 21. Similarly, in the case of KSS Petron Private Ltd. (supra), this Court was concerned with the following substantial question of law: ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 12 "Whether on the facts and circumstances of the case and in law, the Tribunal was justified in restoring the issue to the Assessing Officer after having quashed/set aside the order dated 14th December, 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. 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 reopening notice dated 28th 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 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." ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 13 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 vires Section 11 of the said Act. The first substantial question of law will, accordingly, have to be answered in favour of the Appellant and against the Respondent-Revenue. 26. As noted earlier, in view of the aforesaid, there is no necessity to advert to the second substantial question of law, at least, in so far as this Appeal is concerned. The Appeal is, therefore, allowed and the impugned orders dated 26th March, 2004 made by the Assessing Officer, 30th November, 2004 made by the Commissioner (Appeals) and 12th January, 2007 made by the ITAT are set aside on the ground of want of compliance with jurisdictional parameters by the Assessing Officer, and without going into the second substantial question of law framed in this Appeal. Accordingly, we clarify 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. ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 14 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 position taken by the Revenue so that the same could meet the test of judicial scrutiny in a subsequent challenge to initiation of reassessment proceedings on the ground of lack of jurisdiction. When considered from this perspective, the disposal of the objections in the reassessment order (as opposed to disposal by way of a separate speaking order) takes away the option from the assessee to challenge initiation of reassessment proceedings by invoking writ jurisdiction before the court till passing of the reassessment order, thus, putting an assessee through the rigour of reassessment even though on subsequent judicial scrutiny it may ultimately turn out that the assumption of jurisdiction for reopening the assessment was bad in law. Therefore, in absence of any justifiable reasons, the Assessing Officer is obliged to dispose of the objections by way of separate speaking order. However, in a case where the assessee does not file the return of income in response to notice issued under Section 148 of the Act and/or delays filing of the objections to reopening of assessment even after receiving the reasons recorded with the object of delaying or frustrating the re- assessment proceedings, in our view, the benefit of above judgments cannot be extended to such assessee. ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 15 10.11. We note that in the present case the Appellant has acted in accordance with the judgment of the Hon’ble Supreme Court in the case of GKN Driveshaft (India) Limited (supra). In response to notice, dated 26/11/2018, issued under Section 148 of the Act, return of income was filed by the Appellant on 24/12/2018, which was followed by a request for providing reasons recorded. On receiving the reasons recorded on 07/11/2019, the objections to reopening of assessment were filed on 09/12/2019. The Assessing Officer did not dispose of the objections by way of a separate speaking order and passed the reassessment order under Section 143(3) read with Section 147 of the Act on 25/12/2019 and in paragraph 10 therein the Assessing Officer rejected the objections to reasons recorded filed by the Appellant. While in paragraph 10 of the reassessment order, dated 25/12/2019, the Assessing Officer has dealt with the objections filed by the Assessing Officer, the same does not meet the mandate laid down by the Hon’ble Supreme Court in the case of GKN Driveshaft (India) Limited (supra) in the facts and circumstances 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 ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 16 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 05/11/2019 Date of Filing of Objections 09/12/2019 09/12/2019 09/12/2019 Date of Passing of reassessment order under Section 143(3) read with Section 147 of the Act 25/12/2019 27/12/2019 27/12/2019 12.1. Accordingly, adopting the reasoning given in paragraph 10 to 10.11 above while adjudicating Additional Ground No. 1.1 raised in appeal for the Assessment Year 2012-13 the reassessment order, dated 27/12/2019, passed under Section 143(3) read with Section 147 of the Act for the Assessment Year 2013-14 is quashed as having been passed without jurisdiction. Additional Ground No. 1.1 raised by the Appellant in appeal for the Assessment Year 2013-14 is, therefore, allowed. All the other grounds raised by the Appellant in appeal for the Assessment Year 2013-14 are dismissed as being infructuous. 12.2. Similarly, adopting the reasoning given in paragraph 10 to 10.11 above while adjudicating Additional Ground No. 1.1 raised in appeal for the Assessment Year 2012-13 the reassessment order, dated ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 17 27/12/2019, passed under Section 143(3) read with Section 147 of the Act for the Assessment Year 2014-15 is quashed as having been passed without jurisdiction. Additional Ground No. 1.1 raised by the Appellant in appeal for Assessment Year 2014-15 is, therefore, allowed. All the other grounds raised by the Appellant in appeal for the Assessment Year 2014-15 are dismissed as being infructuous. 13. In result, all the three appeals preferred by the Assessee are allowed. Order pronounced on 20.09.2023 Sd/- Sd/- (B.R. Baskaran) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated : 20.09.2023 Alindra, PS ITA No.690//Mum/2023 (Assessment Year 2012-13) ITA No.691/Mum/2023 (Assessment Year: 2013-14) ITA No.692/Mum/2023 (Assessment Year: 2014-15) 18 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त/ The CIT 4. प्रध न आयकर आय क्त / Pr.CIT 5. दिभ गीय प्रदिदनदध, आयकर अपीलीय अदधकरण, म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदधकरण, म ुंबई / ITAT, Mumbai
Other Referred Cases
National Thermal Power Co. Ltd. vs. CIT: 229 ITR 383, GKN Driveshafts (India) Ltd. vs. ITO (2003) 259 ITR 19 (SC), KSS Petron Pvt. Ltd. vs. ACIT (ITA No. 224 of 2014 dated 03/10/2016 (Bom) (HC), Bayer Material Sciences Private Limited vs. Deputy Commission of Income Tax 10(3) : [2016] 382 ITR 333 (Bombay), Fomento Resorts & Hotels Ltd. vs. Assistant Commissioner of Income, Central Circle, Panjim, Goa : Tax Appeal No. 63 of 2007, dated 30/08/2019, CIT vs. Anurag Rice Mills (2017) 88 taxmann.com 420 (Patna) (HC), General Electric Company vs. ADIT: ITA No. 82/Mum/2011, 23/12/2022
Laws Referred To
Income Tax Act, 1961
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