Suresh Chandra vs. ITO (ITAT Delhi)

DATE: March 13, 2015 (Date of pronouncement)
DATE: March 31, 2015 (Date of publication)
AY: 1997-98
FILE: Click here to download the file in pdf format
S. 147/ 148: Failure to comply with the procedure prescribed in G.K.N. Drive Shaft (India) Ltd. vs. ITO 259 ITR 19 (SC) renders the assessment order invalid & void ab initio

In the first round of the appeal, the ITAT set aside the matter to the file of the AO with the direction to dispose of the objections raised by the assessee to the jurisdiction of the AO for issuance of notice u/s. 148 of the Act first by passing a speaking order in view of the decision of the Hon’ble Supreme Court in G.K.N. Drive Shaft (India) Ltd. vs. ITO 259 ITR 19 (SC). However, though the assessee raised objection on the issue of jurisdiction for issuance of notice u/s 148 of the Act, the AO while disposing of the said objection also proceeded to pass the reassessment order instead of restricting itself for the disposal of the objection passing a separate order. On appeal by the assessee to the Tribunal HELD:

The ratio of G.K.N. Drive Shaft (India) Ltd. vs. ITO 259 ITR 19 (SC) and General Motors India Pvt. Ltd vs. DCIT 353 ITR 244 (Guj) is that the Assessing Officer is mandated to decide the objection to the notice u/s 148 of the Act and supply or communicate it to the assessee. Thereafter, the assessee gets an opportunity to challenge the order in a writ petition. Thereafter, the AO may pass the reassessment order. It is not open to the AO to decide the objection raised against notice u/s 148 by a composite assessment order. Thus, the Assessing Officer was required to first decide the objection of the assessee filed u/s 148 and serve a copy of the order on assessee. And after giving some reasonable time to the assessee for challenging his order, it is open to him to pass an assessment order. Since such compliance has not been made by the Assessing Officer in the present case, we hold the impugned assessment order as not valid and the same is held as void ab initio.

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