The AO without making any order disposing of the objections filed by the Appellants, proceeded to make an assessment order dated 26th March, 2004. Tribunal affirmed the order of the AO. High Court admitted the following substantial question of law. “Whether on the facts and in the circumstances of the case, the Income-Tax Appellate Tribunal ought to have held that since the respondent did not furnish to the appellant the reasons recorded for reopening of the assessment for the assessment year 1997-98 and did not comply with the mandatory preconditions laid down by the Hon’ble Supreme Court in GKN Driveshaft (India ) Ltd v. ITO  (2003)  259 ITR  page 19, the reassessment order was bad in law as being opposed to the principles of natural justice?“
Allowing the appeal the Court held that, it is mandatory for the AO to follow the procedure laid down in GKN Driveshafts  (India Ltd. v ITO (2003) 259 ITR 19 (SC) and to pass a separate order to deal with the objections. The disposal of the objections in the assessment order is not sufficient compliance with the procedure. The failure to follow the procedure renders the assumption of jurisdiction by the Assessing Officer ultra vires (Bayer Material Science (P) Ltd v Dy. CIT (2010)382 ITR 333 (Bom)  (HC)  & KSS Petron Pvt Ltd v ACIT  (Bom)(HC) ( ITXA No. 224 of 2014  dt 20 -03 -2017 www.itatonline.org    followed). (ITA No.63 of  2007, dt. 30.08.2019) (AY.1997 -98)