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Reassessment and GKN Driveshaft

Started by JB, March 19, 2012, 07:19:32 PM

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Dear All,

One of the issue which has been recently reaised by department is that after GKN driveshaft judgment, if the assesee does not file objection before the A.O., he can not challange reassessment before CIT(A). This appears to be incorrect. The assessee has right to challange the reassessment u/s 246A. Even otherwise, the issue of jurisdiction can be challanged at any stage. I request you all to kindly give your views in the matter with supporting judgments. It will be really helpful if any direct judgment on the suvject is found. thanks and regards to all.

ashutosh majumdar

I take it that the assessee filed a ROI and complied with the s. 143(2) notices without any protest. There are judgements that an additional ground challenging the reopening can be raised at any time. Also, in NTPC 229 ITR ?, the assessee had offered the income to tax and then raised a dispute before the Tribunal. The SC held that the duty was to assess as per the law and there could be no estoppel.

Applying this principle, GKN does not suggest that the non-filing of objections is an acquiescence to the reopening.

The judgements on additional ground to challenge the reopening will be on the point. Can't recollect off-hand. Let me know if you can't find them. 


Yes sir. that is cent percent correct. This position is clear from the case of P. V. Doshi since 113 ITR. the GKN driveshaft was rendered in the context of writ petition under article 226. However, if the assessee does not want to file writ and want to challange the reassessment in appeal proceedings, there should not be any bar. Howver, i need support of any tribunal decision or high court judgment in the matter. Kindly give me citation, if you find any application decision. Thanks in advance sir.


Can we say that if the notice of 147 did not accompany reasons recorded by AO athe reassessment itself is invalid. cannot you take that ground at any stage before Ao as well as CIT (A)/ ITAT there are some ITAT decisions on this line.

Shipra walia

Yes, the understanding is correct that if the notice is not accompanied with the reasons within the specified time frame (i.e. 4 or 6 years) then in such case the reassessment proceedings can be termed as invalid.

In this regard a reference can be made to GKN driveshaft 259 ITR 19 where in the apex court has referred a set procedure to be followed. Further the Delhi High court in Haryana Acrylic (2009) 308 ITR 38 has firmly held that where the reasons were not supplied with in 4 years ( time period as per the facts of the case) the reassessment was invalid.  The same view has been followed by the Delhi ITAT in a recent judgment of Sri Balwant Rai Wadhwa ITA No.4806/Del/2010.

Hope this clarifies you.