CABLE CORPORATION OF INDIA LTD.,MUMBAI vs. CIT (A)-48, MUMBAI

आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM:

This appeal filed by the assessee is directed against the order dated 02.12.2025 passed by the learned Commissioner of Income Tax (Appeals)-48, Mumbai [hereinafter referred to as "the

2 ITA No. 714/Mum/2026 Cable Corporation of India Limited CIT(A)"], under section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"], for the assessment year 2015-16. The impugned order of the learned CIT(A) arises from the reassessment order dated 30.03.2022 passed by the National Faceless Assessment Centre, Delhi[hereinafter referred to as "Assessing Officer"], under section 143(3) read with sections 147 and 144B of the Act. 2. The relevant facts, in brief, are that the assessee is a company and filed its original return of income for the assessment year under consideration on 29.09.2015, declaring a loss of Rs.16,52,64,791/-. The original assessment was completed under section 143(3) of the Act vide order dated 27.12.2017. 3. Subsequently, the Assessing Officer noticed from Form No. 26AS that rental receipts of Rs.1,05,83,871/- from Carat Media Services Pvt. Ltd./Dentsu Marketing Solutions Private Limited were reflected therein, whereas the assessee had offered rental income of Rs.88,83,871/- from the said party. The Assessing Officer, therefore, formed a prima facie view that rental income to the extent of Rs.17,00,000/- had not been offered to tax. The Assessing Officer further observed that the assessee had sold 12 properties for consideration lower than their respective values adopted by the stamp duty authority and, consequently, a difference of Rs.2,84,12,576/- was liable to be brought to tax by invoking section 43CA of the Act. On the basis of the aforesaid information, the Assessing Officer recorded that income

3 ITA No. 714/Mum/2026 Cable Corporation of India Limited aggregating to Rs. 3,01,12,576/- had escaped assessment and issued notice under section 148 of the Act on 30.03.2021. 4. In response to the notice issued under section 148 of the Act, the assessee filed its return of income on 21.04.2021, declaring total income at nil. Thereafter, notice under section 143(2) of the Act was issued on 19.12.2021 and notice under section 142(1) of the Act was issued on 30.12.2021. 5. In the course of the reassessment proceedings, as regards the difference in rental income of Rs.17,00,000/-, the assessee submitted that it had let out its property situated at Poonam Chambers to Carat Media Services India Pvt. Ltd. and had received an aggregate amount of Rs.1,06,64,111/- during the previous year 2014-15. According to the assessee, out of the aforesaid amount, Rs.17,00,000/- represented advance rent for April 2015, which pertained to the previous year ending on 31.03.2016 and was accordingly offered to tax in the assessment year 2016-17. The assessee submitted that it followed the mercantile system of accounting and, therefore, rental income was offered to tax in the year to which it pertained. It was further submitted that the corresponding tax deducted at source was also claimed in assessment year 2016-17. 6. The Assessing Officer did not accept the aforesaid explanation. He observed that Form No. 26AS reflected rental income of Rs.1,05,83,871/- and tax deducted at source of Rs.10,58,387/-, whereas the assessee had offered rental income

4 ITA No. 714/Mum/2026 Cable Corporation of India Limited of Rs.88,83,871/-. The Assessing Officer further observed that the assessee had not furnished a segregation of the tax deducted at source claimed by it. He, therefore, treated the difference of Rs.17,00,000/- as rental income under-reported by the assessee and added the same to its total income. 7. As regards the proposed addition under section 43CA of the Act, the assessee contended that CCI Projects Private Limited had entered into the primary agreements with the purchasers of the 12 flats and that the assessee had received only its agreed share of revenue from the sale of such flats. The assessee initially furnished its explanation and, in response to the final show- cause notice dated 25.03.2022 issued along with the draft assessment order, also furnished copies of the allotment letters and agreements relating to all the 12 properties. 8. The Assessing Officer, however, held that the assessee had not substantiated its contention that it had received only a share of revenue from the sale of the flats. He further observed that the assessee was engaged in the real estate business and that the properties had been sold for consideration lower than the values adopted by the stamp duty authority. Accordingly, the Assessing Officer invoked section 43CA of the Act and made an addition of Rs.2,84,12,576/-. Consequently, the reassessment was completed vide order dated 30.03.2022. After making aggregate additions of Rs.3,01,12,576/- to the returned loss of Rs.16,52,64,791/-, the Assessing Officer determined the remaining current-year loss at Rs.13,51,52,215/-. The Assessing

5 ITA No. 714/Mum/2026 Cable Corporation of India Limited Officer also directed the charging of interest under sections 234A, 234B and 234C of the Act and initiated penalty proceedings under section 271(1)(c) of the Act. 9. Aggrieved by the reassessment order, the assessee preferred an appeal before the learned CIT(A). The assessee challenged the validity of the reopening as well as the additions made on account of rental income and under section 43CA of the Act. The assessee also raised an additional ground contending that the Assessing Officer had proceeded with and completed the reassessment without disposing of the objections raised by the assessee against the reopening by a separate speaking order. 10. The learned CIT(A), vide impugned order dated 02.12.2025, rejected the additional ground. He held that the objections raised by the assessee had been considered in the body of the reassessment order and that the failure to issue a separate document titled as a speaking order was merely a procedural irregularity and not a jurisdictional defect rendering the reassessment void. 11. The learned CIT(A) also upheld the validity of the reopening. He held that the assessee had failed to disclose the rental income reflected in Form No. 26AS and the sale of properties below the stamp duty valuation. He further held that the assessee had not demonstrated that these issues were examined in the original assessment proceedings. The learned CIT(A) also observed that, in view of the extension of limitation under the Taxation and

6 ITA No. 714/Mum/2026 Cable Corporation of India Limited Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the notice issued on 30.03.2021 was within the permissible period. 12. On the addition of Rs.17,00,000/- towards rental income, the learned CIT(A) held that the assessee had not produced any rent agreement or other evidence demonstrating that the amount represented advance rent pertaining to assessment year 2016-17. He further held that the credit appearing in Form No. 26AS indicated that the amount had been credited to the assessee during the relevant previous year. The addition of Rs.17,00,000/- was, therefore, confirmed. 13. As regards the addition of Rs.2,84,12,576/- under section 43CA of the Act, the learned CIT(A) held that the assessee, being the landowner and a confirming party, had transferred its rights in the land held as stock-in-trade in exchange for its share of revenue. He accordingly held that the transaction fell within the ambit of section 43CA of the Act. The learned CIT(A) further held that, although the flats had allegedly been allotted or booked in the years preceding 01.04.2014, the sale deeds were registered during the previous year relevant to the assessment year under consideration, when section 43CA was in force. He also held that the assessee had not conclusively demonstrated that the consideration or any part thereof had been received through the prescribed modes on or before the respective dates of allotment. The learned CIT(A), therefore, confirmed the addition made under section 43CA of the Act.

7 ITA No. 714/Mum/2026 Cable Corporation of India Limited 14. In relation to the computation of income, the learned CIT(A) directed the Assessing Officer to verify the set-off of the current- year loss and the earlier years’ losses and to re-compute the income in accordance with law. The grounds relating to the demand and levy of interest were treated as consequential. Accordingly, the appeal of the assessee was partly allowed.

8 ITA No. 714/Mum/2026 Cable Corporation of India Limited valuation and actual consideration received by the appellant, by invoking provisions of section 43CA of the Act. 8. The learned CIT(A) failed to appreciate the fact that the appellant does not undertake any development activity and hence has not entered into any sale transaction but is merely receiving its share of revenue (being a “confirming party” to the agreement), on sale of flat by CCI Projects Private Limited (CCPL). Therefore, provisions of section 43CA of the Act are not applicable to the appellant on sale of apartments/property by CCI Projects Private Limited. 9. Without prejudice to the Ground No. 8 above, the learned CIT(A) failed to appreciate that with respect to all 12 transactions in question, provisions of section 43CA of the Act are not applicable, as the transaction price was agreed prior to the introduction of the provisions of section 43CA of the Act. 10. Without prejudice to the Ground No. 8 & 9 above, the learned CIT(A) failed to appreciate that the stamp duty value as on the date of booking of the property/apartment should be considered rather than the date of registration of the property/apartment. 11. Without prejudice to the Ground No. 8, 9 & 10 above, the learned CIT(A) failed to appreciate that the tolerance limit of 10% provided in the first proviso to section 43CA ought to be applied retrospectively. Your appellant craves leave to add, alter, amend, or delete any of the above grounds of appeal. 16. During the course of hearing before us, at the outset, the learned Authorised Representative (AR) addressed us on Ground No. 2 concerning the failure of the Assessing Officer to dispose of the objections raised by the assessee against the reopening of the assessment. The learned AR invited our attention to the assessee’s reply dated 18.01.2022 filed before the Assessing Officer in response to the notice issued under section 142(1) of the Act. Referring to paragraph 1.3 of the said reply, the learned AR submitted that, after filing the return of income in response to

9 ITA No. 714/Mum/2026 Cable Corporation of India Limited the notice under section 148 of the Act and upon receipt of the reasons recorded for reopening, the assessee had raised detailed objections vide letter dated 09.07.2021. The said objections were uploaded on the Income-tax portal on 16.07.2021 under acknowledgement No.149103841130721.The learned AR further submitted that, despite the aforesaid objections having been filed, the Assessing Officer neither adjudicated upon them nor passed a separate reasoned and speaking order before proceeding further with the reassessment. The learned AR also submitted that the assessee specifically brought this lapse to the notice of the Assessing Officer in paragraph 1.4 of its reply dated 18.01.2022 and had contended that initiation of further assessment proceedings under section 142(1) of the Act, without first disposing of the objections, was void ab initio. 17. The learned AR invited our attention to pages 2 and 3 of the reassessment order. He submitted that the Assessing Officer had merely reproduced the assessee’s explanation relating to the advance rent of Rs.17,00,000/- and thereafter proceeded to make the addition. The Assessing Officer did not deal with the jurisdictional objections raised by the assessee, nor did he record any reasons for rejecting them. According to the learned AR, the discussion contained in the reassessment order related only to the merits of the proposed additions and could not be regarded as adjudication of the objections raised against the assumption of jurisdiction under section 147 of the Act.

10 ITA No. 714/Mum/2026 Cable Corporation of India Limited 18. The learned AR submitted that the procedure prescribed by the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. v. Income Tax Officer and Others [(2003) 259 ITR 19 (SC)] required the Assessing Officer to dispose of the objections raised against reopening by passing a speaking order before proceeding with the reassessment. He also referred to the decision of the Hon’ble jurisdictional High Court in Asian Paints Ltd. v. Deputy Commissioner of Income-tax and Another [(2008) 296 ITR 90 (Bom.)] and submitted that the requirement of passing a speaking order and allowing the prescribed interval before proceeding further had been reiterated by the Hon’ble jurisdictional High Court. 19. The learned AR further invited our attention to paragraph 9.1 of the impugned order, wherein the learned CIT(A) adjudicated the ground relating to non-disposal of the objections raised against reopening. He submitted that the learned CIT(A) erred in holding that the Assessing Officer had duly considered the objections in paragraphs 3 and 4 of the reassessment order and that the reasons for rejecting the assessee’s contentions were embedded in the final order. According to the learned AR, paragraphs 3 and 4 of the reassessment order dealt exclusively with the merits of the additions concerning rental income of Rs.17,00,000/- and the applicability of section 43CA of the Act. Those paragraphs did not deal with, much less adjudicate, the assessee’s objections to the assumption of jurisdiction under section 147 of the Act.

11 ITA No. 714/Mum/2026 Cable Corporation of India Limited 20. The learned AR submitted that the learned CIT(A) further erred in treating the failure to pass a separate speaking order as a mere procedural irregularity and in holding that the assessee had not demonstrated any prejudice. He contended that disposal of the objections by a reasoned and speaking order before proceeding with the reassessment was a mandatory requirement. Such requirement could not be substituted by discussing the proposed additions on merits in the final reassessment order. The fact that the assessee participated in the reassessment proceedings could also not cure the failure of the Assessing Officer to follow the procedure prescribed for disposal of the objections. 21. The learned AR accordingly submitted that the finding recorded by the learned CIT(A) in paragraph 9.1 was contrary to the reassessment order itself as well as the procedure laid down by the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. v. Income Tax Officer and Others [(2003) 259 ITR 19 (SC)]. He, therefore, urged that the finding of the learned CIT(A) be reversed and the reassessment order be quashed for failure to dispose of the objections by a reasoned and speaking order before completion of the reassessment. 22. In support of his contention, the learned AR placed reliance upon the following decisions of the Hon’ble jurisdictional High Court:

12 ITA No. 714/Mum/2026 Cable Corporation of India Limited (i) Bayer Material Science (P.) Ltd. v. Deputy Commissioner of Income-tax-10(3) [(2016) 382 ITR 333 (Bom.)]The learned AR submitted that, in the said decision, the Assessing Officer had passed the draft assessment order without first disposing of the objections raised against the reopening. The Hon’ble jurisdictional High Court held that passing an assessment order without disposal of the objections was in defiance of the procedure laid down by the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. and rendered the assessment order unsustainable for want of jurisdiction.

(ii) KSS Petron Private Ltd. v. Assistant Commissioner of Income Tax, Circle 10(2) [Income Tax Appeal No. 224 of 2014, judgment dated 03.10.2016]The learned AR submitted that the Hon’ble jurisdictional High Court held that where an assessment order was passed without first disposing of the assessee’s objections, the assessment was without jurisdiction. The Hon’ble High Court further held that such an assessment could not be restored to the Assessing Officer for passing a fresh order after following the prescribed procedure.

(iii) Fomento Resorts & Hotels Ltd. v. Assistant Commissioner of Income-tax [Tax Appeal No. 63 of 2007, judgment dated 30.08.2019]The learned AR submitted that this decision directly dealt with the contention that consideration or purported disposal of the objections in the final assessment order itself constituted sufficient compliance with the procedure prescribed in GKN Driveshafts (India) Ltd. The Hon’ble jurisdictional High Court rejected the said contention and held that the Assessing Officer was required first to dispose of the objections by a speaking order and only thereafter could proceed with the reassessment.

13 ITA No. 714/Mum/2026 Cable Corporation of India Limited (iv) Kesar Terminals & Infrastructure Ltd. v. Deputy Commissioner of Income-tax [(2025) 171 taxmann.com 800 (Bom.)]The learned AR submitted that this later decision of the Hon’ble jurisdictional High Court was rendered on substantially similar facts. In that case also, notice under section 148 of the Act was issued on 30.03.2021; the assessee filed objections to reopening; the Assessing Officer proceeded to issue notice under section 142(1) without disposing of the objections; and ultimately passed a consolidated reassessment order purportedly dealing with both the objections and the assessment. 23. On the strength of the aforesaid decisions, the learned AR submitted that the law laid down by the Hon’ble jurisdictional High Court was clear that the Assessing Officer was required to dispose of the assessee’s objections by a separate reasoned and speaking order before proceeding further with the reassessment. The learned AR, therefore, submitted that the conclusion of the learned CIT(A) in paragraph 9.1 of the impugned order, treating the failure as a procedural irregularity and relying upon the assessee’s participation and absence of demonstrated prejudice, was directly contrary to the aforesaid binding decisions. He accordingly urged that the reassessment order be quashed and that the matter should not be restored to the Assessing Officer for curing the jurisdictional defect.

14 ITA No. 714/Mum/2026 Cable Corporation of India Limited separate speaking order was a procedural irregularity and did not render the reassessment order void ab initio. According to the learned DR, the learned CIT(A) had correctly held in paragraph 9.1 of the impugned order that the objections and the assessee’s contentions had been considered by the Assessing Officer while completing the reassessment. He further submitted that the assessee had participated in the reassessment proceedings and had failed to demonstrate any prejudice caused by the absence of a separate order disposing of the objections.In support of the aforesaid contentions, the learned DR placed reliance upon the decision of the Hon’ble Madras High Court in Home Finders Housing Ltd. v. Income-tax Officer, Corporate Ward 2(3), Chennai [(2018) 404 ITR 611 (Mad.); (2018) 93 taxmann.com 371 (Mad.)]. The learned DR submitted that the Hon’ble Madras High Court had considered the procedure laid down by the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. and held that non-compliance with the said procedure did not make the reassessment order void or non est. It was held to be a procedural irregularity capable of being cured by remitting the matter to the Assessing Officer.The learned DR further submitted that the decision of the Hon’ble Madras High Court in Home Finders Housing Ltd. was carried before the Hon’ble Supreme Court in Special Leave to Appeal (Civil) No.12721 of 2018. The Hon’ble Supreme Court, vide order dated 18.05.2018 reported as Home Finders Housing Ltd. v. Income-tax Officer, Corporate Ward 2(3) [(2018) 256 Taxman 59 (SC); (2018) 94 taxmann.com 84 (SC)], dismissed the special leave petition.

15 ITA No. 714/Mum/2026 Cable Corporation of India Limited 25. We have considered the rival submissions and perused the material placed on record. We have also carefully considered the decisions relied upon by both sides. Ground No. 2 raises the question whether the reassessment completed without first disposing of the objections raised by the assessee against reopening by a separate reasoned and speaking order is legally sustainable. 26. The material facts are not in dispute. The assessee filed its return of income in response to the notice issued under section 148 of the Act on 21.04.2021. After the reasons recorded for reopening were furnished, the assessee raised objections thereto vide letter dated 09.07.2021, which was uploaded on the Income- tax portal on 16.07.2021 under acknowledgement No.149103841130721. Thereafter, the Assessing Officer issued notice under section 142(1) of the Act. By its further reply dated 18.01.2022, the assessee specifically informed the Assessing Officer that the objections filed against reopening had not been disposed of. The assessee requested that the objections be decided by a speaking order before further proceedings were undertaken. Despite the aforesaid request, no separate order disposing of the objections was passed and the reassessment was ultimately completed on 30.03.2022.The learned CIT(A), in paragraph 9.1.2 of the impugned order, held that paragraphs 3 and 4 of the reassessment order discussed the issues raised by the assessee and that the reasons for rejecting the assessee’s contentions were embedded in the final reassessment order. The

16 ITA No. 714/Mum/2026 Cable Corporation of India Limited learned CIT(A), therefore, treated the failure to pass a separate speaking order as a mere procedural irregularity. On examination of the reassessment order, we are unable to concur with this finding.

“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

17 ITA No. 714/Mum/2026 Cable Corporation of India Limited 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.” 29. The direction is explicit that the objections are to be disposed of by a speaking order “before proceeding with the assessment”. Consideration of such objections for the first time in the final reassessment order does not satisfy the prescribed sequence.

“4. The learned senior counsel for the petitioner pointed out that in some of the cases as soon as the objections were rejected by the concerned Income-tax Officer, even the assessment order has been passed within a very short time whereby the assessee is left without any remedy to challenge such an order of rejection. 5. Hence we make it clear that if the Assessing Officer does not accept the objections so filed, he shall not proceed further in the matter within a period of four weeks from the date of receipt of service of the said order on objections, on the assessee. 6. Accordingly, rule is made absolute. 7. We also direct that the Income-tax Officer concerned shall follow the above procedure strictly in all such cases of reopening of assessment.” 31. The aforesaid decision demonstrates the purpose of requiring a separate order disposing of the objections before

18 ITA No. 714/Mum/2026 Cable Corporation of India Limited continuation of the reassessment. It enables the assessee to examine and, if so advised, challenge the rejection of its jurisdictional objections before the reassessment is completed. If the objections are considered only in the final reassessment order, the protection expressly recognised by the Hon’ble jurisdictional High Court becomes illusory.

“6. This passing of the draft Assessment order on 30th March, 2015 was in the face of the decision of the Supreme Court in GKN Driveshafts (India)Ltd. v. ITO [2003] 259 ITR 19/[2002] 125 Taxman 963, wherein it has been laid down that whenever a reopening notice is issued under Section 148 of the Act, the Assessing Officer was to make available to the assessee, on request, a copy of the reasons recorded while issuing the notice for reopening the Assessment. The assessee is then entitled to file its objection to the grounds in support of the reopening notice and the Assessing Officer is required to dispose of the assessee’s objection to the reasons recorded by a speaking order. It is only if the Assessing Officer rejects the objection that he can proceed with the Assessment proceedings of the reopened Assessments.” Thereafter, in paragraph 11, the Hon’ble jurisdictional High Court held 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

19 ITA No. 714/Mum/2026 Cable Corporation of India Limited 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.” 33. Thus, the Hon’ble jurisdictional High Court treated the failure to dispose of the objections before passing the assessment order as a jurisdictional infirmity and not merely as a procedural irregularity.

8 We note that once the impugned order finds the AssessmentOrder is without jurisdiction as the law laid down by the Apex Court inGKN Driveshafts (supra) has not been followed, then there is no reason torestore the issue to the Assessing Officer to pass a further/fresh order. Ifthis is permitted, it would give a licence to the Assessing Officer to passorders on reopeningnotice, without jurisdiction (without compliance ofthe law in accordance with the procedure), yet the only consequence,would be that in appeal, it would be restored to the Assessing Officer forfresh adjudication after following the due procedure. This would lead tounnecessary harassment of the Assessee by reviving stale/ old matters.

20 ITA No. 714/Mum/2026 Cable Corporation of India Limited 35. The Hon’ble jurisdictional High Court thus held that where the assessment order is found to be without jurisdiction on account of non-compliance with the procedure laid down in GKN Driveshafts (India) Ltd., the matter cannot be restored to the Assessing Officer for curing the defect and passing a fresh order.

“12. Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. (supra) has, however, further held that once reasons are furnished, the Assessee is entitled to lodge his objections and the Assessing Officer is duty bound to dispose of such objections, by passing a speaking order. 13. In the present case, the Appellants did lodge their objections vide letter dated 14th April, 2003. By a further letter dated 25th March, 2004, the Appellants requested the Assessing Officer to dispose of such objections by passing a speaking order before proceeding with the reassessment in respect of the Assessment Year 1997-98. However, the Assessing Officer, without proceeding to dispose of the objections raised by the Appellants by passing a speaking order, straight away proceeded to make the assessment order dated 26th March, 2004, bringing to charge taxable expenditure on ₹10,22,73,987/-. The assessment order dated 26th March, 2004, no doubt, deals with the objections raised by the Appellant and purports to dispose of the same. Ms. Linhares contends that this is a sufficient compliance with the procedure set out in GKN Driveshafts (India) Ltd. (supra), assuming that the same is at all applicable to the proceedings under the said Act. Mr. Dada, however, submits that such disposal in the assessment order itself does not constitute the compliance with the mandatory conditions prescribed by the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. (supra).”

21 ITA No. 714/Mum/2026 Cable Corporation of India Limited The precise issue was formulated in paragraph 18 as under: “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.” In paragraph 22, the Hon’ble jurisdictional High Court answered the issue as under: “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.” 37. After considering Bayer Material Science (P.) Ltd. and KSS Petron Private Ltd., the Hon’ble jurisdictional High Court concluded in paragraphs 24 and 25 as under:

“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.”

22 ITA No. 714/Mum/2026 Cable Corporation of India Limited 38. The aforesaid decision directly answers the reasoning adopted by the learned CIT(A). Even where the final assessment order purports to deal with the objections, the same is not sufficient compliance. In the present case, the reassessment order does not even purport to adjudicate the jurisdictional objections. It merely decides the proposed additions on merits.

“9. On 4 August 2021, the Petitioner filed objections to the reopening of the assessment by raising several contentions. Without disposing of such objections, on 22 November 2021, the Petitioner was issued a notice under Section 142(1) directing it to justify its claim under Section 80-IA with supporting documents. 10.On 26 November 2021, the Petitioner requested the Respondents to dispose of the objections filed by the Petitioner before proceeding any further. The Petitioner made a specific reference to the Hon’ble Supreme Court’s decision in the case of GKN Driveshafts (India) Ltd. v. ITO [2002] 125 Taxman 963/[2003] 259 ITR 19 (SC). The Petitioner also referred to this Court’s decision in the case of Asian Paints Ltd. v. Dy. CIT [2008] 296 ITR 90 (Bombay), which had provided that an assessee must be given a reasonable period of about four weeks to

23 ITA No. 714/Mum/2026 Cable Corporation of India Limited take any remedial course of action should the assessee’s objections to the reopening be rejected by the revenue. 11.The Petitioner’s objections were never disposed of, but the impugned consolidated reassessment order dated 31 March 2022 was made, in which the Petitioner’s objections were also purported to be disposed of. 12. Apart from the fact that the making of such consolidated or combined orders was not approved in some decided cases, which we propose to refer to, we think that such a procedure also involves breaching the principles of natural justice and fair play.” Thereafter, in paragraphs 13 and 14, the Hon’ble jurisdictional High Court held as under: “13. The assessing officer in Fomento Resorts & Hotels Ltd. (supra) made a similar combined order. Neither were the assessee’s objections disposed of by a separate order, nor was the assessee granted any reasonable opportunity of questioning the order disposing of the objections. In such circumstances, the Court, after analysing the decision of the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. (supra) and following its earlier precedents in KSS Petron Private Ltd. v. Asstt. CIT [IT Appeal No. 224 of 2014, dated 3-10-2016] and Bayer Material Science (P.) Ltd. v. Dy. CIT [2016] 66 taxmann.com 335/237 Taxman 723/382 ITR 333 (Bombay) quashed the combined order on the ground of want of compliance with jurisdictional parameters. 14. Accordingly, we cannot accept Mr Suresh Kumar’s contention about there being no infirmity in the impugned consolidated order dated 31 March 2022, given the above decisions referred to by us rendered in substantially similar facts.” Finally, in paragraph 16, the Hon’ble jurisdictional High Court held: “Since the impugned consolidated order warrants interference due to noncompliance with jurisdictional parameters, relegating the Petitioner to the alternate remedy would not be appropriate. As noted earlier, this Court has interfered with consolidated orders in almost identical circumstances, making assessments and disposing of objections. Therefore, Mr Suresh Kumar’s objection based on exhaustion of alternate remedy cannot be sustained in the facts of the present case.” 40. The Hon’ble High Court accordingly quashed the notice dated 30.03.2021 and the consolidated reassessment order dated

24 ITA No. 714/Mum/2026 Cable Corporation of India Limited 31.03.2022. The ratio of this later decision of the Hon’ble jurisdictional High Court is directly applicable to the facts before us.

“9. There is no statutory requirement to deal with the objections given by the assessee after receiving reasons for initiating proceedings under Section 147 of the I.T. Act. However, there is a judgment of the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd.’s case case (supra) mandating such disposal of objections before passing the assessment order. 10. The Supreme Court in GKN Driveshafts (India) Ltd.’s case (supra) made it clear that 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 a speaking order. The judgment is very clear that before proceeding with the assessment proceedings, the Assessing Officer has to pass a speaking order. Therefore, the Assessing Officer is bound to pass an order and thereafter only further proceedings could be taken for passing the assessment order. It would not suffice by giving reasons to the objections in the assessment order, in view of the judgment in GKN Driveshafts (India) Ltd.’s case (supra).” 42. Thus, even according to the decision relied upon by the Revenue, discussion of the objections in the final reassessment order does not constitute compliance with the procedure laid down in GKN Driveshafts (India) Ltd.

25 ITA No. 714/Mum/2026 Cable Corporation of India Limited 43. In paragraphs 12 and 13, the Hon’ble Madras High Court took note of an additional factual circumstance, namely that the assessee therein did not remind the Assessing Officer to dispose of the objections and continued to participate in the proceedings. The relevant paragraphs read as under:

“12. The appellant has given objections on 26 March 2016. Thereafter, the Assessing Officer issued notice of enquiry to the appellant. The appellant at no point of time cited the attention of the Assessing Officer that he has to pass a speaking order, giving disposal to the objections, before passing the assessment order. Even in the letter dated 28 November 2016, the appellant though resisted the fresh assessment proceedings, nowhere pointed out the procedure indicated in GKN Driveshafts (India) Ltd.’s case, presumably to take advantage of the irregularity committed by the Assessing Officer by not following the law laid down by the Supreme Court. 13. The right given to an assessee to ascertain the views of the Assessing Officer taking into account the objections can be waived by the assessee expressly or by implication. The appellant knowing fully well that there was no disposal to the objections, submitted to the jurisdiction of the Assessing Officer. It was only when the assessment order was passed, the appellant has come up with a contention that the mandatory procedure was not complied with by the Assessing Officer.” 44. The facts before us are materially different. In the present case, the assessee did not remain silent or acquiesce in the reassessment proceedings. In its reply dated 18.01.2022, before completion of the reassessment, the assessee expressly informed the Assessing Officer that its objections dated 09.07.2021 had not been disposed of and specifically relied upon GKN Driveshafts (India) Ltd. and Asian Paints Ltd. The assessee also contended that further proceedings under section 142(1) of the Act were

26 ITA No. 714/Mum/2026 Cable Corporation of India Limited invalid in the absence of prior disposal of the objections. There is, therefore, no question of any express or implied waiver by the assessee.

“24. In case an order is passed without following a prescribed procedure, the entire proceedings would not be vitiated. It would still be possible for the authority to proceed further after complying with the particular procedure. 25. The enactments like the Land Acquisition Act, 1894, contain mandatory provisions like Section 5A, the non compliance of which would vitiate the declaration under Section 6 of the Act. Even after quashing the declaration for non compliance of Section 5A, the Court would permit the conduct of enquiry and pass a fresh declaration within the period of limitation. 26. We therefore make the position clear that non compliance of the procedure indicated in the GKN Driveshafts (India) Ltd.’s case (supra) would not make the order void or non est. Such a violation in the matter of procedure is only an irregularity which could be cured by remitting the matter to the authority. The first issue is accordingly answered against the appellant.” 46. The aforesaid view of the Hon’ble Madras High Court is contrary to the binding decisions of the Hon’ble jurisdictional High Court in Bayer Material Science (P.) Ltd., KSS Petron Private Ltd., Fomento Resorts & Hotels Ltd. and the later decision in Kesar Terminals & Infrastructure Ltd. The Hon’ble jurisdictional High Court has categorically held that proceeding with the reassessment without first disposing of the objections is a jurisdictional defect and that the assessment cannot be restored to the Assessing Officer for curing such defect. Being

27 ITA No. 714/Mum/2026 Cable Corporation of India Limited situated within the territorial jurisdiction of the Hon’ble Bombay High Court, we are bound to follow the law laid down by the Hon’ble jurisdictional High Court. The decision of the Hon’ble Madras High Court, therefore, does not advance the case of the Revenue. 47. The learned DR also relied upon the order of the Hon’ble Supreme Court in Home Finders Housing Ltd. v. Income-tax Officer, Corporate Ward 2(3) [(2018) 256 Taxman 59 (SC); (2018) 94 taxmann.com 84 (SC)]. The special leave petition was dismissed by a non-speaking order without assigning any reasons and without declaring any principle of law. Such dismissal cannot be regarded as laying down that non-disposal of objections is merely a procedural irregularity in every case. It does not displace the binding ratio of the Hon’ble jurisdictional High Court. 48. More importantly, subsequent to the dismissal of the aforesaid special leave petition on 18.05.2018, the Hon’ble jurisdictional High Court delivered its judgments in Fomento Resorts & Hotels Ltd. on 30.08.2019 and Kesar Terminals & Infrastructure Ltd. on 27.01.2025. In both decisions, the Hon’ble jurisdictional High Court reiterated that the Assessing Officer must first dispose of the objections by a separate speaking order and that a combined order disposing of objections and completing the reassessment suffers from non-compliance with jurisdictional parameters. We are, therefore, unable to accept the contention of the learned DR that the non-speaking dismissal of

28 ITA No. 714/Mum/2026 Cable Corporation of India Limited the special leave petition in Home Finders Housing Ltd. requires us to disregard the binding and later decisions of the Hon’ble jurisdictional High Court.

the assessee filed objections against reopening on 09.07.2021;  the objections were uploaded on 16.07.2021;  the assessee expressly reminded the Assessing Officer on 18.01.2022  that the objections remained undisposed of; the Assessing Officer proceeded with the reassessment without  passing any order on the objections; the final reassessment order does not adjudicate the jurisdictional  objections; paragraphs 3 and 4 of the reassessment order deal only with the  additions on merits; and the finding of the learned CIT(A) that the objections were effectively  dealt with in the reassessment order is factually and legally unsustainable. 50. In view of the law laid down by the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. and the binding decisions of the Hon’ble jurisdictional High Court in Asian Paints Ltd., Bayer Material Science (P.) Ltd., KSS Petron Private Ltd., Fomento Resorts & Hotels Ltd. and Kesar Terminals & Infrastructure Ltd., we hold that the reassessment order dated 30.03.2022 was passed in breach of the mandatory procedure governing the exercise of reassessment jurisdiction. The defect is not cured by the assessee’s participation in the proceedings, particularly when

29 ITA No. 714/Mum/2026 Cable Corporation of India Limited the assessee had expressly objected to further proceedings before completion of the reassessment.

Order pronounced in the open court on 19.08.2026.

Sd/- Sd/- (KAVITHA RAJAGOPAL) MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 19.08.2026 ANKIT, PS

आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलाथी / The Appellant 1.

30 ITA No. 714/Mum/2026 Cable Corporation of India Limited 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई/ DR, ITAT, Mumbai 5. 6. गार्ड फाईल / Guard file.

आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai