MR. KAMAL JAJOO,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -4(3) C B CENTRAL RANGE-4, MUMBAI

The present appeal has been filed by the assessee challenging the impugned order 14.08.2024 passed u/s 250 of the Income Tax Act, 1961 („the Act‟), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2011-12.

I have heard the counsels for both the parties, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities.

From the records, I found that through the present petition, the assessee has challenged the jurisdiction of the AO to initiate the reassessment proceedings u/s 147 of the Act. It was submitted that the AO has failed to follow the procedure laid down by Hon‟ble Supreme Court in the case of GKN Driveshaft India Limited Vs. ITO [2003] 259 ITR 19 (SC) by not passing the order disposing of the objections raised by the assessee against the reasons recorded to issue a notice u/s 148 of the Act.

After having gone through the records, I found that assessee has raised objections before the AO however the same were not disposed off, therefore in our view, assessee has got every right to raise this legal ground at any stage before any authority. In this regard, I am convinced that the additional grounds raised

The Ld.A.O. failed to pass any order disposing off the objections raised by the Appellant against the reasons recorded to issue a notice under section 148 of the Act. Hence, the Ld. A.O. has failed to comply the procedure prescribed by the Hon'ble Supreme Court in the case of GKN Driveshaft (Supra). In view of the same, the notice under section 148 of the Act and the subsequent reassessment order passed under section 143(3) r.w.s 147 of the Act are bad in law and the same needs to be quashed.

Both the additional grounds are interrelated and interconnected and relates to challenging the reassessment proceedings initiated u/s 147 of the Act as bad in law and without jurisdiction. Since, these legal grounds goes to the roots of the case, therefore I have decided to adjudicate these grounds through the present consolidated order firstly.

I have heard the counsels for both the parties on additional grounds, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities. From the records I noticed that reassessment proceedings were initiated u/s 147 of the Act because as per information received by the AO from ADIT Investigation, Kolkata to the effect that several entities were found to be depositing cash in bank accounts and thereafter amounts were being rotated through banking channel among various entities. And as per the information, the assessee had received funds of Rs. 2,03,73,721/- through the entity „Sajendra Mookim‟ which found to be a shell entity in investigation.

Thus while initiating reopening of assessment proceedings notice u/s 148 of the Act was issued upon assessee on 28.03.2018 in response assessee had filed written submissions on 07.05.2018. The assessee requested for copy of reasons recorded for reopening and hence wide office letter dated 04.07.2018 reasons for reopening were provided.

Now to question for decision before us is as to whether the objections filed by the assessee were disposed off or not before finalisation of assessment. In this regard, our attention was drawn to the paper book wherein at page No. 98 to 111 the objections filed by assessee to the reopening of assessment has been placed on record. However, on the perusal of the said objections, I found that these are dated 11.10.2018, but having sale of receipt by the revenue on 23.10.2018. Apart from this assessee had filed a reply to the notice u/s 142(1) on 15.10.2018 at paper book page No. 112 and another reply was also filed along with documents which is a Paper book page No. 113 & 114.

On going through the order of assessment, although there is a mention of supply of reasons recorded for reopening to the assessee but there is no mention in the entire order regarding filing of objections by the assessee. And it is important to mention here that although assessee had filed reply to the notice u/s 142(1) on 15.10.2018 but even in that reply there is no mention of filing objections against reassessment proceedings. Therefore, in our view in order to decide this ground consultation of assessment record is necessary so that clear factual picture can emerge.

There is no dispute to the legal proposition as set down by Hon‟ble Supreme Court in the case of GKN Driveshaft (supra).

Be that as it may, in my view, the interest of justice would be met only if the matter is the restored back to the file of Ld. CIT for deciding this legal ground after consulting and verifying the assessment records, needless to mention after providing opportunity of hearing to the assessee. Thus, keeping in view the above factual position, the present appeal of the assessee is restored to the file of Ld. CIT(A) for adjudicating, the additional grounds on merits by providing opportunity of hearing to the parties.

Before parting, I make it clear that our decision to restore the matter back to the file of Ld. CIT(A) shall in no way be construed, as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law.

Since I have restored the additional grounds raised