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Income Tax Appellate Tribunal, DELHI BENCH - ‘SMC’ NEW DELHI
Before: SHRI BHAVNESH SAINI
Both the appeals by the same assessee are directed against different orders of Ld. CIT(A) – 13, New Delhi dated 15th June, 2016 for assessment. Year 2003-04 and 2004-05.
I have heard Ld. Representatives of both the parties and perused the material on record.
In both the appeals the issues are common. In both the appeals, assessee challenged the orders of authorities below in framing reassessment orders without complying with the mandatory conditions of section 147 to 151 and more so directions of the Tribunal have not been complied with. The assessee also challenged the additions of Rs. Page 1 of 5 ,4141/Del/2016 Shri Shyamal Mukherjee vs. ITO 12,50,000/- and Rs. 6 lacs on account of payment made towards purchase of property.
3.1 Ld. Counsel for assessee submitted earlier assessment order was set aside and matter is restored to Assessing Officer by ITAT, in Deptt. appeals No. 1838/10 for assessment. Year 2003-04, for assessment. Year 2004-05 with CO of assessee in CO/169/10 and CO/170/10 vide order dated 30.1.2012. Assessing Officer was directed to decide objections of assessee u/s 147 / 148 of I.T. Act and decide the addition on merits afresh. The assessee filed objections u/s 147/148 before Assessing Officer in set aside proceedings (PB71), which has not been adjudicated by Assessing Officer. Order of ITAT is disobeyed. Copy of reason is filed at paper book – 11. He has submitted that issue is covered in favour of assessee by order of ITAT Delhi Bench in case of M/s. Shiva Rubber Industries vs. ITO in ITA 2212/Del/2015 dated 25/4/2017 in which para 7 to 9 it was held as under :-
“7. Secondly, the present matter was restored back to the file of the AO by the IT A T in vide order dated 10" September, 2009 and the order is on record. The relevant paragraph is reproduced hereinbelow:
"Firstly, we shall proceed to see as to whether the Assessing Officer has complied the provisions of section 147 to 151 of the Act, as per law or not. In this case, the notice u/s. 148 was issued on 28.93.2007, after recording the reasons, which are mentioned in the assessment order itself. The AO thereafter issued noticed u/s. 142(1) to the assessee on 01. 11.2007, in reply-thereto, the assessee requested the AO to furnish the copy of reasons recorded. Thereafter, the copies of reasons were furnished to the assessee on 07.12.2007. The filed its reply on 27.12.2007. The case was fixed for hearing on 31.12.2007, and thereafter, the AO completed the assessment on the very same day i.e. 31.12.2007. From the perusal of the 2 ,4141/Del/2016 Shri Shyamal Mukherjee vs. ITO assessment order, its is, thus clear that the assessment has been completed within three days after the receiving the assessee's reply on 27.12.2007. The assessee's objections to the reasons recorded has not been considered and decided by the AO before he makes the .assessment u1s. 147 of the Act. We, therefore. find that the spirit of the judgment of Hon'ble Supreme Court in the case of GKW Driveshaft Limited reported in 2511TR, 19 (SC) has not been compiled with. At this stage, the ld. counsel for the assessee has submitted that this irregularity can be cured if the matter is restore back to the file of the AD, directing him to deal with the objections. raised by the assessee before passing the assessment order on merit. In this connection, ld. counsel.
9. In the result, both the appeals filed by the assessee as well as by the revenue are allowed for statistical purpose.
7.1 From the said order of the ITAT, it is evident that objections of the reasons recorded was not considered and decided by the AO. The AO makes the assessment u/s.147 of the Act. Learned counsel for the assessee relied upon the decision in the case of M/s. S. Power Pvt. Ltd. vs. ITO in dated 29.04.2016 at pages 288 to 300 and the relevant decision in paragraph 16 is reproduced hereinbelow:
"In the present case also there was a failure on the part of the AO to comply with the mandatory requirement of disposing off the objections of the assessee, therefore, the reopening was not valid.' Accordingly, it can safely be held that the reopening done by the AO 147 r.w.s. 148 of the Act on the basis of incorrect reasons and without disposing off the objections raised by the assessee was invalid. In that view of the matter the impugned order passed by the Id. CIT(A) is set aside and the reassessment framed by the AO u/s.I47 r.w.s. /43(3) of the Act is quashed."
7.2 The reliance in the said decision was placed in the case of PCIT vs. Tupper Ware India Pvt. Ltd. reported in (2016) 284 CTR 68 (Del) available at pages 251 to 255 and the relevant paragraph at page 253. The relevant paragraph of the decision is reproduced hereinbelow.
"6. The court is of the considered view that after having correctly understood the decision of the Supreme court in G.K.N. riveshafts (India) Ltd. (supra) as mandatorily requiring the AD to comply with the procedure laid down therein and to dispose of the objections to the reopening 3 ,4141/Del/2016 Shri Shyamal Mukherjee vs. ITO order with a speaking order, the CIT(A) committed an error in not quashing the reopening order and the consequent assessment. "
In the circumstances and facts of the case, the identical facts are there In the present case and the AO has not disposed of the objections of the reasons raised by the assessee as mentioned by the ITA T in the first round, and therefore, necessarily the assessment is liable to be quashed. Accordingly, we order to quash the said assessment/re-assessment. Thus on both the counts legally the assessee succeeds on legal grounds and grounds no. 1 , 2 and 3 are allowed. Since, the assessee succeeds on legal grounds. The grounds on merit become academic in nature, therefore, do not require any adjudication.
In the result, the appeal of the assessee in ITA is allowed.”
3.2 He has therefore submitted reassessment order may be quashed.
On the other hand Ld. DR relied upon orders of the authorities below.
I have considered the rival submissions and perused the material on record. In the earlier first round proceedings before ITAT, the Tribunal while deciding the departmental appeal and cross objections of assessee vide order dated 30th January, 2012 restored the matter back to the file of Assessing Officer to redeciding objections of the assessee u/s 147 of the I.T. Act and addition on merit. The assessee filed objections to the reopening of the assessment before Assessing Officer.