SANTOSH AGGARWAL,NEW DELHI vs. ITO, NEW DELHI
What did the Tribunal hold?
The ITAT held that the AO and CIT(A) failed to deal with the assessee's preliminary objections regarding the reopening of assessment. Therefore, the case was remanded to the AO to decide these objections before proceeding with the assessment.
What were the facts?
The Assessing Officer (AO) issued a notice under Section 148 to reopen the assessment for AY 2005-06. The assessee filed objections to the reopening, but the AO passed an assessment order without addressing them. The CIT(A) upheld the AO's action, and the assessee appealed to the ITAT.
What were the issues?
Whether the reopening of assessment under Section 147/148 was valid when the AO failed to deal with the assessee's preliminary objections. Whether the addition of gifts under Section 68 was justified without addressing the objections.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Before: SHRI R. S. SYAL & SMT SUCHITRA KAMBLE
ORDER PER SUCHITRA KAMBLE, JM
This appeal is filed by the Assessee against the order dated 14/2/2012 passed by CIT(A)-XXV, New Delhi. 2. At the time of hearing Ground No. 6 & 7 was not pressed by the Ld. AR. Hence the same are dismissed.
3. The grounds of appeal which were contested are as follows:
“1. The CIT(A) erred in confirming the action of the Assessing Officer to issue notice u/s 148 of the Act ignoring that the foundation of the assumption of the jurisdiction was never laid by him. 2. The CIT(A) failed to appreciate that the Assessing Officer recorded reasons to issue notice u/s 148 for the assessment year 2004-05 whereas the notice u/s 148 was issued for the Assessment Year 2005-06. Issuance of notice for the Assessment Year 2005-06 without recording reasons for the assessment year is illegal, void ab initio, bad in law.
3. The CIT (A) failed to appreciate that the order passed by the Assessing Officer u/s 143(3)/147 is volatile of the mandatory procedure laid down by the Apex Court, as the preliminary objections filed by the assessee on 16/6/2008 against the assumption of jurisdiction u/s 147 were never dealt with by the Assessing Officer before passing the assessment order.
The CIT (A) erred in confirming the assessee action of the Assessing Officer in adding the Gift of Rs. 10,00,000/- to the income of the assessee/as undisclosed sources.
5. The CIT (A) erred in confirming the action of the Assessing Officer in adding Rs.50,000 to the income on account of the alleged commission paid.”
The assessee filed return for the Assessment Year 2005-06 on 31/8/2005 declaring income of Rs.2,07,968/-. The main sources of income were that of salary, capital gain and income from other sources. During the year under consideration, the assessee received two cheques of Rs.5 lacs from Shri Neeraj Jain, Proprietor of M/s Pooja Expo. The Assessing Officer after recording reasons and satisfying himself issued notice dated 20/3/2008 u/s 148 of the Income Tax Act, 1961 and served on 24/3/2008. In response to the said notice, Chartered Accountant of the assessee filed a letter dated 28/3/2008 requesting to treat the return filed u/s 139(1) of the Income Tax Act as return filed in response to notice u/s 148 of the Income Tax Act. He also requested to intimate for the Assessment Year 2005-06. The reasons were given to the assessee on the very same day. The Assessing Officer gave questionnaire dated 30/5/2008 and also asked to file relevant details in support of gift received by Ms. Santosh Aggarwal. The Ld. AR of the assessee in response to questionnaire dated 30/5/2008 filed letter dated 16/6/2008 and furnished the details. The assessee in the said letter dated 16/6/2008 also filed preliminary objections to reopening of assessment issued u/s 147/148 of the Income Tax Act, 1961. The Assessing Officer without considering the said objections passed assessment order and added Rs. 10,00,000/- u/s 68 in the hands of the assessee.
4. The assessee filed appeal before the CIT (A). The CIT (A) while deciding the issue overlooked the fact that the objection of the assessee in respect of issuance of notice u/s 148/147 was not decided by the Assessing Officer. In fact the CIT(A) has given finding that the assessee also did not question or contest the validity of notice before the Assessing Officer during the course of assessment proceedings as specifically mentioned in Para 5.4 of the CIT (A)’s order. The CIT (A) dismissed the appeal of the assessee. Hence, the present appeal filed by the assessee.
The Ld. AR submitted that the reasons recorded and the notice u/s 148 was issued on the very same day i.e. on 20/3/2008 and the objections to the issuance of notice were placed before the authorities on 16/6/2008. Despite objections placed before the authorities, both the Assessing Officer and the CIT (A) had not dealt with the same as per the statute. Therefore, Ld. AR requested that the objection of the assessee for issuance of notice u/s. 148 should have been considered and decided by the Assessing Officer.
The Ld. DR was unable to answer why the objections were not dealt by the Assessing Officer as well as by the CIT (A).
We have heard both the parties and perused all the records. The objection letter dated 16.06.2008 was clearly mentioned in the assessment order. Despite taking note of the same, the Assessing Officer failed to take any decision on the said objections. The CIT (A) totally over looked the fact that objections of the assessee were not dealt by the Assessing Officer. In view of this, it will be proper, if the objections are considered and decided by the Assessing Officer in the interest of justice. Both the sides are agreed to this proposition. It is hereby directed to the Assessing Officer to decide the objection dated 16/6/2008 filed by the assessee before taking up the assessment. Needless to say, the assessee be given full opportunity to be heard.
In result, the appeal of the assessee is partly allowed for statistical purpose.
The order is pronounced in the open court on 17th of May, 2016.
More judgments on Section 148
- ACIT Central Bilaspur, Bilaspur vs Arun Kumar Agrawal, SaktiITSSA 26/RPR/2025[2018-19]Status: Disposed21 Oct 2026AY 2018-19
- Vinod Agrawal, Kawardha vs Assisstant Commissioner of Income Tax…ITA 666/RPR/2026[2019-20]Status: Heard21 Oct 2026AY 2019-20
- Sar Business Tradelink Private Limited… vs Income Tax Officer, Ward - 1(2), RaipurITA 599/RPR/2026[2014-15]Status: Heard21 Oct 2026AY 2014-15
- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
- Adj Agri International LLP, Rajkot vs The Income Tax Officer, Ward-1(1)(1), RajkotITA 1198/RJT/2026[2018-19]Status: Disposed21 Oct 2026AY 2018-19
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