IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `SMC' NEW DELHI
BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER
ITA No.-2916/Del/2018
(Assessment Year: 2010-11)
Archna Garg vs ITO,
D/o. Sh. Mahesh Chand Ward-1(1),
164-Devi Nagar, S.K.Road, Meerut
Meerut
PAN : AJWPG1087E
Assessee by Shri Piyush Agarwal, CA
Revenue by Shri P.S.Thuinguleny, Sr. DR
Date of Hearing 13.12.2018
Date of Pronouncement 18.12.2018
ORDER
PER N.S.SAINI, ACCOUNTANT MEMBER :
This is an appeal filed by the assessee against the order of
Commissioner of Income Tax (Appeals)-Meerut, dated 15.02.2018
for assessment year 2010-11. The assessee raised following
grounds of appeal :-
"1. That each ground of appeal is without prejudice
to each other.
2. That the Ld. CIT(A) erred in law to direct AO
that "-the AO can again proceed to make fresh
reasstt. by starting the reasstt. Proceedings from
the stage of receipt of objections as per the ratio of
GKN Drive Shafts (Supra) and only thereafter, if
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(Archana Garg)
the need remains, he will frame the fresh reasstt.
Order as per law."
2. The brief facts of the case are that the assessee filed
original return of income for the assessment year 2010-11 on
30.07.2010 showing income of Rs. 1,61,300/-. The Assessing
Officer issued notice u/s 148 of the Act on 21.03.2017 for
reopening of the assessment after recording the reasons for
reopening of the assessment on 07.03.2017. The Assessing
Officer in the reasons recorded has stated that the assessee
has made cash deposit of Rs. 26,34,850/- in Saving Bank
Accounts maintained with State Bank of India corporate
centre. The assessee was issued show cause notice on
06.01.2017 for verification of source of cash deposit to which
the assessee made no compliance therefore the Assessing
Officer inferred that assessee failed to disclose fully and truly
all material facts necessary for his assessment.
3. The assessee demanded copy of reasons recorded vide
letter dated 14.06.2017. The Assessing Officer supplied copy
of the recorded reasons to the assessee on 08.11.2017 and
thereafter the assessee submitted to the Assessing Officer
that the original return filed by the assessee on 30.07.2010
may be treated as the return filed pursuance to the notice u/s
148 of the Act. The assessee thereafter filed objection against
the reopening of the assessment before the Assessing Officer
on 06.12.2017. The Assessing Officer passed assessment
order u/s 147 r.w.s. 143(3) of the Act on 08.12.2017 without
disposing the objections filed by the assessee.
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(Archana Garg)
4. The assessee filed appeal before the Commissioner of
Income Tax (Appeals) and contended that since the
assessment order was passed by the Assessing Officer on
08.12.2017 u/s 147 r.w.s. 143(3) of the Act without disposing
of the objections filed by the assessee against the reopening
of the assessment therefore the re-assessment order passed
by the Assessing Officer was bad in law.
5. The Commissioner of Income Tax (Appeals) after
considering the submission of the assessee held that he has
no inherent power to set aside the matter to the Assessing
Officer therefore, he deemed it appropriate to cancel the
impugned assessment order. Thereafter he proceeded to
direct the Assessing Officer that he can again proceed to
make fresh re-assessment proceedings from the stage of
receipt of objections and thereafter to dispose off the said
objections as per the ratio of G.K.N. Drive Shaft (supra) and
after disposing of the objections of the assessee and
thereafter if need remain to reframe the fresh reassessment
as per law. Being aggrieved by the order of the Commissioner
of Income Tax (Appeals) the assessee is in appeal before me.
6. The contention of the Authorised Representative of the
assessee is that since the reassessment order dated
08.12.2017 passed by the Assessing Officer u/s 147 r.w.s.
143(3) of the Act without disposing of the objections of the
assessee for reopening of the assessment was bad in law the
said reassessment order was liable to be quashed. The
Commissioner of Income Tax (Appeals) was not justified in
directing the Assessing Officer to start the reassessment
proceedings from the stage of receipt of objections by the
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(Archana Garg)
assesee. He relied on the decision of Hon'ble Delhi High Court
in the case of Multiplex Trading & Industrial Co. Ltd. 170
(Delhi).
7. On the other hand the Departmental Representative
supported the order of the Commissioner of Income Tax
(Appals).
8. I have heard the rival submissions and perused the
orders of the lower authorities and materials available on
record. The undisputed facts of the case are that the assessee
filed original return of income on 30.07.2010 showing income
of Rs. 1,61,300/-. The Assessing Officer reopened the
assessment by issue of notice u/s 148 of the Act on
21.03.2017. The assessee filed application on 14.06.2017 for
supply of reasons recorded. The reasons were supplied to the
assessee on 08.11.2017. Thereafter the assessee filed
objection to the reasons recorded for reopening of the
assessment on 06.12.2017.The Assessing Officer without
disposing of the objections of the assessee to the reopening
of the reassessment passed order u/s 147 r.w.s. 143(3) of
the Act on 08.12.2017. The assessee carried matter in
appeal before the Commissioner of Income Tax (Appeals) and
contended that rassessment order dated 08.12.2017 was bad
in law and liable to be quashed as the same was passed by
the Assessing Officer before disposing of the objections of the
assessee.
9. The Commissioner of Income Tax (Appeals) though
cancelled the reassessment order but further directed the
Assessing Officer to commence the reassessment proceeding
from the stage of receipt of objections by the assessee and to
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(Archana Garg)
reframe the reassessment order after disposing of the
objections of the assessee.
10. The contention of the Authorised Representative of the
assessee is that this direction of the Commissioner of Income
Tax (Appeals) is unsustainable because when the
reassessment order is passed by the Assessing Officer
without first disposing of the objections of the assessee the
said assessment order is bad in law and liable to be quashed
in view of the decision of Hon'ble Delhi High Court in the case
of Multiplex Trading & Industrial Co. Ltd.
11. I find that the Hon'ble Delhi High Court in the case of
Multiplex Trading & Industrial Co. Ltd. (supra) has held as
under :
"32. There is yet another safeguard provided to the
Assessee which was sought to be side-stepped by
the AO. The Supreme Court in the case of G.K.N
Driveshafts (India) Ltd. v. ITO: (2003) 259 ITR 19
(SC); (2003) 1
SCC 72 had held that if an Assessee if so desirous,
could seek reasons for issuance of notice under
Section 148 of the Act and the AO would be bound
to furnish the same within a reasonable time. The
Court further held that that the noticee would be
entitled to file objections against the issuance of
the notice and the AO would be bound to dispose of
the same by passing a speaking order.
33. In the present case, the Assessee filed its
objections by a letter dated 12th December, 2008
and requested the AO to drop the proceedings. The
Assessee by its letter dated 18th December, 2008
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(Archana Garg)
sent in response to another notice, also provided its
response in respect of the alleged accommodation
entries, which were reported by the Investigation
Wing. However, the objections filed by the
Assessee were not disposed of by the AO and he
proceeded to frame the assessment. This Court in
M/s Haryana Acrylic Manufacturing Co. (P) Ltd.
(supra) had observed that the requirements
regarding recording the reasons to believe;
communicating the same to the Assessee;
permitting the Assessee to file the objections; and
passing a speaking order disposing of the
objections are all designed to ensure that the AO
does not reopen assessments, which have been
finalized, on his mere whim and fancy and that he
does so only on the basis of lawful reasons. It was
further held that a deviation from the directions
issued by the Supreme Court in G.K.N Driveshafts
(India) Ltd.(supra) would entail nullifying the
proceedings. Although the AO is required to provide
reasons, receive objections and pass a speaking
order thereon, only after the notice under Section
148 of the Act has been issued; these requirements
are an integral part of the safeguards which have
been inbuilt for ensuring that the assessments are
reopened only for lawful reasons and in a
transparent manner. If the said safeguards are
flouted, it would invalidate the exercise of
jurisdiction under Section 147 and 148 of the Act."
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(Archana Garg)
12. I find that the instant case on the above stated facts
the decision of the Hon'ble Delhi High Court squarely applies
to the case of the assessee. Therefore, respectfully following
the above quoted order of the Hon'ble Delhi High Court, I set
aside the order of the Commissioner of Income Tax (Appeals)
directing the AO to commence the reassessment proceeding
from the stage of receipt of objections to the reopening filed
by the assessee and reframe the reassessment order and
allow the grounds of appeal of the assessee.
13. In the result, appeal of the assessee is allowed.
Order pronounced in the Court on 18th December,
2018 at New Delhi.
Sd/-
(N.S.SAINI)
ACCOUNTANT MEMBER
Dated: 18.12.2018
*BR*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
TRUE COPY
ASSISTANT REGISTRAR
ITAT NEW DELHI
8 ITA NO. 2916/Del/2018
(Archana Garg)
Date of dictation 17.12.2018
Date on which the typed draft is placed before 18.12.2018
the dictating Member
Date on which the typed draft is placed before 18.12.2018
the Other Member
Date on which the approved draft comes to 18.12.2018
the Sr. PS/PS
Date on which the fair order is placed before 18.12.2018
the Dictating Member for pronouncement
Date on which the fair order comes back to 18.12.2018
the Sr. PS/PS
Date on which the final order is uploaded on 18.12.2018
the website of ITAT
Date on which the file goes to the Bench Clerk 18.12.2018
Date on which the file goes to the Head Clerk
The date on which the file goes to the
Assistant Registrar for signature on the order
Date of dispatch of the Order
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