Validity of Order of Reassessment passed by AO without disposing the objection raised by the assessee
Where AO had passed the reassessment order without disposing off the objection raised by the assessee, the order was invalid because the assessee is entitled to raise objection against the reason given in reassessment notice and the same must be disposed of by a speaking order by AO before proceeding to reassess the assessee’s income in terms of the notice earlier given under section 148.
Assessee was issued notice of reassessment under section 148 and addition of deemed dividend income under section 2(22)(e) was made in reassessment order by AO. The assessee assailed the validity of reassessment order contending that objection filed before the AO were not disposed off before passing of the order. CIT(A) rejected assessee|s contention holding that non-communication of reason to the assessee is not fatal to the reassessment proceedings.
Held: AO is bound to disclose the reason of reassessment within reasonable time and on receipt of the reasons, the assessee is entitled to raise objection and if any such objection is filed, the same must be dispose of by a speaking order before proceeding to reassess the assessee’s income in terms of the notice earlier given. Order of CIT(A) was not justified because the assessee did not contest the non-communication of reasons by the AO but challenged the action of AO in not disposing of objections of the assessee which is mandatory on AO’s part. Therefore, reassessment order was quash.
Decision: In assessee’s favour.
Distinguished:ITO v. Smt. Gurinder Kaur. (2006) 105 TTJ 198 (Delhi)
Followed: GKN Driveshafts (India) Ltd. v. ITO & Ors. (2003) 259 ITR 19 (SC) S. Narayanappa & Ors. v. CIT, Bangalore (1967) 63 ITR 219 (SC) and Vishwanth Engineers v. ACIT (2013) 352 ITR 0549—Guj.
Validity of Order of Reassessment passed by AO without disposing the objection raised by the assessee
