Agrico Fincap Ltd Vs ITO

Whether CIT(A) despite the directions of the Tribunal, can refuse to adjudicate the additional grounds raised by the assessee – NO : ITAT

– Assessee’s appeal allowed : DELHI ITAT

Whether CIT(A) despite the directions of the Tribunal, can refuse to adjudicate the additional grounds raised by the assessee – NO : ITAT

 pursuant to the directions of the Tribunal, the CIT(A) admitted the additional /modified ground of appeal being a legal ground and held that in the absence of any reason for raising the additional ground of appeal at a later stage and in the absence of records, rejected /dismissed the additional ground of appeal, which shows that CIT(A) despite the directions of the Tribunal has not adjudicated the additional ground. We further note that CIT(A) has held that the non-disposal of the objections to the notice u/s. 148 is merely a procedural defect, which is against the mandate of the decision of Supreme Court of India in the case of GKN Driveshaft (India) Ltd. vs. ITO, – 2002-TIOL-634-SC-IT. It was further noted that the powers of the CIT(A) are coterminous with the powers of AO, in relation to the disposal of Preliminary Objections, however, CIT(A) has not exercised his said powers and did not dispose of the said preliminary objections, which is not sustainable in the eyes of law;

the re-assessment cannot be sustained. As observed though the preliminary objection was raised against reopening of the assessment, the AO did not dispose of the same till the conclusion of re-assessment proceedings and passed order under section 147 of the Act and even on the directions of the Tribunal, the CIT(A) who had the coterminus powers with the AO has not adjudicated the same. It was noted that AO is under a mandate to dispose of such objections before proceeding with the assessment by passing a speaking order and even the CIT(A) has co-terminus with the powers of AO, which have not been exercised by them, therefore, the reassessment under section 147 cannot be sustained and hence, it was decided to quash the reassessment order and allow the legal ground raised by the assessee. In result, the appeal filed by assessee is allowed.

ITA No.300/Del/2018