Reasessment without passing speaking order to dispose off asessee’s objections is invalid

The brief facts of the case is that the assessee filed its return of income for the assessment year 2009-10 declaring total income at Rs. 97,97,71,660. The case was selected for scrutiny and the assessment was completed under section 143(3) of the Income Tax Act, 1961 (The Act) dated 23.12.2011 assessing income at Rs. 98,02,21,680. Thereafter, the Assessing Officer issued notice u/s 148 of the Act on the ground that there is an escapement of income and the assessment was reopened and completed u/s 143(3) r.w.s. 147 dated 21.12.2016.

Against the reassessment order passed by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) by challenging the reopening on two counts, viz., (1) reopening notice was issued beyond 4 years and the Assessing Officer has not established that there is a failure on the part of the assessee to disclose fully and truly all material facts to complete the assessment in the absence of any fresh tangible material and (2) the assessee raised objection for reopening and the Assessing Officer without considering the objectio raised by the assessee and also not disposed the objection raised by the assessee by passing speaking order, the reassessment order is invalid. After considering the submissions of the assessee while holding that the reopening of assessment u/s 148 of the Act is bad in law, the ld. CIT(A) has held that the additions made in the reassessment proceedings is clearly a change of opinion and allowed the appeal of the assessee.

Aggrieved, the Revenue filed an appeal before the Tribunal. The ld. DR has submitted that as per the decision of the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19, the issue of objection raised by the assessee for reopening of assessment against which the Assessing Officer has not passed any order, the matter may be remitted back to the Assessing Officer. ITAT observed that the assessee has raised objection for reopening of assessment and the Assessing Officer has not passed any speaking order in respect of the objections raised by the assessee. It respectfully following the decision of the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO (supra), set aside the order passed by the ld. CIT(A) and remit the matter back to the file of the Assessing Officer directing to consider the objections raised by the assessee in respect of reopening of assessment and pass speaking order. Thus, the appeal filed by the Revenue is allowed for statistical purposes.

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