Reassessment held void ab initio as AO failed to dispose of objections before passing assessment order
Meetu Kumari | Jul 3, 2025 |
Income Tax Reassessment Without Deciding Objections Held Void: ITAT
On October 31, 2015, the assessee submitted her initial income return for the fiscal year 2015–16. Following that, reassessment procedures were started when notice under Section 148 of the Income-tax Act, 1961, dated 31.03.2021, was issued and served on 18.03.2018. The assessee filed thorough objections via the e-portal on March 22, 2022, after requesting a copy of the documented reasons for reopening after receiving the notice.
On March 29, 2022, however, the Assessing Officer (AO) issued the reassessment order without addressing the assessee’s objections. Later, during the appellate proceedings before the CIT(A), it was discovered that the AO only addressed the objections in a letter dated 07.03.2024. The CIT(A) nonetheless upheld the reassessment, accepting the delayed disposal of objections as valid. Hence, the appeal.
Main issue before the Tribunal: Whether the reassessment was valid when the AO failed to dispose of the assessee’s objections before completing the reassessment, contrary to the mandatory requirement laid down by the Supreme Court.
ITAT’s Ruling: The Tribunal came down firmly on the procedural lapse. The ITAT, while granting the assessee’s appeal, concluded that the reassessment procedures started under Section 148 were unlawful. The Tribunal held that even though the assessee had filed thorough objections to the reopening of the assessment on March 22, 2022, the Assessing Officer issued the reassessment order on March 29, 2022, without first addressing these objections as required by law.
According to the Tribunal, the Supreme Court‘s procedure in CIT v. Kelvinator of India Ltd. was obviously broken by the AO, which only addressed the objections much later, on 07.03.2024, during the appellate stage. It was decided that the entire process is void ab initio and bad in law if the objections are not resolved before the reassessment is finished. Therefore, the appeal was allowed on jurisdictional grounds, without going into the merits.
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