Pinnacle Constro and Ecohomes Pvt. Ltd. Vs ACIT (ITAT Pune)
Reassessment Quashed for Violating 4-Week Cooling-Off Period After Disposal of Objections – ITAT Pune Follows Asian Paints
The Pune ITAT quashed a reassessment order holding that the Assessing Officer violated the binding principle laid down by the Bombay High Court that, after rejecting an assessee’s objections to reopening, the AO must wait at least four weeks before proceeding further with the reassessment.
The assessee’s case was reopened under section 147 based on information received from independent sources. After receiving the reasons for reopening, the assessee filed objections which were disposed of by the Assessing Officer on 29.11.2019. However, the reassessment order under sections 143(3) read with 147 was passed on 16.12.2019, i.e., before expiry of four weeks from the date of disposal of objections.
Before the Tribunal, the assessee relied on the Bombay High Court decisions in Asian Paints Ltd. v. DCIT and Bharat Jayantilal Patel v. Union of India, which mandate that where objections to reopening are rejected, the Assessing Officer cannot proceed further for a period of four weeks, thereby enabling the assessee to seek appropriate legal remedies.
The Tribunal noted that an identical issue had recently been decided by the Pune Bench in Pramod Manikchand Dugad, where reassessment proceedings were quashed for the same procedural violation. Applying the ratio of the Bombay High Court judgments, the ITAT held that the Assessing Officer failed to adhere to the mandatory waiting period after disposal of objections and therefore the reassessment proceedings were invalid in law.
Accordingly, the reassessment order was quashed in its entirety. Since the legal ground itself succeeded, the Tribunal did not consider the merits relating to the disallowance of interest, holding those grounds to be academic and infructuous
FULL TEXT OF THE ORDER OF ITAT PUNE
