Case Law Details
Fomento Resorts & Hotels Ltd Vs ACIT (Bombay High Court)
Conclusion: Since AO had purported to assume the jurisdiction for reopening of assessment, without having first disposed of assessee’s objections to the reasons by passing a speaking order, therefore, failure to follow the procedure renders the assumption of jurisdiction by AO ultra vires in law.
Held: In the present case, assessee-company lodged their objections and requested AO to dispose of such objections by passing a speaking order before proceeding with the reassessment in respect of the Assessment Year 1997-98. However, AO , without proceeding to dispose of the objections raised by assessee by passing a speaking order, straight away proceeded to make the assessment order dated 26th March, 2004, bringing to charge taxable expenditure on ₹10,22,73,987/-. The moot question was, therefore, the disposal of the objections by AO in his assessment order dated 26th March, 2004 constituted sufficient compliance with the procedure prescribed in the case of GKN Driveshafts (India) Ltd. 259 ITR 19 (SC) or, whether it was necessary for AO to have first disposed of assessee’s objections by passing a speaking order and only upon communication of the same to assessee, proceeded to reopen the assessment for the Assessment Year 1997-98. It was held AO had purported to assume the jurisdiction for reopening of assessment, without having first disposed of assessee’s objections to the reasons by passing a speaking order, thus, following the law laid down in GKN Driveshafts (India) Ltd.259 ITR 19 (SC) , Bayer Material Science (P) Ltd. 382 ITR 333 (Bom) and KSS Petron Private Ltd., such assumption of jurisdiction by AO was ultra vires.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Heard Mr. Rafiq Dada, learned Senior Advocate with Mr. N. Thakkar and Ms. V. Palyekar for Appellant and Ms. Susan Linhares, Standing Counsel for the Respondent.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
