Amit Kumar Banthia (HUF) Vs DCIT (ITAT Bangalore)
Reassessment proceedings quashed due to non-compliance with GKN Drive Shaft procedure: Bang ITAT
Assessee filed its return of income declaring total income of Rs. 11,167/- & claiming Rs19,38,938 as exempt u/s 10(38). Assessee filed its return of income in response u/s 148 & called for the copy of reasons recorded. AO provided the reasons recorded on 4.2.2022 & against these reasons, assessee filed its objections on 1.3.2022 objecting to the re-assessment proceedings. AO completed the assessment & made the addition of Rs.19,38,940/- u/s 68 by observing that the long-term capital gain claimed by Assessee is a bogus gain & hence the same is added u/s 68.
Assessee filed an appeal before the CIT(A) & inter-alia argued the matter on the illegality of the proceedings as well as on the merits of the addition. CIT(A) confirmed the jurisdiction of AO u/s 148 & has also sustained the additions made by AO.
Before the Tribunal, Assessee challenged the assumption of jurisdiction by the AO u/s 148 on the ground that the AO has violated the procedure as laid down by the Hon’ble Supreme Court in the case of GKN Drive Shaft reported in 259 ITR 19 & hence the entire proceedings are void-ab-initio. Assessee further pointed out that perusal of the assessment order would show that the AO has disposed of the objection of Assessee on 23.2.2021. However, the fact of the matter is that Assessee has filed its objection on 1.3.2022. Therefore, it is not possible for the AO would have decided the objections even before the filing of the same.
