Indus Valley Promoters Ltd. Vs DCIT (ITAT Delhi)
Mechanical Reopening – No Reasons, No Reassessment- Blank 148A(d) Order Invalidates Reassessment: ITAT Delhi -Speaking Order Mandatory: ITAT Cancels 147 Action Based on Blank 148A(d) Order
Delhi Tribunal was seized with the validity of reassessment proceedings initiated u/s 147 for A.Y. 2018-19.
Assessee had originally filed its return declaring income of ₹4.92 crores which was processed u/s 143(1). Later, AO reopened the assessment on the ground that Assessee had received ₹2.20 crores as accommodation entries from shell companies. AO completed reassessment u/s 147/144B making addition of ₹2.20 crores u/s 68 & ₹3.30 lakhs u/s 69. NFAC confirmed the additions.
Before Tribunal, Assessee challenged the very jurisdiction of reopening by pointing out that the order u/s 148A(d), which is mandatory before issuing notice u/s 148, was issued on a blank paper without recording any reasons. Thus, the statutory requirement of providing reasons & disposing objections by a speaking order was completely violated.
Tribunal observed that Sec. 148A(d) casts a mandatory obligation on AO to pass a reasoned order after considering assessee’s reply. In this case, the AO had merely uploaded a blank document without any reasons. Such mechanical action amounted to total non-compliance of statutory provisions. Tribunal held that when the foundation itself is void, the consequent reassessment proceedings are invalid.
