Ashish Gems Vs ACIT (ITAT Mumbai)
Mumbai ITAT: Reassessment Quashed for Failure to Pass Separate Speaking Order on Objections to Reopening
The Mumbai ITAT quashed the reassessment proceedings, holding that the Assessing Officer’s failure to dispose of the assessee’s objections to the recorded reasons for reopening by a separate speaking order vitiated the entire reassessment. Although the assessee had filed detailed objections against the notice issued under section 148, the Assessing Officer proceeded to complete the reassessment under sections 147/143(3) and made an addition of ₹2.39 crore under section 69C without first deciding those objections.
The Tribunal reiterated that the procedure laid down by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO is mandatory. Once objections to the reopening are filed, the Assessing Officer must dispose of them by a separate speaking order before proceeding with the reassessment. Merely referring to or dealing with the objections in the assessment proceedings or assessment order is not sufficient compliance.
Following the decisions of the Bombay High Court in KSS Petron Pvt. Ltd. and the Madras High Court in Jayanthi Natarajan, the Tribunal held that such a procedural lapse goes to the root of the Assessing Officer’s jurisdiction and cannot be cured by restoring the matter for fresh adjudication. Accordingly, the reassessment order was quashed, and the Tribunal declined to examine the additions on merits as they had become purely academic.
