Nisha Dudheria Vs ITO (ITAT Bangalore)
Reasons Were Supplied, Objections Were Ignored: Reassessment u/ss 147/148 & ₹1.67-Crore Addition u/s 68 Quashed for Breaching GKN Driveshafts—Bangalore ITAT
Summary: The Bangalore ITAT quashed reassessment proceedings resulting in an addition of ₹1.67 crore u/s 68, holding that the AO had failed to dispose of the assessee’s objections to reopening through a separate speaking order before completing reassessment. Following GKN Driveshafts (India) Ltd. & the binding Karnataka High Court ruling in Hewlett Packard Financial Services (India) Pvt. Ltd., the Tribunal held that this procedural requirement was mandatory & its breach vitiated the reassessment itself.
Reopening Based on Alleged Long-Term Capital Gain
The assessee was an individual earning salary & business income. She filed her original return on 31.08.2015, declaring total income of ₹19,91,870. The return was processed u/s 143(1).
Based upon information received from the Investigation Wing, the AO formed the view that the assessee had earned long-term capital gain from transactions in shares of certain companies. Notice u/s 148 was accordingly issued on 31.03.2018.
By letter dated 20.04.2018, the assessee requested that her original return be treated as the return filed in response to the notice u/s 148. She sought the recorded reasons for reopening on 07.05.2018, which were supplied on the following day.
