ITO Vs Rajesh Gupta (ITAT Delhi)
Objections Not Disposed = Reopening Void: ITAT Delhi Affirms CIT(A), Quashes 147 Assessment
In this Revenue appeal for AY 2012-13, the sole grievance was that CIT(A) had quashed reassessment u/s 147 r.w.s. 143(3) on the ground that the Assessing Officer failed to dispose of Assessee’s objections to reopening as mandated by the Supreme Court in GKN Driveshafts (259 ITR 19). Revenue argued that AO had in fact disposed of objections through a letter dated 05.09.2018.
Tribunal examined the letter & held that it did not deal with any of the objections; it merely restated reasons already supplied & directed the Assessee to explain cash deposits. Thus, the AO never passed a separate, reasoned, speaking order, which is a mandatory jurisdictional requirement under GKN Driveshafts.
Tribunal relied on a detailed earlier decision in ITO vs. Hardeep Singh (ITA 1152/Del/2020, 27.12.2024), which held that failure to pass a speaking order on objections is not a mere procedural lapse but a jurisdictional defect fatal to reassessment. ITAT reaffirmed the principles laid down by Delhi HC in Ferrous Infrastructure, Bombay HC in KSS Petron, & Madras HC in Penta four Software Employees’ Welfare Foundation, all holding that compliance with GKN procedure is mandatory; violation renders the reassessment without jurisdiction.
Tribunal also clarified that dismissal of SLP in Home Finders Housing does not create binding precedent, as SLP was dismissed in limine.
Applying the settled law, ITAT held that reassessment was invalid; therefore, Revenue’s appeal lacked merit. All other issues became academic. Revenue’s appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
