INCOME TAX ACT 1961

Section 147

Reassessment - Validity - No finding of escapement of income -

Assessee filed appeal against reopening of assessment on the ground that a mere reading of the reasons would show that there was no escapement of income as contemplated in the notice issued under section 148. Further, the reasons recorded only indicate reopening of assessment for verification of certain transactions. Held: Assessee had raised a specific objection that the proposal for reopening of the assessment was liable to be dropped, since there was no finding that there was escapement of income. It was further contended that for the purpose of carrying on verification exercise, reopening cannot be ordered. Though such specific contention was raised, instead of dealing with the same, by passing a speaking order, AO chose to merely inform the assessee that the proceedings had been initiated only with the approval of the jurisdictional Joint CIT. Contentions raised by the assessee were not dealt at all. In GKN Driveshafts v. ITO [(2003) 259 ITR 19 (SC) : 2003 TaxPub(DT) 0734 (SC)], it is specifically held that AO is bound to dispose of the assessee's objections by passing a speaking order. In as much as this requirement of law as laid down had not been complied with, AO was directed to dispose of assessee's objections by passing a speaking order.

Followed:GKN Driveshafts v. ITO [(2003) 259 ITR 19 (SC) : 2003 TaxPub(DT) 0734 (SC)]

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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