INCOME TAX ACT, 1961

Section 37(1)

Reassessment - Validity - Pending conclusion of first reassessment proceedings, fresh reassessment proceedings were initiated -

There are two notices under section 148 available on assessment records. The first notice was dated 20-3-2014 for which prior approval of competent authority was obtained on 20-3-2014 in respect of the reasons so recorded by AO on 10-3-2014. The second notice under section 148 was dated 28-3-2014 after seeking prior approval of the competent authority on 27-3-2014 in respect of the reasons so recorded by AO on 24-3-2014. Both the notices under section 148 were served on the assessee and assessee in turn responded to these two notices individually vide his letter of even date 21-1-2015 and filed his objections to the reasons so recorded by AO. Assessee challenged the notice under section 148 dated 28-3-2014 and the underlying reasons recorded by AO dated 24-2-2014, on account of non-disposing off objections raised by assessee before AO vide his Letter, dated 21-1-2015. Held: Assessee has raised specific objection against initiation of first reassessment proceedings vide its Letter, dated 21-1-2015 and has requested to drop such proceedings as he had not made any investment in the property so specified by AO, the particulars of which was mentioned in the reasons dated 10-3-2014. There was nothing on record that AO had disposed off the objections so raised by the assessee and dropped the first reassessment proceedings either by way of passing a specific order or even by way of any noting in the order sheet and in absence thereof, it could not therefore, be presumed that such proceedings had been concluded by AO. The fact that AO issued a fresh notice under section 148 basis fresh reasons could not by implication be read and held as conclusion of first reassessment proceedings. Therefore, it was a case where pending conclusion of first reassessment proceedings, fresh reassessment proceedings were initiated, which could not be sustained in the eyes of law and on this reason alone, reassessment proceedings initiated by way of notice under section 148 dated 28-3-2014 were vitiated and same deserved to be set aside.

Relied:GKN Driveshafts India Ltd. v. ITO (2003) 259 ITR 19 (SC) : 2003 TaxPub(DT) 734 (SC) and K.C. Mercantile Ltd. v. Dy. CIT (ITA No. 292/2016) (Raj.).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08

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