Objections disposed off without passing a separate order is contrary to law- ITAT Delhi
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Case Details: |
Admach Auto Limited vs. DCIT |
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Appeal No.: |
ITA No. 9543/DEL/2019 |
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Order pronounced by: |
ITAT Delhi |
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Date of Order: |
18-12-2020 |
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In Favour of: |
Assessee |
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Assessment Year: |
A.Y. 2009-10 |
Brief Facts:
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A survey was conducted at the business premises of the assessee on 18.02.2009. The A.O. issued notice u/s 148 dated 11.03.2016, after recording the reasons u/s 147 of the Act. The A.O. was of the view that the assessee company has taken accommodation entry in the shape of share capital and share premium from the dummy companies and added to the returned income of the assessee u/s 68 of the Income Tax Act. Aggrieved with the same, the assessee filed the appeal before the Ld. CIT(A) who dismissed the appeal filed by the assessee. The assessee preferred a further appeal before the Tribunal. |
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During the hearing, the Ld. Counsel for the assessee argued that the A.O. has completed the assessment in violation of the principle of natural justice. He submitted that the reasons recorded by the A.O. are without application of mind which deserve to be canceled. He further argued that the assessee filed the objections before the A.O. after receiving the notice from the A.O. which was not disposed of by separate order and has been disposed of in a consolidated assessment order which is patently invalid and without application of mind and it is sufficient reason to quash the reopening. In support of his contention, he relied upon the order of the Hon’ble Apex Court in the case of GKN Driveshaft 259 ITR 19. |
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Lastly, he argued that the revenue authorities have passed the impugned order in violation of the principle of natural justice as no back material is offered for cross-examination of the assessee during the assessment proceedings made in this regard which is sufficient to strike down. |
Observations of the Tribunal:
- We have gone through the objections filed by the assessee before the A.O. in which the assessee has specifically objected to the initiation of proceedings u/s 148 of the Act which is without jurisdiction, time-barred and bad in law.
- We have also perused the assessment order and we find that the A.O. has disposed of the objections in the assessment order without passing a separate order which is contrary to law and deserve to be canceled on this count, in view of the decision of the Hon’ble Apex Court in the case of GKN Driveshaft 259 ITR 19, which has been followed by various Benches of the ITAT, Delhi.
- The Ld. Counsel for the assessee has quoted one such case in ITA No. 7372/Del/2019 (AY 2011-12) & Ors. in the case of Smt. Meena Gupta vs. ITO, Faridabad & Ors.
Ruling:
- After going through the aforesaid order of the ITAT, Delhi Bench, we are of the view that there is a force in the arguments advanced by the Ld. Counsel for the assessee on the issue of disposal of objections in the assessment order in not passing a separate order for disposing of the objections of the assessee, which is a clear violation of the law laid down by the Hon’ble Apex Court in the case of GKN Driveshaft (supra).
- Secondly, in the reasons, the A.O. has recorded that the assessee has obtained the accommodation entry of Rs. 60 Lacs in the name of 6 dummy/ paper companies during the year under consideration, but finally made the addition of Rs. 50 lacs in the assessment order which shows that the A.O. has not applied his mind before recording the reasons in issuing the notice u/s 148 of the Act. Therefore, the addition in dispute deserves to be canceled. In the result, the assessee’s appeal is allowed.
Read complete order: M/s Admach Auto Limited vs. DCIT
Disclaimer: The article is based upon the judgment of ITAT Delhi and is meant for informative purposes only. Readers are requested to act diligently and under consultation with the professional before applying the information contained in this article.
