The Income Tax Appellate Tribunal (ITAT), Bangalore bench has held that the non-disposal of objections filed by the assessee would result in nullifying the assessment proceedings under the Income Tax Act, 1961.
The assessee, a contractor, filed the return of income for the year under consideration declaring the total income of Rs.4,98,540/- on 10.3.2012. Subsequently, a survey operation under section 133A of the Income Tax Act, 1961 was conducted in the business premises of the assessee on 4.10.2012. It was noticed that the assessee has declared business income under section 44AD of the Act in the original return of income filed by the assessee. During the course of the survey operation, THE AO reopened the assessment holding that the assessee has made an investment in M/s. Venkateshwara Hotel Project at Mogarahalli. However, the said investment was neither reflected nor explained in the original return of income.
Before the Tribunal, the assessee contended that the assessment order was confirmed without disposing of the objections raised by him before the income tax department.
The Tribunal bench comprising Judicial Member Pawan Kumar Gadale and Accountant Member Shamim Yahya relied on the decisions rendered by the jurisdictional High Court in the case of Deepak Extrusions Pvt. Ltd and the co-ordinate bench in the case of Shri Lakshmana and held that “non-disposal of objections filed by the assessee before the completion of the assessment is against the procedure prescribed by Hon’ble Supreme Court in the case of GKN Driveshafts (P) Ltd (supra). Hence the same will vitiate the impugned assessment order. Accordingly, the same is liable to be quashed. We order accordingly. Since the assessment order itself is quashed, there is no necessity to deal with the grounds urged by the revenue.”
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