The Income Tax Appellate Tribunal (ITAT), Delhi Bench held that the Order passed without disposing objections makes assessment void.
A Notice under Section 148 of the Income Tax Act, 1961 was issued to the assessee company, Duggal Estates Pvt. Ltd. to assess the income for the year under consideration. The company submitted that the ITR filed under section 139 may be treated as ITR in response to Section 148 of the Act and filed the copy of ITR as well as the computation. The assessee also filed a copy of audited balance sheet for the year 2008-09 along with notes to accounts which was also submitted before the Assessing Officer.
The assessee requested for the copy of reasons recorded along with satisfaction / permission of Pr. CIT as mentioned in the referred notice. Further the inspection of the file was requested vide letter by the assessee. The assessee was provided with the copy of reasons along with a form for getting approval from Pr. CIT-Faridabad. After inspecting the file, the assessee requested for the copy of a letter from the office of ADIT (Investigation), Faridabad which was not provided to the assessee.
The assessee field objections which were quashed by a speaking order except that the same was dealt in the assessment order which the assessee submitted that the same is against the procedures laid by the Apex Court in the case of GKN Driveshaft 2002. After various submissions to the notices issued and complied with, the Assessing Officer made an addition of Rs. 1,00,00,000/- to the income of the assessee under Section 68 of the Act.
The assessee contended that there are three aspects of jurisdictional issues involved in the present appeal. Firstly, that of non-disposal of objections by separate speaking order, secondly, that of reasons recorded solely based on borrowed satisfaction and thirdly, that of approval of higher authority is arbitrarily and mechanically given.
On the other hand, the department submitted that the reasons recorded were proper and as per the provisions of the Income Tax Act, 1961. The approval and the satisfaction of the competent authority is as per the law prescribed by the Income Tax statute. Thus, the assessment order was just and proper and the same cannot be called as nullity. There is only procedural lapse and the same will not make assessment null and void.
The Coram of N.K.Billaiya and Suchitra Kamble held that the assessment becomes a nullity and does not survive as the Assessing Officer has not passed a speaking order of disposal of the objections filed by the assessee. The assessment also becomes void-ab-initio as the reasons recorded are also not in consonance with the actual escapement of the income of the assessee. Thus, the assessment order itself is null and void-ab-initio as the reassessment proceedings become invalid.
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