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2017 (6) TMI 86 - HC - Income TaxReopening of assessment - Whether the tribunal could have permitted addition of a new ground assailing notice under Section 148 of the Act when there was no challenge to it before the Assessing Officer or the CIT (Appeals) by way of any objections? - Held that:- Consedering the amplitude of power of the tribunal as per Section 245 of the Act, as the facts were not in dispute and were clear, the tribunal had committed no jurisdictional error in entertaining the additional ground assailing the notice issued under Section 148 of the Act. Accordingly, question no. 1 as above is answered in favour of the assessee and against the department holding that despite no plea regarding the validity of the notice having been taken by the respondent assessee before the Assessing Officer and the CIT (appeals) but as his objections against the notice were left undetermined, the tribunal was justified in permitting the said ground to be taken for the first time in appeal before it. Whether the tribunal is justified in setting aside the assessment order as confirmed by the Commissioner of Income Tax, Appeals holding the notice to be bad and assessment illegal only for the reason that the objections to the notice were not decided? - Held that:- The non disposal of the objections vitiates the reassessment proceedings. However, it can not be a ground for invalidating the notice itself unless any lacuna in the notice is established which we are afraid, has not been done by the tribunal. Accordingly, the proceedings for reassessment may stand vitiated but the notice can not held to be bad in law. There is no finding by the tribunal for holding the notice to be bad or illegal except for the fact that the objections of assessee filed against it were not decided. In view of the fact that the objections were not considered and decided and that no illegality in the notice was established, the tribunal erred in holding the notice to be bad. The discussion above permits us to answer the second question partly in favour of the assessee and partly in favour of revenue and it is held that as the objections of the assessee respondent were left undecided the reassessment could not have been done and as such the tribunal has not erred in setting aside the order of assessment but the notice issued under Section 148 of the Act can not be said to be illegal and bad in law without recording finding that it is contrary to law. This aspect has to be dealt with by the tribunal before passing a fresh order of reassessment.
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