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TMI Blog2017 (8) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... ue No. 328638 dated 17.05.2000 from Shri Sanjay Mohan Aggarwal in the garb of gift. Accordingly, after recording reasons and obtaining prior approval of Addl. CIT, Range-29, New Delhi the A.O issued notice u/s 148 of the I.T. Act, 1961 to the assessee on 31.03.2008. The assessee, in response to the same, filed a letter stating that original return filed on 17.10.2001 may be treated as return filed in response to notice u/s 148 of the Act. The assessee also requested to supply a copy of reasons recorded for reopening of the case. The A.O supplied such reasons to the assessee vide letter dated 28.7.2008. 3. Subsequently, in response to notice u/s 143(2) of the Act, the assessee appeared before the A.O and filed certain details such as memorandum of gift, affidavit and photocopy of cheque through which gift was routed and copy of bank statement of the assessee. The A.O also obtained bank statement of the donor Shri Sanjay Mohan Aggarwal from Vijaya Bank, Ansari Road, New Delhi through summons u/s 131 of the Act dated 21.11.2008 for the period from 01.04.2000 to 31.03.2001. The said statement showed regular cash deposits as well as transfer entries of the said amount immediately trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act was also challenged on the ground that the A.O has not disposed off the objections raised by the assessee against the issue of notice u/s 148 of the Act. 7. However, the ld. CIT(A) was also not satisfied with the arguments advanced by the assessee and upheld the action of the A.O in making the addition of Rs. 5 lakhs u/s 68 of the Act. He also rejected the ground raised by the assessee challenging the validity of reassessment proceedings in absence of non disposal of objections raised by the assessee. 8. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before us with the following grounds: "1. That on the facts of the case and under the law, the initiation of proceedings u/s 147 / issuance of notice u/s 148, was arbitrary, unjust & illegal. The authorities below have failed to appreciate the provisions of law / the law laid down by the Hon'ble Courts. 2. That on the facts of the case and under the law, the Id. CIT(A) has erred in not quashing the reassessment proceedings / reassessment order, particularly when the Id. A.O. has failed to discharge his obligation, to dispose of the objections filed by the assessee, by passing a speaking order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the A.O must apply his mind to the materials and conclude that he has reason to believe that income of the assessee has escaped assessment. Unless that basic jurisdictional requirement is satisfied a post mortem exercise of analyzing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. He submitted that the A.O, in the instant case, has not applied his mind and he has proceeded on the basis of letter of the Addl. DIT [INV] only and therefore, on this count also, reassessment proceedings are liable to be quashed. 11. So far as the merits of the case are concerned, the ld. AR referring to various pages of the paper book, submitted that the assessee has filed relevant details, such as, copy of gift deed, photocopy of affidavit of Shri Sanjay Mohan Aggarwal dated 29.04.2000, photocopy of bank statement of assessee with Vijaya Bank reflecting the credit entry of Rs. 5 lakhs and account of the assessee evidencing the receipt of cheque. The assessee has also filed photocopy of the passport of Shri Sanjay Mohan Aggarwal reflecting his residential address as 4674, Shora Kothi, Pahar Ganj, New Delhi. He has also filed copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble High Court in the case of Smt. Kamlesh Sharma Vs. B.L. Meena, ITO & Ors reported at 287 ITR 337 [Del] submitted that he has no objection if the matter is restored to the file of the A.O with the direction to give an opportunity to the A.O to dispose of the objections filed by the assessee by passing a speaking order. 16. The ld. AR has, in his rejoinder, submitted that the Hon'ble Delhi High Court in subsequent decisions has held that if the A.O does not dispose of the objections raised by the assessee on the reopening of the assessment, then consequent assessment order has to be quashed. He submitted that the subsequent decision of the Hon'ble High Court will prevail over the earlier decision. 17. We have considered the rival arguments made by both the sides, perused the orders of the A.O and the ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions relied upon by both the sides. We find since the assessee in the instant case has shown to have received gift of Rs. 5 lakhs from one Shri Sanjay Mohan Aggarwal. The A.O, on the basis of specific information received from the Addl DIT [INV] Ghaziabad, v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by the learned counsel for the petitioners also deserves some consideration. In GKN Driveshafts (supra), the Supreme Court had directed as under:- "However, we clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the above said five assessment years." (underlining added) On going through the same, it is evident that the Assessing Officer has to pass a speaking order disposing of the objections "before proceeding with the assessment". In the present case, a separate speaking order has not been passed and the objections have been dealt with, if at all, in the re-ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g order, therefore, such reassessment order is liable to be quashed. So far as the argument of the ld. DR that the matter should be restored to the file of the A.O with the direction to dispose of the objections raised by passing a speaking order, in the light of the decision of the Hon'ble High Court of Delhi in the case of Smt Kamlesh Sharma [supra] and that the assessment order need not be quashed is concerned, we do not find any merit in the same since the later decision of the Hon'ble High Court will prevail over the previous decision. Since various decisions relied upon by the ld. AR on this issue are subsequent to the decision of the Hon'ble High Court of Delhi in the case of Smt. Kamlesh Sharma [supra], therefore, we are of the considered opinion that the later decision of the Hon'ble High Court will prevail. We, therefore, hold that since the A.O has not disposed of the legal objections raised by the assessee for such reopening of assessment u/s 148 of the Act by passing a speaking order before completion of assessment, therefore, such consequent order passed by the A.O is void and illegal and therefore, is liable to be quashed. Since the assessee succeeds ..... X X X X Extracts X X X X X X X X Extracts X X X X
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