Pr. CIT v. Sagar Developers

INCOME TAX ACT, 1961

--Reassessment--Validity ofOrder passed before considering assessee's objection----Breach of principles of natural justice would ordinarily not result in terminating the proceedings permanently, therefore, to declare the order of assessment illegal and to permanently prevent AO from passing any fresh order of assessment, merely on the ground that he did not dispose of assessee's objections before passing of such order was not justified and AO was, therefore, directed to frame fresh assessment after first disposing of objections of the assessees.--Issue arose for adjudication was whether Tribunal was justified in setting aside order of reassessment on the ground that before passing such order, AO had not disposed of objections of the assessee Held: Whenever an administrative action is found to be tainted with defect in the nature of breach of natural justice or the like, the Court would set aside the order, place back the proceedings at the stage where the defect is detected and leave the liberty to competent authority to proceed further from such stage after having the defect rectified. In other words, the breach of principle of natural justice would ordinarily not result in terminating the proceedings permanently. Therefore, to declare the order of assessment illegal and to permanently prevent AO from passing any fresh order of assessment, merely on the ground that he did not dispose of assessee's objections before passing of such order was not justified. Hence, AO was directed to frame fresh assessment after first disposing of objections of the assessees.