Combine Diamonds (P.) Ltd. v. ACIT : Initiating assessment before furnishing recorded reasons and denying the opportunity to file objections renders the reassessment void ab initio.

51. [2026] 137 ITR(T) 129 (Mumbai - Trib.)

Combine Diamonds (P.) Ltd. v. ACIT

A.Y.: 2009-10 DATE: 11.03.2026

Sec. 68 r.w.s. 147 and 148 - Assessee requested recorded reasons after notice under section 148 – Assessing Officer issued notice under section 142(1) before furnishing reasons and, on furnishing reasons, simultaneously issued notices under sections 142(1) and 143(2) without giving reasonable opportunity to file objections – Whether non-compliance with procedure laid down by Supreme Court in GKN Driveshafts (India) Ltd. v. ITO renders reopening and consequential assessment void ab initio – Held, yes

FACTS

The assessee filed its return of income declaring total income of Rs. 68.43 lakhs, which was assessed under section 143(3). Subsequently, a notice under section 148 dated 23.03.2016 was issued to reopen the assessment on the basis of information regarding alleged hawala transactions and bogus purchases.

In response to the notice under section 148, the assessee requested that the original return be treated as the return filed in response to the notice and, by letters dated 04.04.2016 and 21.05.2016, sought the reasons recorded fo