|CORAM:||H. S. Sidhu (JM), O. P. Kant (AM)|
|CATCH WORDS:||reasons, Reassessment, Reopening|
|DATE:||June 3, 2016 (Date of pronouncement)|
|DATE:||June 13, 2016 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 147/ 148: The AO is duty bound to provide to the assessee the reasons recorded for reopening the assessment within a reasonable time. Failure to do so renders the reassessment order unsustainable in law|
The Hon’ble Apex Court in GKN Driveshafts (India) Ltd. vs. ITO 259 ITR 19 (2003) has held that “it is clear that the completion of assessment/ reassessment without furnishing the reasons recorded by the AO for initiation of proceedings under section 147/148 of the Act is not sustainable in law as it is incumbent on the AO to supply them within reasonable time. We note that on the anvil of this judgment, on the request of the Assessee, the AO is bound to furnish the reasons recorded for initiation of proceedings under section 147 of the Act within a reasonable period of time so that the assessee could file its objections thereto and the AO was to dispose of the same by passing a speaking order thereon, which the AO has not done. We also note that even as per the rules of natural justice, the assessee is entitled to know the reasons on the basis of which the AO has formed an opinion that income assessable to tax has escaped assessment. The furnishing of reasons to the assessee is to enable/facilitate it to present its defence and objections to the initiation of proceedings under section 147/148 of the Act. Therefore, we are of the considered opinion that there was no justifiable reasons for the AO to deprive the assessee of the recorded reasons by him for initiating proceedings under section 147/148 of the Act. Therefore, in our considered opinion, the reopening in question is not sustainable in the eyes of law. Accordingly, we allow the assessee’s appeal on legality aspect without proceeding to adjudicate on merits by quashing the assessment order.
Judgements referred/ followed:
– Hon’ble Bombay High Court in the case of CIT vs. Trend Electronics 2015-TIOL-2393-HC-Mum.
– Hon’ble Bombay High Court in the case of CIT vs. Videsh Sanchar Nigam Ltd. 340 ITR 66 (Bom.)
– Decision of the Third Member Bench of ITAT in the case of Telco Dadajee Dhackjee Ltd. VS. DCIT 2(3) 2012 TIOL-532-ITAT-MUM-TM.
– Decision of the Coordinate Bench of Bangalore ITAT in the case of M/s Synopsys International vs. DDIT (Int. Taxation) dated 10.12.2012 in ITA No. 549/Bang/11.
– Decision of Coordinate Bench of Chennai ITAT in the case of G. Munuswamy vs. ACIT in ITA No. 242/Mds/2013 dated 5.7.2013.
– Recent decision of Coordinate Bench of Ranchi ITAT in the case of Sh. Sunil Kumar vs. DCIT 2015-TIOL-1929-ITAT-Ranchi.
– Decision of Coordinate Bench of Hyderabad ITAT in the case of S. Prasad Raju Vs. DCIT 96 TTJ 832.