{"id":5119,"date":"2012-06-29T21:06:56","date_gmt":"2012-06-29T21:06:56","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=5119"},"modified":"2012-06-29T21:06:56","modified_gmt":"2012-06-29T21:06:56","slug":"tata-international-ltd-vs-dcit-itat-mumbai-s-147-non-supply-of-recorded-reasons-before-passing-reassessment-order-renders-the-reopening-void-subsequent-supply-does-not-validate-reassessment-order","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/tata-international-ltd-vs-dcit-itat-mumbai-s-147-non-supply-of-recorded-reasons-before-passing-reassessment-order-renders-the-reopening-void-subsequent-supply-does-not-validate-reassessment-order\/","title":{"rendered":"Tata International Ltd vs. DCIT (ITAT Mumbai)"},"content":{"rendered":"\n\n
Click here to download the judgement (Tata_International_147_late_furnishing_reasons.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nS. 147: Non-supply of recorded reasons before<\/em> passing reassessment order renders the reopening void. Subsequent supply does not<\/em> validate reassessment order
\n<\/strong><\/p>\n

After completing the s. 143(3) assessment, the AO received information from the Volcker Committee report that the assessee had paid “illegal<\/em>” commission for supply of goods to Iraq under the “Oil for Food Programme” of the UN. The AO issued a s. 148 notice to disallow the commission and supplied the assessee with only the “gist” of the recorded reasons<\/em>. The complete recorded reasons were furnished only after the passing of the reassessment order<\/em>. In the reassessment order, the AO disallowed the commission. The CIT (A) upheld the reassessment. On appeal by the assessee to the Tribunal, HELD allowing the appeal:<\/p>\n

As per GKN Driveshafts<\/strong> 259 ITR 19 (SC) and the rules of natural justice, the AO was bound to furnish reasons within a reasonable time so that the assessee could file objections against the same. The adherence to this procedure is a necessity<\/strong> because at the preliminary stage itself, the AO may be satisfied with the explanation of the assessee. A reassessment completed without furnishing the reasons actually recorded by the AO for reopening of assessment is not sustainable in law. The subsequent supply<\/em> of the reasons would not make good of the illegality suffered at the stage of reopening of the assessment<\/strong>. On facts, though the assessee asked for the recorded reasons, the same was supplied to him only after<\/strong> the passing of the reassessment order. This failure on the part of the AO renders the reassessment order invalid (Fomento Resorts<\/strong> & Videsh Sanchar Nigam<\/strong> 340 ITR 66 (Bom) (SLP dismissed) followed (included in file<\/em>)).<\/p><\/blockquote>\n

\nContrast with A. G. Holdings<\/a><\/strong> (Del HC). For the merits of whether a “bribe<\/em>” for the “Iraq Oil Scam<\/em>” can be allowed see Rajrani Exports<\/a><\/strong> (ITAT Kol)\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

As per GKN Driveshafts<\/strong> 259 ITR 19 (SC) and the rules of natural justice, the AO was bound to furnish reasons within a reasonable time so that the assessee could file objections against the same. The adherence to this procedure is a necessity because at the preliminary stage itself, the AO may be satisfied with the explanation of the assessee. A reassessment completed without furnishing the reasons actually recorded by the AO for reopening of assessment is not sustainable in law. The subsequent supply<\/em> of the reasons would not make good of the illegality suffered at the stage of reopening of the assessment<\/strong>. On facts, though the assessee asked for the recorded reasons, the same was supplied to him only after<\/strong> the passing of the reassessment order. This failure on the part of the AO renders the reassessment order invalid (Fomento Resorts<\/strong> & Videsh Sanchar Nigam<\/strong> 340 ITR 66 (Bom) (SLP dismissed) followed (included in file<\/em>))<\/p>\n

Read more ›<\/a><\/div>\n

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