{"id":3176,"date":"2020-07-06T09:40:17","date_gmt":"2020-07-06T04:10:17","guid":{"rendered":"http:\/\/www.itatonline.org\/articles_new\/?p=3176"},"modified":"2020-07-06T09:40:47","modified_gmt":"2020-07-06T04:10:47","slug":"a-comprehensive-guide-to-the-law-of-reopening-of-assessments-under-sections-147-to-153-of-the-income-tax-act-1961","status":"publish","type":"post","link":"https:\/\/itatonline.org\/articles_new\/a-comprehensive-guide-to-the-law-of-reopening-of-assessments-under-sections-147-to-153-of-the-income-tax-act-1961\/","title":{"rendered":"A Comprehensive Guide To The law Of Reopening Of Assessments Under Sections 147 To 153 Of The Income-tax Act, 1961 (Updated: July 2020)"},"content":{"rendered":"

\"\"Advocate Ajay Singh has conducted a meticulous assessment of the entire law in sections 147 to 153 of the Income-tax Act relating to the reopening of assessments. He has explained the entire procedure in a systematic manner and also cited all the important judgements on the issue. The Guide is an imperative read for all taxpayers and professionals. The law is updated as of July 2020<\/em><\/strong><\/p>\n

Link to download this article in pdf format is at the bottom<\/a><\/span><\/div>\n<\/p>\n

The scope and effect of a reopening of assessment is still shrouded in mystery even after various judgments of the Supreme Court and High courts. Reassessment is one of the distinguishing weapons in the armoury of the Department, empowers the Assessing Officer to assess, reassess or recompute income, turnover etc,  which has escaped assessment. A number of intricate issues crop up during the reassessment proceedings. Inspite of various guidelines laid down by courts, dept constantly prefer to disobey the same leading to quashing of the notice . It  seems dept  claim as a matter of right to reopen the assessments without appreciating the real intend or purpose behind enacting such provision . Assessment orders are not a scrap of paper which can be overturned by reopening the assessment in casual manner. Finality to assessment must be recognized as matter of principle and reopening should be an exception.   Similarly we see assessment are completed merely based on information received from various investigation department without application of mind by the Assessing officer  . Some of the issues are been dealt with here under:  <\/p>\n

<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Sr.No<\/strong><\/td>\nParticular<\/strong><\/td>\nPara. No.<\/strong><\/td>\n<\/tr>\n
 <\/td>\nIntroduction<\/td>\n <\/td>\n<\/tr>\n
1.<\/td>\nPreconditions<\/a><\/td>\n1.1-1.2<\/td>\n<\/tr>\n
2. <\/p>\n<\/td>\nProcedure to challenge the reassessment proceeding<\/a><\/td>\n2.1-2.3<\/td>\n<\/tr>\n
3.<\/p>\n<\/td>\nAlternative Remedy not a Bar to entertain a Writ<\/a><\/td>\n3.1-3.5<\/td>\n<\/tr>\n
4. <\/p>\n<\/td>\nReasons – Recorded to be Supplied – Communication of Reasons – Mandatory. Not giving copy of complete Reasons – Assessment Records not Traceable.- Manipulation of the record<\/strong><\/em><\/span>
\n <\/a><\/td>\n		4.1-4.8<\/td>\n<\/tr>\n
5. <\/p>\n<\/td>\nNew Reasons cannot be allowed to be introduced or supplied. Deficiency in reasons recorded cannot be rectified in affidavit – Court cannot allow the AO to improve upon the reasons<\/em>
\n <\/a><\/td>\n		5.1-5.10<\/td>\n<\/tr>\n
6. <\/p>\n<\/td>\nSucceeding Assessing Officer cannot improve upon the reasons which were originally communicated to the Assessee. <\/a><\/td>\n6.1<\/td>\n<\/tr>\n
7.<\/p>\n<\/td>\nReopening is not Permissible on borrowed satisfaction of another Assessing Officer.<\/a><\/td>\n7.1-7.5<\/td>\n<\/tr>\n
8.<\/p>\n<\/td>\nAssessee  can file his objections\/reply to the reasons recorded for reopening – Disposal of  Assessee Objection and Serve the Order on Assessee
\n Time limit  of four weeks set out to proceed with assessment..<\/em> <\/a><\/td>\n		8.1-8.9<\/td>\n<\/tr>\n
9.<\/p>\n<\/td>\nDisposal of Objection – To be linked with recorded reasons. Rejection of Objection without Assigning Reasons \/ passing a speaking order.<\/em><\/span><\/p>\n

Rejection of Objection without elucidating and dealing with the contentions and issues raised in the objection.<\/em> <\/a><\/td>\n

9.1-9.9<\/td>\n<\/tr>\n
10.<\/p>\n<\/td>\nIrrelevant and non existing Reasons: Vague and General Reasons not Permissible Reasons – <\/a><\/td>\n10.1- 10.2<\/td>\n<\/tr>\n
11.<\/p>\n<\/td>\nReasons recorded for Reopening of the assessment based on factual error <\/a><\/td>\n11.1-11.3<\/td>\n<\/tr>\n
12.<\/p>\n<\/td>\nReassessment merely on the basis of report from Investigation Wing.<\/p>\n

Information Received from Investigation Wing: Bogus Purchase: Accommodation Entries: Penny Stock.- <\/em><\/span>Case u\/s.  143(1):<\/em>
\n  Decisions in favour of Revenue – upholding reopening .<\/em><\/span>
\n <\/a><\/td>\n

12.1-12-22<\/td>\n<\/tr>\n
13.<\/p>\n<\/td>\nReopening – Client Code Modification.<\/em><\/a><\/td>\n13.1-13.2<\/td>\n<\/tr>\n
14. <\/td>\nAmendments made By Finance Act 2016.<\/em><\/a><\/td>\n14.1<\/td>\n<\/tr>\n
15. <\/p>\n<\/td>\nStatement of third\/ unconnected person.<\/em>
\n – <\/em>Statement recorded by Police Officer –             
\n -Statement of partner<\/em><\/a><\/td>\n		15.1-15.6<\/td>\n<\/tr>\n
16. <\/p>\n<\/td>\nIncriminating material found in search of Third Party: 153C vis a vis 148 of the Act .<\/a><\/td>\n16.1-16.3<\/td>\n<\/tr>\n
17. <\/p>\n<\/td>\nInformation from foreign  Tax Authority <\/a><\/td>\n17.1<\/td>\n<\/tr>\n
18. <\/p>\n<\/td>\nReason to believe of the AO<\/p>\n

Reason to believe that income has escaped assessment on basis of the material<\/em><\/span>
\n Information received from another AO <\/em><\/span><\/p>\n

Reasons to believe – Survey :<\/em><\/p>\n

Finding in case of another assessee<\/em><\/span>
\n <\/a><\/td>\n

18.1 – 18.10<\/td>\n<\/tr>\n
19. <\/p>\n<\/td>\nProcedural Defect: Issue and Service of Notice etc. : S. 292BB<\/p>\n

notice u\/s. 148 to be  served .<\/em><\/span>
\n Issue of notice beyond limitation period<\/em><\/span>
\n Notice issued within period of limitation but send after that period<\/em><\/span>
\n Notice issued to individual. His HUF cannot be assessed<\/em><\/span>
\n Service of notice on accountant of assessee company.<\/em><\/span>
\n <\/a><\/td>\n

19.1-19.9<\/td>\n<\/tr>\n
20. <\/p>\n<\/td>\nNotice issued to non-existing company: <\/a><\/td>\n20.1-20.5<\/td>\n<\/tr>\n
21. <\/p>\n<\/td>\nNotice issued in name of deceased assessee:<\/a><\/em> <\/td>\n21.1 – 21.8<\/td>\n<\/tr>\n
22. <\/p>\n<\/td>\nService by Affixture – nature – scope – procedure
\n Invalid Service of notice not a procedural defect.<\/em>  <\/a><\/td>\n		22.1- 22.7<\/td>\n<\/tr>\n
23. <\/p>\n<\/td>\nNotice issued at old Address<\/a><\/td>\n23.1- 23.2<\/td>\n<\/tr>\n
24. <\/p>\n<\/td>\nNotice u\/s. 143(2) is mandatory
\n – Effect of sec 292BB – jurisdictional error cannot be cured . <\/a><\/td>\n		24.1-24.6<\/td>\n<\/tr>\n
25. <\/p>\n<\/td>\nNo reassessment just to make an enquiry or verification: No reopening to make fishing inquiries. <\/a><\/td>\n25.1<\/td>\n<\/tr>\n
26. <\/p>\n<\/td>\nOnce Asst is open – any other income can be considered. Expl 3 to sec 147<\/a><\/td>\n26.1-26.3<\/td>\n<\/tr>\n
27.<\/p>\n<\/td>\nNo reassessment u\/s. 148, if assessment or reassessment is pending.<\/p>\n

When time limit for issue of notice under section 143(2) has not expired.<\/em><\/span>
\n <\/a><\/td>\n

27.1-27.3<\/td>\n<\/tr>\n
28. <\/p>\n<\/td>\nReopening beyond 4 years<\/p>\n

Condition – Sanction – Failure on part of Assessee to Disclosure Material facts.<\/em><\/span>
\n Reassessment has to be based on “ fresh material ” – New tangible material. <\/em><\/span>
\n Second Reassessment.<\/em><\/span>
\n Failure to Disclosure All Material facts was not Mentioned in the Recorded Reasons.<\/em><\/span>
\n <\/a><\/td>\n

28.1-28.12<\/td>\n<\/tr>\n
29. <\/p>\n<\/td>\nApproval and sanction<\/p>\n

Failure to take sanction of appropriate authority<\/em><\/span>
\n Merely affixing a <\/span>‘yes’<\/strong> stamp
\n <\/a><\/td>\n

29.1-29.11<\/td>\n<\/tr>\n
30. <\/p>\n<\/td>\nDisclosure of primary facts : No power to review<\/p>\n

Facts were before AO at the time of original assessment – no reopening.<\/em><\/span>
\n Assessment order is not a scrap of paper<\/em><\/span>
\n Full particulars were furnished in the course of original assessment proceedings<\/em><\/span>
\n <\/a><\/td>\n

30.1-30.16<\/td>\n<\/tr>\n
31. <\/p>\n<\/td>\nDisclosure in Balance Sheet can be sufficient . <\/a><\/td>\n31.1<\/td>\n<\/tr>\n
32. <\/p>\n<\/td>\nFull and True Disclosure of all Material facts:
\n Finding in case of another assessee –  <\/em>Reassessment to verify held to be not valid- first proviso to section 147 .<\/a><\/td>\n		32.1- 32.9<\/td>\n<\/tr>\n
33. <\/p>\n<\/td>\nReopening within 4 years: Asst Completed u\/s 143(3)
\n – AO had questioned the assessee with respect to a particular income but not dealt with it in the order
\n – Merely because a certain element or angle was not in mind of Assessing Officer while accepting such a claim, could not be a ground for issuing notice<\/em>
\n – <\/em>AO lost sight of a statutory provision like 50C<\/strong> <\/a><\/td>\n		33.1- 33.4<\/td>\n<\/tr>\n
34. <\/p>\n<\/td>\nReassessment – Change of Opinion No New Material brought on Record<\/em><\/span>
\n Reassessment has to be based on “Fresh Material”. <\/em><\/span>
\n any attempt on part of AO to re-examine the  claim, without any material would be based on change of opinion<\/em><\/span>
\n No reopening of  assessment to examine another facet of a  claim<\/em><\/span>
\n subsequent  assessment years  proceedings- form tangible material <\/span>
\n <\/a><\/td>\n		34..1- 34.15<\/td>\n<\/tr>\n
35. <\/p>\n<\/td>\nRe-Assessment – Audit Objection – AO objecting to reopening Audit objection vis-a-vis debatable issue.<\/span>
\n CBDT instruction directing remedial action in case of audit objections.<\/span>
\n <\/a><\/td>\n		35.1-35.12<\/td>\n<\/tr>\n
36. <\/p>\n<\/td>\nReassessment – Interpretation of High Court decision <\/a><\/td>\n36.1<\/td>\n<\/tr>\n
37. <\/p>\n<\/td>\nDirection of the Higher Authorities
\n – Notice under direction of Commissioner Reassessment is held to be not valid<\/em> <\/a><\/td>\n		37.1-37.3<\/td>\n<\/tr>\n
38. <\/p>\n<\/td>\nSupreme Court Decision cannot be the basis for Reopening
\n – Favour and contrary decisions <\/em> <\/a><\/td>\n		38.1<\/td>\n<\/tr>\n
39. <\/p>\n<\/td>\nReassessment based on Retrospective Amendment not Justified <\/a><\/td>\n39.1<\/td>\n<\/tr>\n
40. <\/p>\n<\/td>\nAppeal Pending from original assessment order. Reassessment cannot be done as the order merged with Order of Higher Authorities:
\n – Proviso to section 147 has been inserted by Finance Act, 2008, w.e.f. 2008.<\/em> <\/a><\/td>\n		40.1- 40.4<\/td>\n<\/tr>\n
41. <\/td>\nJurisdiction Issue can always be raised at any stage.
\n – waiver will not confer jurisdiction on AO<\/em>
\n – Jurisdictional defect <\/em>could not be cured by invoking provisions of S. 292B of the Act.<\/a><\/td>\n		41.1 – 41.8<\/td>\n<\/tr>\n
42. <\/p>\n<\/td>\nRectification Proceedings Initiated and Dropped<\/p>\n

Sec 147 viz – a- viz Sec 154<\/em><\/span>
\n S. 147 vs. S. 263<\/em><\/strong><\/span>
\n Reassessment – Rectification pending.<\/em><\/span>
\n Case Laws.<\/em><\/span>
\n <\/a><\/td>\n

42.1-42.5<\/td>\n<\/tr>\n
43. <\/p>\n<\/td>\nReopening based on Valuation Report <\/a><\/td>\n43.1- 43.5<\/td>\n<\/tr>\n
44. <\/p>\n<\/td>\nReassessment jurisdiction is available for benefit of revenue only
\n – Assessee cannot raise fresh independent claims<\/em> <\/a><\/td>\n		44.1-44.5<\/td>\n<\/tr>\n
45. <\/p>\n<\/td>\nWhen Intimation under section 143(1) is issued<\/p>\n

No Reassessment if no “ Reason to Believe” even in case of section 143(1)<\/em><\/span>
\n <\/a><\/td>\n

45.1- 45.5<\/td>\n<\/tr>\n
46. <\/p>\n<\/td>\nSection 150 : Limitation Prescribed<\/p>\n

Finding or Direction( S. 149)<\/em><\/span>
\n <\/a><\/td>\n

46.1- 46.16<\/td>\n<\/tr>\n
47. <\/p>\n<\/td>\nApplicability of second proviso to sec 147 of the Act
\n Amendment to S. 149, by Finance Act, 2012  <\/a><\/td>\n		      47.1<\/td>\n<\/tr>\n
48. <\/p>\n<\/td>\nSection 153 : Time Limits for Reassessment<\/a><\/td>\n      48.1<\/td>\n<\/tr>\n<\/table>\n

<\/a>I.          Preconditions:<\/u><\/strong><\/p>\n

\n 1.1       It is well known that powers of the Assessing Officer to re-open a completed assessment are not unfertile.  Sec. 147 and Section 148 of the Act contains the perquisite conditions to be fulfilled for invoking the jurisdiction to reopen the assessment. <\/p>\n

1.2       The general principle is that once an assessment is completed it becomes final. Section 147 empowers the Assessing Officer to reopen an assessment if the conditions prescribed therein are satisfied. The conditions are: <\/p>\n

i)          The Assessing Officer<\/u><\/strong> has to record the reason<\/u><\/strong> for taking action under section 147. It is on the basis of such reasons recorded in the file that the validity of the order reopening a assessment has to be decided. Recorded reasons must have a live link with the formation of the belief.     <\/p>\n

ii)         The Assessing Officer has reason to believe<\/u><\/strong> that any income<\/u><\/strong> chargeable to tax has escaped assessment<\/u><\/strong> for any assessment year. <\/p>\n

\n iii)        The jurisdictional condition under section 147 is the formation of belief by the Assessing Officer<\/u><\/strong> that income chargeable to tax has escaped assessment for any assessment year.<\/p>\n

iv)        No action can be initiated under section 147 after the expiry of 4 years<\/u><\/strong> from the end of the relevant assessment year unless<\/em><\/strong> the income chargeable to tax has escaped assessment by reason for the failure on the part of the taxpayer to disclose fully and truly all material facts<\/u><\/strong> necessary for his assessment.. <\/p>\n

<\/a>II          procedure to challenge the reassessment proceedings:<\/u><\/strong><\/p>\n

\n 2.1       The Apex Court in the case of GKN Driveshafts (India) Ltd. v\/s D.C.I.T. (2003) 259 ITR 19 (SC) <\/strong>has laid down the procedure to challenge the reassessment proceedings.<\/p>\n

\n When a notice under section 148 of the Income-tax Act, 1961, is issued, the proper course of action <\/p>\n

\n  (a) is to file the return , <\/p>\n

\n (b) if he so desires, to seek reasons for issuing the notices. <\/p>\n

\n (c) The assessing officer is bound to furnish reasons within a reasonable time. <\/p>\n

\n (d) On receipt of reasons, the assessee is entitled to file objections to issuance of notice , and <\/p>\n

\n (e) the assessing officer is bound to dispose of the same by passing a speaking order. <\/p>\n

\n (f) the assessee if desires can file a writ  challenging the order or can proceed with the assessment . However the assessee has still a right to challenge the reopening of assessment after the assessment order is passed, before appellate authority. <\/p>\n

2.2       The courts have consistently held that the pre condition are jurisdiction conferring on the AO to reopen the assessment and their non fulfillment renders the initiation itself ab-initio void. The High Court in appropriate cases has power to issue an order prohibiting the Income-tax Officer from proceeding to reassess the income when the conditions precedent do not exist. It is well-settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, will issue appropriate orders or directions to prevent such consequences.<\/p>\n

The Courts have consistently warned the department not to harass taxpayers by reopening assessments in a mechanical and casual manner. The Pr CIT  were  directed to issue instructions to AO’s to strictly adhere to the law explained in various decisions and make it mandatory for them to ensure that an order for reopening of an assessment clearly records compliance with each of the legal requirements. The AO’s were also directed to strictly comply with the law laid down in GKN Driveshafts (supra) as regards disposal of objections to reopening assessment: <\/strong><\/p>\n

\n Pr. CIT v. Samcor Glass Ltd. Delhi High Court  <\/strong>www.itatonline.org<\/strong><\/a> <\/strong><\/p>\n

\n CIT .v. Trend Electronics( 2015) 379 ITR 456 (Bom.)(HC). <\/strong><\/p>\n

\n Bayer Material Science Pvt. Ltd.v. DCIT(2016) 382 ITR 333 (Bom.)(HC)<\/strong> <\/p>\n

2.3       Strictures passed against the AO for making comments which are highly objectionable and bordering on contempt and for being oblivious to law. As the very same ACIT had passed series of orders reopening assessments in ignorance of legal position:<\/strong><\/h2>\n

Zuari Foods and Farms Pvt. Ltd vs. ACIT (2018) 408 ITR 279(Bom.)(HC), <\/strong><\/p>\n

<\/a>III.        <\/strong>Alternative remedy NOT A BAR TO ENTERTAIN A WRIT :<\/u><\/strong> <\/u><\/p>\n

\n 3.1       <\/strong>The Income-tax Act provides a complete machinery for the assessment\/re-assessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities. The assessee cannot be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he has adequate remedy open to him by an appeal to the Commissioner of Income-tax (Appeals). As the said statutory remedy is an effective and efficacious one, the Writ Court should not  entertained the Writ Petition. <\/p>\n

\n However this principle of alternate remedy ought not to apply to a case where the Assessing Officer passes a reassessment order without following the GKN Driveshafts (India) Ltd .v. ITO (2003) 259 ITR 19 (SC) procedure of passing an order on objections and waiting 4 weeks thereafter as held in Allana Cold Storage<\/strong>  Ltd  v.ITO<\/strong> <\/strong>(2006)<\/strong> <\/strong>287 ITR 1 (Bom.)(HC), <\/strong>Kamlesh Sharma<\/strong> (Smt.) v. B.L.Meena, ITO (2006)<\/strong> <\/strong>287 ITR 337 (Delhi)(HC).<\/strong> <\/p>\n

3.2       In the case of CIT v. Chhabil Das Agarwal.<\/strong><\/strong>(2013) 357 ITR 357 <\/em><\/strong>(SC) <\/strong>the Assessing Officer  issued a notice u\/s 148 reopening the assessment and pursuant thereto passed a re-assessment order u\/s 147. The assessee filed a Writ Petition in the High Court to challenge the said notice and re-assessment order<\/strong>. The High Court entertained the Writ Petition and quashed the re-assessment order. On appeal by the department to the Supreme Court HELD reversing the High Court: <\/p>\n

\n The assessee cannot be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he has adequate remedy open to him by an appeal to the CIT (Appeals). As the said statutory remedy is an effectual and efficacious one, the Writ Court ought not to have entertained the Writ Petition filed by the assessee . <\/p>\n

\n Similarly in the case of  Annamalai University v. ITO <\/strong>(2018) 401 ITR 80 (Mad) (HC)<\/strong> the assessee had applied for exemption under section 10(23C)(vi) and final orders were awaited. The assessee was issued notices under section 148 for reopening of the assessments for the assessment years 1999 – 2000 to 2004 – 05. On writ petitions, the Court held, that the assessee was entitled to seek reasons for reopening of the assessment, under section 147 and on receipt of the reasons, the assessee was entitled to file its objections. <\/strong><\/p>\n

3.3          <\/strong>The Hon Bombay High Court in the case of<\/strong> Aroni Commercials Ltd vs. ACIT [2017] 393 ITR 637<\/em><\/strong><\/a>observed thatt<\/strong>he argument, based on JCIT vs. Kalanithi Maran<\/strong><\/a>, [2014] 366 ITR 453(Mad) (HC)<\/strong> that this Court should not exercise its writ jurisdiction under Article 226 of the Constitution of India and the petitioner should be left to avail of the statutory remedies available under the Act is not acceptable.  Writ Petition challenging lack of jurisdiction to issue s. 148 notice on the ground that it is based on ‘change of opinion’ & preconditions of s. 147 are not satisfied is maintainable .<\/strong><\/p>\n

3.4       A similar view has been taken in yet another case by the Hon Bombay High court in case of Crompton Greaves Ltd. v. ACIT (2015) 275 CTR 49 \/ 229 Taxman 545 (Bom)(HC). <\/em><\/strong>Thus the facts in the case of Chhabil Das Agarwal (Supra) <\/strong>were different and distinguishable  namely that the reassessment order was passed and thereafter the notice and the said order was challenged by way of writ. Similarly in Annamalai University(supra) <\/strong>the assessee had not followed the procedure to challenge the reopening notice, therefore distinguishable.<\/strong><\/p>\n

\n Thus an assessee is entitled to writ remedy under Article 226 of the Constitution, if the action of the authorities in reopening the assessment was beyond their jurisdiction. Cedric De Souza Faria. v. DCIT (2018) 400 ITR 30 (Bom) (HC) <\/strong><\/p>\n

3.5       <\/strong>In yet another decision where there was  mixed question of facts and law involved <\/em>– Writ is held to be not maintainable :  <\/strong><\/p>\n

\n Dismissing the petition the Court held that , certain mixed questions of law could not be decided in favour of the assessee nor could the Department be deprived of its right to probe the matter further and formulate an opinion with reference to the provisions of the Act and pass orders. The assessee’s case was one of mixed questions of law and facts and therefore, the Assessing Officer had to consider all the materials available on record for the purpose of reopening the assessment including the objections submitted by the assessee, before passing an assessment order. The assessee was entitled to submit all its objections and legal grounds and materials before the Assessing Officer enabling him to consider them and pass an assessment order. The contention of the assessee that it was entitled to the benefit of the proviso to section 147 could be considered only with reference to the facts and materials on record before the Assessing Officer and that exercise could not be done by the court in writ jurisdiction under Article 226 of the Constitution of India. Court also held that, section 149(1)(a) was not applicable to the assessee since the purported escapement of income chargeable to tax was beyond Rs. 1 lakh. S. 149(1)(b) was applicable to the assessee. Accordingly the notice issued within a period of six years is held to be within the period of limitation . ( AY. 1996 -97) <\/p>\n

\n T. C. V. Engineering Pvt. Ltd. v. ACIT (2019) 413 ITR 319 (Mad)(HC)<\/strong><\/p>\n

\n <\/a>IV.<\/strong>        Reasons – Recorded to be supplied – Communication of Reasons – Mandatory: <\/u><\/strong><\/p>\n

4.1       Recording of reasons before issue of notice is mandatory hence Reassessment was held to be bad in law  [ CIT v. Blue Star Ltd. (2018) 162 DTR 302 \/ 301 CTR 38 (Bom)<\/strong> <\/strong>(HC) <\/strong><\/p>\n

\n It is now a settled position of law that for passing an order under section 147 recording of reasons u\/s. 148 and communication thereof to party concern is mandatory.<\/u><\/p>\n

\n             Gujarat Fluorochemicals Ltd vs. DCIT (2008) 15 DTR (Guj) 1<\/em><\/strong><\/p>\n

\n             Nandlal Tejmal Kothari vs. Inspecting ACIT (1998) 230 ITR 943 (SC)<\/em><\/strong><\/p>\n

4.2<\/strong> However if assessee does not ask for s. 147 reasons & object to reopening, ITAT  cannot remand to AO & give assessee another opportunity<\/strong>:<\/strong> <\/p>\n

CIT vs. Safetag International India Pvt Ltd [2012] 332 ITR 622 (Delhi High Court)<\/strong><\/a> <\/p>\n

4.3       In the case of CIT v. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (Bom.) <\/strong>(HC) <\/strong>t<\/strong>he Tribunal following the judgment of Bombay High Court in CIT v. Fomento Resorts and Hotels Ltd ITA no 71 of 2006 dated 27th November, 2006 , has held that though the reopening of assessment was within three years from the end of relevant assessment year, since the reasons recorded for reopening of the assessment were not furnished to the assessee till date the completion of assessment, the reassessment order cannot be upheld, moreover, Special Leave Petition filed by revenue against the decision of this court in the case of CIY v. Fomento Resorts and Hotels Ltd , has been dismissed by Apex Court, vide order dated July 16, 2007. The court dismissed the appeal of the revenue. <\/p>\n