DAZZLE AGROTECH PVT LTD,NEW DELHI vs. ACIT CIRCLE-11(1), NEW DELHI

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ITA 33/DEL/2020Status: DisposedITAT Delhi30 November 2022AY 2016-174 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment made under Section 143(3) read with Section 147 is bad in law and void ab initio because the reasons for reopening were not served on the assessee. The reassessment order was consequently quashed.

What were the facts?

The assessee challenged the reopening of assessment under Section 147 and the subsequent addition under Section 68. The primary contention was that the reasons for reopening were never supplied to the assessee despite requests.

What were the issues?

Whether the reassessment proceedings are vitiated due to non-supply of reasons for reopening of assessment to the assessee. Whether the addition made under Section 68 is valid when the reassessment itself is bad in law.

Which sections of the Income-tax Act were involved?

Section 147,Section 68,Section 143(3),Section 148

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(5)Show list

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Income Tax Appellate Tribunal, [ DELHI BENCH “S.M.C.” : DELHI ]

Before: SHRI CHALLA NAGENDRA PRASAD, S.M.C.

For Appellant: Shri Mithalesh Kumar Pandey
Hearing: 30/11/2022

आदेश / O R D E R PER C. N. PRASAD, J. M. :

1.

This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-15 [hereinafter referred to CIT (Appeals)] New Delhi, dated 25.10.2019 for assessment year 2016-17.

2.

The assessee in its appeal apart from challenging the order of the ld. CIT (Appeals) in confirming the addition under section 68 of the Income Tax Act, 1961 (the Act) also challenged reopening of assessment under section 147 is bad in law.

3.

The ld. Counsel for the assessee, at the outset, submits that in spite of request by the assessee the reasons for reopening of assessment were never supplied to the assessee. Referring to page 31 of the Paper book the ld. Counsel for the assessee submits that the assessee after receiving the notice u/s 148 dated 19.03.2018 requested for reasons recorded for issue of the said notice under section 148 of the Act. The ld. Counsel also referring to page 66 of the Paper book which is the acknowledgement provided by the Revenue in the e-proceedings submitted its response to the notice under section 148 of the Act through e-portal stating that the return was filed in response to 148 notice for the assessment year 2016-17 and further requested to supply reasons recorded for the issue of notice under section 148 of the Act. The ld. Counsel for the assessee placing reliance on the judgement of the Hon’ble Supreme Court in the case of PCIT Vs. Ramaiah [(2019) 103 taxmann.com 202 (SC)] submits that in the absence of communication of reasons for re-opening of assessment to the assessee the assessment made under section 143(3) read with section 147 of the Act as bad in law.

4.

The ld. DR placed reliance on the orders of the CIT (Appeals).

5.

Heard rival contentions. It is noticed that the assessee has raised this ground before the ld. CIT (Appeals) that no reasons for re-opening of assessment were supplied to the assessee. However, the ld. CIT (Appeals) placing reliance on the decision of the Apex court in the case of Home Finders Housing Ltd. Vs. ITO [(2018) 94 taxmann.com 84 (SC)] observed that non-compliance on directions of Hon’ble Supreme Court in the case of GKN Drive Shaft (India) Ltd. Vs ITO [(2004) 259 ITR 19-20 (SC)] on receipt of objections given by the assessee to notice under section 148 of the Act would not make re-assessment order void ab initio. However, in the case of the assessee the contention of the assessee was that the Assessing Officer never served any reasons for re-opening of assessment. Only when the reasons are served on the assessee the question of filing objections for re-opening of assessment would arise. In this case allegation of the assessee is that the Assessing Officer never served any reasons for re-opening of assessment. An affidavit was also filed deposing that the assessee company did not receive any reasons recorded for issue of notice under section 148 for assessment year 2016- 17 either on Income Tax e-Portal or through Speed Post or through e-mail or through any courier or any other modes of delivery. The Revenue could not prove that the contention of the assessee was wrong and provide the reasons for re-opening of assessment. Hon’ble Karnataka High Court in the case of PCIT Vs. Ramaiah [103 taxmann.com 201] affirmed the order of the Tribunal in holding that in the absence of service of reasons recorded for re-opening of assessment on the assessee the re-assessment made under section 147 is bad in law. Further the SLP filed by the Revenue in PCIT Vs. V. Ramaiah (262 Taxman 16) has been dismissed by the Hon’ble Supreme Court. Thus, respectfully following the decision of the Apex court in the case of PCIT Vs. V. Ramaiah (supra) I hold that the re-assessment made under section 143(3) read with section 147 of the Act is bad in law and void ab initio in the absence of service of reasons for re-opening of assessment on the assessee before proceeding to complete the re-assessment under section 143(3) read with section 147 of the Act. Accordingly, the re-assessment order is quashed.

6.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on : 30/11/2022.

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