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Facts
The assessee's appeal was against an order of the NFAC/CIT(A) for AY 2007-08. The primary issue was the AO's failure to provide recorded reasons for reopening proceedings under Section 147 of the Act, despite a request from the assessee.
Held
The Tribunal held that failure to furnish recorded reasons for issuing a reopening notice, when sought by the assessee, renders the reassessment order bad in law. The court emphasized that such procedural compliance is a jurisdictional issue and cannot be implied.
Key Issues
Whether the reassessment proceedings are vitiated due to the non-furnishing of reasons recorded for reopening by the Assessing Officer to the assessee, when requested.
Sections Cited
147, 148, 250, 143(3)
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
O R D E R
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 18.06.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. CIT(A)) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2007-08.
In this case, the Assessee has raised the main issue that despite of seeking reasons recorded for reopening the proceedings u/s 147 of the Act, vide letter dated 20.06.2014, which was though taken into consideration by considering the specific request mentioned therein for consideration of the return originally filed on Rohit Sushilkumar Sawhney dated 28.03.2008, in response of the notice dated 28.03.2014 u/s 48 of the Act, the Assessing Officer failed to provide the reason recorded for re-opening the proceedings and thus, Violated the provisions of law as well as the guidelines set out by Hon’ble Apex Court in the Case of GKN Driveshafts (India) Ltd. Vs ITO 259 ITR 19(SC) and of the Hon’ble Jurisdictional High Court in the case of CIT vs. Videsh Sanchar Nigam Ltd. { 340 ITR 666} and in the case of CIT- 24 vs M/s. Trend Electronics in decided on 16.09.2015, wherein the Hon’ble Jurisdictional High Court considering the identical issue and the judgments in the cases of GNK Driveshafts (India) Ltd. vs ITO (supra) and CIT vs. Videsh Sanchar Nigam Ltd. (supra), ultimately affirmed the decision of the Tribunal in quashing the assessment order for not supplying the reason recorded for reopening, by observing and holding as under: “6. A further appeal was preferred by the respondent to the Tribunal. The impugned order of the Tribunal records the undisputed fact that the respondent-assessee had sought for reasons for reopening notice dated 26 March 2010 from the Assessing Officer. The reasons were admittedly not furnished to the respondent- assesee before the completion of the reassessment proceedings. The impugned order places reliance upon the decision of Apex Court in GNK Driveshafts (India) Ltd. Vs. ITO' wherein it has been specifically provided that the Assessing Officer is bound to furnish reasons for issuance of reopening of notice when sought for by the assessee. Further, reliance was placed upon the decision of this Court in CIT Vs. Videsh Sanchar Nigam Ltd. wherein this Court has held that failure to furnish the recorded reasons for issue of reopening notices to the assessee before completion of the assessment proceedings would make the reassessment order passed in pursuance of such a notice bad in law. In Rohit Sushilkumar Sawhney the above circumstances, the appeal of the respondent-assessee was allowed by the Tribunal.
Mr. Pinto, the learned Counsel for the revenue submits that the respondent-assessee had only asked for reasons once and did not further ask for reasons. Further he submits that as the respondent-assessee had participated in the proceedings before the Assessing Officer, it must be implied that reasons were furnished.
We find that the impugned order merely applies the decision of the Apex Court in GNK Driveshafts (India) Ltd. (supra). Further it also follows the decision of this Court in Videsh Sanchanr Nigam Ltd. (supra) in holding that an order passed in reassessment proceedings are bad in law in the absence of reasons recorded for issuing a reopening notice under Section 148 of the Act being furnished to the assessee when sought for. It is axiomatic that power to reopen ower to exceptional power and whenever revenue seeks to exercise such power, they must strictly comply with the prerequisite conditions viz. Reopening of reasons to indicate that the Assessing Officer had reason to believe that income chargeable to tax has escaped assessment which would warrant the reopening of an assessment. These recorded reasons as laid down by the Apex Court must be furnished to the assessee when sought for so as to enable the assessee to object to the same before the Assessing Officer. Thus in the absence of reasons being furnished, when sought for would make an order passed on reassessment bad in law. The recording of reasons (which has been done in this case) and furnishing of the same has to be strictly complied with as it is a jurisdictional issue. This requirement is very salutary as it not only ensures reopening notices are not lightly issued. Besides in case the same have been issued on some misunderstanding/misconception, the assessee is given an opportunity to point out that the reasons to believe as recorded in the the reasons do not warrant reopening before the reassessment proceedings are commenced. The Assessing Officer disposes of these objections and if satisfied with the objections, then the impugned reopening notice under Section 148 of the Act is dropped/withdrawn otherwise it is proceeded with further. In issues such as this, i.e. where jurisdictional issue is involved the same must be strictly complied with by the authority concerned and no question of knowledge being attributed on the basis of implication can arise. We also do not appreciate the stand of the revenue, that the respondent-assessee had asked for reasons recorded only once and therefore seeking to justify non-furnishing of reasons. We expect the state to act more responsibly.
Rohit Sushilkumar Sawhney 9. In view of the fact that the order of the Tribunal has only applied the settled position of law in allowing the respondent-assessee's appeal. No substantial question of law arises for our consideration.
Accordingly appeal dismissed. No order as to costs.”
We observe from the letter dated 20.06.2014, though there appears one stamp on such letter, however the same is totally unclear and/or invisible, however it is a fact as recorded by the Assessing Officer in para No. 2 of the assessment order itself that the Assessing Officer has duly considered the request of the assessee as mentioned in letter dated 20.06.2014 requesting the Assessing Officer for considering the original return filed on dated 28.03.2008 in response to the notice dated 28.03.2014 u/s 148 of the Act and therefore the contention raised by the assessee seems to be logical and genuine, however as the acknowledgment depicting on the letter dated 20.06.2014 is totally invisible and unclear and therefore considering the peculiar facts and circumstances in the totality for just and proper decision of the case and substantial justice, we are inclined to quash the impugned notice dated 28.03.2014 u/s 148 of the Act, along with the assessment order dated 03.03.2015 u/s 143(3) r.w.s. 147 of the Act passed in violations to the dictum laid down by Hon’ble Apex Court Hon’ble Jurisdictional High Court in the cases referred to above, however subject to verification of the letter dated 20.06.2014 by the Jurisdictional Assessing Officer (JAO) by giving a reasonable opportunity to the Assessee.
Thus, in the aforesaid direction, the Assessee’s appeal is allowed.
Order pronounced in the open court on 31.10.2025.