LALIT PIPES AND PIPES PRIVATE LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX - CIRCLE 7(1)(1), MUMBAI

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: A BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA 838/MUM/2026 िनधा�रणवष�/Assessment Year:2012-13) LALIT PIPES AND PIPES PRIVATE DEPUTY COMMISSIONER OF LIMITED INCOME TAX - CIRCLE 7(1)(1), MUMBAI 138, Kasara Street, 3rd Lane, Darukhana, Mumbai, Mumbai- Vs. Aayakar Bhavan, Maharashi 400010, Maharashtra Karve Marg, Mumbai Mumbai-400020, Maharashtra अपीलाथ�Appellant ��थ� Respondent

Permanent Account Number of Assessee: AAACL1877F

अपीलाथ��ारा/Appellant represented by: Shri Vinayak Bhat, CA ��थ��ारा/Respondent represented by: Shri Surendra Mohan (SR. DR) सुनवाईकीतारीख/Date of conclusion of hearing: 23-Jul-2026 घोषणाकीतारीख/Date of pronouncement: 29-Jul-2026 आदेश / ORDER

PER: SHRI ANIKESH BANERJEE, (JM): The instant appeal of the assessee filed against the order of the Ld. Commissioner of Income Tax-(Appeals)-51, Mumbai [for brevity ‘Ld. CIT(A)], order passed under Section 250 of the Income Tax Act, 1961 (for brevity ‘the Act’), for Assessment Yea 2012-13, date of order 26.11.2025. The impugned order emanated from the order of the Ld. Deputy Commissioner of Income Tax-

ITA 838/MUM/2026 LALIT PIPES AND PIPES PRIVATE LIMITED 7(1)(2), Mumbai (for brevity ‘Ld. AO’), order passed under Section 143(3) r.w.s. 147 of the Act, date of order 10.06.2019.

ITA 838/MUM/2026 LALIT PIPES AND PIPES PRIVATE LIMITED recorded reason to the assessee is contrary to the law laid down by the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. v. ITO reported in (2002) 125 Taxman 963 (SC).The Ld.AR placed that the Ld.AO in the present case has failed to follow the directions laid down by the Hon’ble Apex Court, which makes the entire re-assessment proceedings void and, therefore, is liable to be quashed.

Sr.No. Particular Date ABP Page 1 Notice issued under section 148 of the 28.03.2019 18 Act 2 Letter dated 09/04/2019 filed on 16.04.2019 19 16/04/2019 in response to notice u/s148 requesting the Ld. AO to provide ccpy of the reasons recorded for reopening and copy of approval u/s151 3 Ld. AO without disposing objection filed 15.05.2019 20-21 by the assessee had directly issued show-cause notice along with Notice u/sec 143(2) of the Act 4 Replied the show cause notice U/sec 24.05.2019 22 143(2) and further requested to for reasons recorded along with approval u/sec 151

ITA 838/MUM/2026 LALIT PIPES AND PIPES PRIVATE LIMITED Ld. AR contended that without serving the recorded reason the assessment under section 147 of the Act is vitiated entire proceedings. Ld. AR respectfully relied on the order of Hon'ble Bombay High Court in the case of Commissioner of Income-tax, (Large Tax Payer Unit), Mumbai v. IDBI Ltd. reported in [2016] 76 taxmann.com 227 (Bombay). Relevant paragraphs are reproduced below :-

“(iii) Being aggrieved, the Respondent carried the issue in appeal to the Tribunal. The Tribunal in the impugned order records the fact that it is an undisputed position that in spite of repeated requests made by the Respondent Assessee, the Assessing Officer did not supply its reasons in support of the reopening notice under Section 148 of the Act. On the aforesaid facts, the impugned order of the Tribunal by placing reliance upon the decisions of this Court in Siesta Steel Construction (P.) Ltd. v. K.K. Shikare [1985] 154 ITR 547/[1984] 17 Taxman 122, CIT v. Fomento Resorts and Hotels Ltd. [IT Appeal No. 71 of 2006] and upon the decision of its co-ordinate bench in case of Tata International Ltd. v. Dy. CIT [2012] 52 SOT 465/23 taxmann.com 18 (Mum.) concluded that the non-supply of reasons in support of the reopening notice would make the order passed thereon bad in law. Consequently, the impugned order allowed the appeal on issue of jurisdiction and in that view the issue on merits became academic.

(iv) Mr. Malhotra, Counsel for the Revenue, submits that the Respondent Assessee was aware of the reasons for the reassessments. Thus, there was no violation of the principles of natural justice. In the above view, it is submitted that the question as framed be admitted for consideration.

(v) We find that the question as framed proceeds on the basis that the Respondent Assessee was aware of the reasons for re-assessment. The only basis for the aforesaid submission is the submission made by the Revenue before the Tribunal that the Respondent Assessee is a public sector institution who was aware that search action has been initiated on certain lessees in respect of transactions with IDBI i.e. Respondent- Assessee. On the basis of the above, it is to be inferred that the reason for re-assessment was known to the Respondent Assessee. The supply of reason in support of the notice for reopening of an assessment is a jurisdictional requirement. The reasons recorded form the basis to examine whether the Assessing Officer had at all applied his mind to the facts and had reasons to 4

ITA 838/MUM/2026 LALIT PIPES AND PIPES PRIVATE LIMITED believe that taxable income has escaped reassessment. It is these reasons, which have to be made available to the Assessee and it could give rise to a challenge to the reopening notice. It is undisputed that the reasons recorded for issuing reopening notice were never communicated to the Respondent Assessee in spite of its repeated requests. Thus, the grievance of the Revenue on the above count is unsustainable.

(vi) An alternative submission is made on behalf of the Revenue that the obligation to supply reasons on the Assessing Officer was consequent to the decision of the Apex Court that GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19/[2002] 125 Taxman 963 rendered in 2003 while, in the present case, the reopening notice is dated 9 December 1996. Thus it submitted at the time when the notice under Section 148 of the Act was issued and the time when assessment was completed, there was no such requirement to furnish to the assessee a copy of the reasons recorded. This submission is not correct. We find that the impugned order relies upon the decision of this Court in Seista Steel Construction (P.) Ltd. (supra) when it is held that in the absence of supply of reasons recorded for issue of reopening notice the assessment order would be without jurisdiction and needs to be quashed. The above view as taken by the Tribunal has also been taken by this Court in CIT v. Videsh Sanchar Nigam Ltd. [2012] 340 ITR 66/21 taxmann.com 53 viz. non-supply of reasons recorded to issue a reopening noticee would make the order of Assessment passed thereon bad as being without jurisdiction.

ITA 838/MUM/2026 LALIT PIPES AND PIPES PRIVATE LIMITED is legally sustainable without supplying the recorded reasons for reopening before issuing the show-cause notice as well as completion of the impugned assessment. The chronology of events placed on record shows that the notice under Section 148 of the Act was issued on 28.03.2019, the assessee asked to supply the recorded reasons by letter dated 09.04.2019 duly filed on 16.04.2019, and thereafter the Ld. AO proceeded to issue the show-cause notice dated 15.05.2019 without serving the recorded reason. The revenue has not been able to place on record any independent and separate evidence for supplying the recorded reason prior to completion of the reassessment.

ITA 838/MUM/2026 LALIT PIPES AND PIPES PRIVATE LIMITED 9. Since the reassessment itself has been held to be invalid on the legal issue, so, the addition made on merits would be purely academic. Accordingly, the same are left open and are not adjudicated.

BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI