CUDDALORE IMA WELFARE TRUST,CHENNAI vs. ITO, (EXEMPTION), WARD 2, CHENNAI, CHENNAI

आयकर अपीलीय अिधकरण, ’ए’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI �ी ऐम. बालगनेश, लेखा सद� के सम� Before Shri M. Balaganesh, Accountant Member आयकर अपील सं./I.T.A. No.3440/Chny/2025 िनधा�रण वष�/Assessment Year: 2012-13 Cuddalore IMA Welfare Trust, Vs. The ITO (Exemption), J. Prabhakar, Chartered Accountant, Ward 2, Chennai. No.245, T.T.K. Road, Residency Apartments, Chennai - 600 018, Tamil Nadu. [PAN: AAATC7520M] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Mr. J. Prabhakar, CA ��थ� की ओर से/Respondent by : Ms. Swarnalatha, Adl CIT सुनवाई की तारीख/ Date of hearing : 24.06.2026 घोषणा की तारीख /Date of Pronouncement : 25.06.2026 आदेश /O R D E R PER M. BALAGANESH, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order dated 14.10.2025 passed by the ld. Commissioner of Income Tax (Appeals), ADDL/JCIT (A)-5, Mumbai for the assessment year 2012-13.

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recorded. In the instant case, it is a fact that the reasons recorded were not furnished to the assessee, as no evidence has been brought on record by the Revenue to prove the contrary. The letter dated 25.10.2019 only pertains to the issuance of notice under Section 143(2) of the Act, and it does not contain the reasons recorded. Whether any further letter dated 25.10.2019 was issued to the assessee containing the reasons recorded has not been brought on record by the Revenue despite this issue being raised both before the ld. CIT(A) as well as before me. The reasons were ultimately furnished to the assessee only in the re- assessment order and not before that. Now, the short question that arises for my consideration is as to whether the re-assessment proceedings per se would become illegal and void ab initio if the reasons recorded for re- opening the assessment were not furnished to the assessee prior to completion of the re-assessment order. This issue was the subject matter of adjudication before the Hon’ble Bombay High Court in the case of CIT v. Trend Electronics reported in 379 ITR 456. The facts of the assessee’s case are exactly identical to the facts prevailing before the Bombay High Court. The relevant operative portion of the said judgment is reproduced hereunder:-

“ 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 the notice dated March 26, 2010, from the Assessing Officer. The reasons were admittedly not furnished to the respondent-assessee before the completion of the reassessment proceedings. The impugned order places reliance upon the decision of the apex court in GN Driveshafts (India) Ltd. v.ITO, (2003) 259 ITR 19 (SC) wherein it has been specifically provided that the Assessing Officer is bound to furnish the reasons for issuance of reopening of notice when sought for by the assessee. Further, reliance was placed upon the decision of this court in Commissioner Of Income-Tax v. Videsh Sanchar Nigam Ltd., (2012) 340 ITR 66 (Bom) wherein this court has held that failure to furnish the recorded reasons for issue of reopening notices to the as- sessee before completion of the assessment proceedings would make the reassessment order passed in pursuance of such a notice bad in law. In the

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above circumstances, the appeal of the respondent-assessee was allowed by the Tribunal. 7. 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. 8. We find that the impugned order merely applies the decision of the apex court in GN Driveshafts (India) Ltd. (supra). Further, it also follows the decision of this court in Videsh Sanchar 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 the power to reopen a completed assessment under the Act is an exceptional power and whenever the Revenue seeks to exercise such power, they must strictly comply with the pre-requisite 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 as-sessment. 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 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 the 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. 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. 10. Accordingly, the appeal dismissed. No order as to costs.” 5. Respectfully following the same, I hold that non-furnishing of the reasons recorded, despite the assessee asking for the same, would become fatal to the reassessment proceedings. Accordingly, I hold that

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the re-assessment proceedings are bad in law. Ground No. 2 raised by the assessee is allowed. Since the entire re-assessment is declared bad in law, the adjudication of the other grounds becomes academic in nature and they are left open.

Order pronounced on 25th June, 2026 at Chennai.

Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER

Chennai, Dated, 25.06.2026 MM/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR & 5. गाड� फाईल/GF.