M/S ANKUR DEVELOPERS & REALTORS ,MUMBAI vs. DCIT CC-3(4), MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL
“SMC” BENCH MUMBAI
BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER
M/s. Ankur Developers &
Realtors,
303, Golden Bungalow,
Juhu Road, Santacruz (W)
Mumbai – 400054. Vs.
DyCIT, Circle – 3(4)
Mumbai.
PAN/GIR No. AAOFA7539A
(Applicant)
(Respondent)
Assessee by Shri Resesh Shah (Virtually appear)
Revenue by Shri Sunil Agawane, Sr. DR
Date of Hearing
28.01.2025
Date of Pronouncement
17.02.2025
आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 31.10.2019 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the Commissioner of Income Tax (Appears)-51, Mumbai for the assessment year 2012-13. 2. The Ld.
DR moved an application for seeking adjournment on the ground that the assessment records in this appeal are not traceable. Whereas on the contrary,
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M/s. Ankur Developers & Realtors, Mumbai the Ld. AR disputed the said fact and objected to the application for seeking adjournment application moved by the department. Therefore, after having gone through the court file I found that the present date for addressing arguments is the 7th opportunity, whereas on previous occasions also the Ld. DR had sought adjournment on identical grounds. Even on last date of hearing i.e
20.01.2025, the Bench had given ‘last opportunity’ to the department for addressing the arguments but even then, today another application for seeking adjournment on the same pretext has been moved. Therefore, considering the above facts I find no reason in giving further adjournment to the department.
Hence application for seeking adjournment stands dismissed and matter is being heard on merits.
3. Ld. AR drawn my attention to application filed for admission of additional ground of appeal and the said application is reproduced herein below:
1. In the above case, the assessee has filed an appeal for the above assessment year against the order u/s. 143(3) r.w.s. 147
of the Act. In addition to the ground raised in the appeal memo, assessee prays to admit the following additional grounds:
On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in reopening the assessment u/s. 147 by issuing notice u/s. 148 of the Act.
2. Your Honours are requested to kindly admit the above additional ground in the interest of natural justice, equity and fair play as its omission in the main ground of appeal attached
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M/s. Ankur Developers & Realtors, Mumbai with Form 36 is purely unintentional. As the said ground pertains to legal issue the same may kindly be admitted in view of Honourable Supreme Court decisions in case of NTPC v. CIT
[229 ITR 383] and Jute Corporation of India Ltd. v. CIT
[187 ITR 688]. We shall always remain grateful for the act of kindness.
4. On the other hand Ld. DR contested the said application and submitted that the additional ground raised by the assessee may not be admitted.
5. After having heard counsels for both the parties and perusing the material placed on record, I found that the additional ground being raised by the assessee is purely legal in question and no separate evidences is required for adjudicating the same and since this ground raised by the assessee goes to the roots of the case, therefore, keeping in view the principles laid down by the Hon’ble Supreme
M/s. Ankur Developers & Realtors, Mumbai u/s 148 of the Act dated 28.07.2018 which is at paper book page No. 22 and submitted that through this notice the assessee was required to file return of income in 20
days, consequently and immediately on 04.08.2016, the assessee filed the reply and specifically stated that return of income filed on 29.09.2012 be treated as return u/s 148
of the Act and also requested to provide “reasons recorded” for initiating reassessment proceedings. But the said request was not entertained and “reasons recorded”
were not supplied / provided to the assessee.
8. Whereas on the contrary, Ld. DR relied upon the orders passed by the revenue authorities and submitted that the additional ground be dismissed on merits as the same is not in accordance with provisions of law.
9. After having heard the counsels for both the parties at length, perused the documents placed on record, judgments cited before me and also considering the orders passed by the revenue authorities. I find that admittedly the assessee had requested the AO to consider the return of income filed on 29.09.2012 be treated as return u/s 148
of the Act and requested for supply of “reasons recorded”
for initiating the reassessment proceedings, but throughout the proceedings the same were not provided /
supplied to the assessee.
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M/s. Ankur Developers & Realtors, Mumbai
Undisputedly the AO completed the reassessment without having given a copy of reasons recorded to the assessee, therefore having considered the factual position, I am of the view that failure to furnish reasons recorded for issuance of reopening notice to the assessee before completion of assessment would make the entire reassessment proceedings and consequential order in pursuance of such notice “bad in law” I am further of the view that It is axiomatic that power to reopen a completed assessment under the Act is an 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 11. For this proposition I found reliance from the decision of Apex Court in the case of GKN Driveshafts (India) Ltd. Sanchan Nigam limited Vs. ITO [2012] 340 ITR 66, wherein it was held as under:
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M/s. Ankur Developers & Realtors, Mumbai
Whether the Tribunal was justified in cancelling the reopening of the assessment is the question raised in this appeal. 2. The finding of fact recorded by the Income-tax Appellate Tribunal is that in the present case the reasons recorded for reopening of the assessment though repeatedly asked by the assessee were furnished only after completion of the assessment. The Tribunal following the judgment of this court in the case of CIT v. Fomento Resorts & Hotels Ltd., IT Appeal No. 71 of 2006, dated 27-11-2006, has held that though the reopening of the assessment is within three years from the end of the relevant assessment year, since the reasons recorded for reopening of the assessment were not furnished to the assessee till the completion of assessment, the reassessment order cannot be upheld. Moreover, special leave petition filed by the Revenue against the decision of this court in the case of Fomento Resorts & Hotels Ltd. (supra) has been dismissed by the apex court, vide order dated July 16, 2007. 3. In this view of the matter, the present appeal is also dismissed with no order as to costs. 12. Therefore respectfully following the principles laid down in the above cited decision, I hold that failure on the part of AO to furnish recorded reasons for issuance of reopening of assessment notice to the assessee before completion of assessment, reassessment orders passed in pursuance of such notice “bad in law” and consequently I quash the same. 13. Since, I have quashed the entire proceedings by allowing the additional ground, therefore there is no need to adjudicate the other grounds of appeal at this stage.
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M/s. Ankur Developers & Realtors, Mumbai
In the result, the appeal filed by the assessee stands allowed. Order pronounced in the open court on 17.02.2025. (SANDEEP GOSAIN) JUDICIAL MEMBER
Mumbai, Dated 17/02/2025
KRK, PS
आदेश की ितिलिप अेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. थ / The Respondent.
3. संबंिधत आयकर आयु / The CIT(A)
4. आयकर आयु(अपील) / Concerned CIT
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, मुबई / DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदेशानुसार/ BY ORDER,
सािपत ित ////
उप/सहायक पंजीकार ( Asst.