ASSISTANT COMMISSIOMNER OF INCOME TAX, BILASPUR vs. M/S BARBARIK PROJECTS LIMITED, SURAJPUR (CG)

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ITA 80/RPR/2018Status: DisposedITAT Raipur06 November 2019AY 2009-107 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that furnishing the reasons for reopening the assessment to the assessee is a jurisdictional requirement. Since the reasons were provided only after the completion of the assessment, the reassessment order could not be upheld.

What were the facts?

The Revenue appealed against the CIT(A)'s order which annulled the assessment order. The assessee had requested the reasons for reopening the assessment, but these were not provided until after the assessment was completed.

What were the issues?

Whether the reassessment order is valid when the reasons for reopening were not furnished to the assessee before the completion of the assessment.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(3),Section 147

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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI ANIL CHATURVEDI, AM & SHRI PARTHA SARATHI CHAUDHURY,JM

Hearing: 06.11.2019Pronounced: 06.11.2019

आदेश / ORDER PERANIL CHATURVEDI, AM: This appeal preferred by the Revenue emanates from the order of the Ld. CIT(A)-1, Jabalpur, dated 23.03.2018, for the assessment year 2009- 10. 2. The assessee is a company, who electronically filed its return of income on 24.06.2016 in response to notice u/s 148 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 31.03.2016 declaring total income at Rs.2,97,93,960/-. The case was taken up for scrutiny and thereafter, assessment was framed u/s 143(3) r.w.s. 147 of the Act vide order dated 30.12.2016 and the total income was determined at Rs.9,91,35,200/-. Aggrieved by the order of Assessing Officer, assessee carried the matter before Ld.CIT(A), who vide order dated 23.03.2018 (in appeal No.CIT(A)/Jabalpur/1/10737/2017-18) had annulled the assessment order dated 30.12.2016, thereby allowing the appeal of the assessee.Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us and has raised the following grounds : “1. On the facts and in the circumstances of the case the Ld. CIT(Appeals) erred in not appreciating that the reasons recorded were implicitly mentioned in the notice u/s 142(1) dated 16/12/2016 and 26/12/2016. 2. On the facts and in the circumstances of the case the Ld. CIT(Appeals) erred in not appreciating that the proposed addition was based on the statement recorded u/s 132(4) of the I.T. Act dated 19/05/2016

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which the assessee company was well aware of and that this fact was communicated vide notices dated 16/12/2016 and 26/12/2016. 3. On the facts and in the circumstances of the case the Ld. CIT(Appeals) erred in not appreciating that the Assessing Officer had provided ample opportunities to attend but the assessee company failed to attend and thus prevented the Assessing Officer to show the reasons recorded.”

3.

All the grounds being inter-connected are considered together.

4.

Before us, Ld. DR submitted that the necessity of supplying reasons recorded for reopening the assessment to the assessee is to make aware or give sufficient opportunity to the assessee about the reasons for which re- assessment is initiated. He further submitted that in the present case since the reasons recorded for reopening the assessment were implicitly mentioned in the notices u/s 142(1) of the Act dated 16.12.2016 and 26.12.2016 and the proposed addition was based on the statement recorded u/s 132(4) of the Act, therefore he submitted that the assessee was well aware of the facts and in such situation, the CIT(A) had erred in annulling the assessment for the reason that the copy of reasons recorded to the assessee were not furnished by the Assessing Officer. He therefore submitted that the order of CIT(A) be set aside.

5.

The Ld. AR for the assessee on the other hand, supported the order of CIT(A) and further placed on record date-chart and from there, he

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pointed out that in response to notice u/s 148 of the Act, dated 31.03.2016, the assessee filed return of income on 26.04.2016. The assessee thereafter, vide letter dated 27.04.2016 made an application to the Assessing Officer to supply the reasons recorded while issuing notice u/s 148 of the Act. He submitted that the Assessing Officer did not furnish the reasons recorded for reopening the assessment and passed an order u/s 143(3) r.w.s. 147 of the Act on 30.12.2016. He further submitted that non-furnishing of reasons before assessment was completed is also evident from the letter of ACIT, dated 14.03.2018 addressed to CIT(A), Bilaspur, wherein it is stated that the same was provided to the assessee on 22.02.2018. He pointed to the copy of aforesaid letter which is placed at pages 41 to 51 of Paper Book. The Ld. AR for the assessee therefore, relying on the decision of the Hon’ble Bombay High Court in the case of CIT Vs. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (Bom) submitted that when the reasons recorded for reopening were not furnished to the assessee by the Assessing Officer despite the request made by assessee, re-assessment order cannot be upheld. He submitted that similar proposition has been laid down by the Hon’ble Bombay High Court in the case of CIT Vs. Fomento Resorts & Hotels Ltd. (2016) (11) TMI 645 (Bom). He also relied on the decision of Hon’ble Delhi High Court in the case of Pr.CITVs. Jagat Talkies

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Distributors (2017) (9) TMI 192 (Del). He also placed on record the aforesaid decisions.

6.

We have heard the rival submissions and perused the material on record.The issue in the present case is about challenging the validity of assessment order framed u/s 143(3) r.w.s. 147 of the Act, which has been set aside by the CIT(A). It is an undisputed fact that the assessee after filing the return in response to notice u/s 148 of the Act, had sought copy of reasons recorded for reopening the assessment from the Assessing Officer. The Assessing Officer has not supplied the reasons till framing of the assessment and the reasons have been supplied much later.

7.

We find that it is a settled position of law that recording of reasons and furnishing the same to the assessee has to be strictly complied with as it is a jurisdictional issue. The Courts have also held that where jurisdictional issue is involved, the same must be strictly complied with by the concerned authority and no question of knowledge being attributed on the basis of implication can arise. We find that the Hon’ble Bombay High Court in the case of CIT Vs. Videsh Sanchar Nigam Ltd. (supra) has held that where reasons are furnished only after completion of assessment, re- assessment order could not be upheld. Before us, no contrary binding decision in support of the Revenue has been placed by the Ld. DR. In

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such situation, relying on the aforesaid decision of Hon’ble Bombay High Court, we find no reason to interfere with the order of CIT(A) and thus, the grounds of Revenue are dismissed.

In the result, appeal of Revenue is dismissed. 8.

Order pronounced on6thday of November, 2019.

Sd/- Sd/- PARTHASARATHI CHAUDHURY ANIL CHATURVEDI JUDICIAL MEMBER ACCOUNTANT MEMBER रायऩुर/ RAIPUR ; ददनाांक / Dated :6thNovember, 2019. GCVSR आदेश की प्रनिलऱपप अग्रेपषि / Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A)-1, Jabalpur 4. The Pr.CIT, Bilaspur 5.ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण,रायऩुरबेंच, रायऩुर / DR, ITAT, Raipur Bench, Raipur. गार्ड फ़ाइऱ / Guard File. 6. आदेशानुसार / BY ORDER, //True Copy// Senior Private Secretary आयकरअऩीऱीयअधधकरण, रायऩुर/ ITAT, Raipur.

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Date 1 Draft dictated on 06.11.2019 Sr.PS/PS 2 Draft placed before author 06.11.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order

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