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Facts
The assessee's assessment was reopened under Section 147 of the Income Tax Act without serving a Section 148 notice or providing reasons for reopening. Despite repeated requests and objections from the assessee, the AO failed to provide the recorded reasons or respond to objections, completing the assessment in violation of Supreme Court guidelines. The department subsequently failed to produce assessment records before the Tribunal despite multiple opportunities and directions.
Held
The Tribunal quashed the notice issued under Section 148 of the Act for both assessment years. This decision was based on the AO's failure to provide reasons for reopening and the revenue's repeated inability to produce assessment records, leading the Tribunal to accept the assessee's averments.
Key Issues
Whether the reopening of assessment under Section 147/148 was valid when reasons for reopening were not provided and the department repeatedly failed to produce assessment records before the Tribunal.
Sections Cited
147, 148, 143(1), 142(1), 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI SANJAY AWASTHI
आदेश / O R D E R Per Bench : These two appeals are filed by the assessee against the separate orders passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, both dated 05.01.2024 for the assessment years 2011-2012 & 2010- 2011. 2. None appeared on behalf of the assessee, however, an adjournment application has been filed on behalf of the assessee on the ground which is not acceptable looking to the facts and circumstances of the case. Accordingly, the adjournment application filed by the assessee is rejected and appeals of the assessee being disposed off after considering the submission of Ms. Monalisa Pal Mukherjee, Sr. DR, who appeared on behalf of the revenue as well as the facts available on record.
2 ITANos.450&451/Kol/2024 3. The grounds given by the assessee remained unsubstantiated. Here it must be mentioned that the appeals have been filed by the assessee on 14.03.2024 and both the appeals have been posted on multiple occasions. 4. In the present appeal, a few order sheet entries would have importance. The order sheet entries on 21.05.2024, read as under :-
The order sheet entries on 06.08.2024, reads as under :-
3 ITANos.450&451/Kol/2024 7. The order sheet entries on 08.08.2024, reads as under :-
The order sheet entries on 24.10.2024, reads as under :-
4 ITANos.450&451/Kol/2024 9. Further, a perusal of the said order sheet entries show that there are hearings on 09.01.2025, 06.03.2025 & 28.03.2025. The status of the assessment records remains the same. A perusal of the statement of facts for both the years under consideration, which were the reason for calling for the records, read as under :- The appellant is a Private limited company registered in the year 1995, resident in India and engaged in the business of real estate development and construction. During the assessment year under consideration, the assessee filed its return of income on 29.09.2010 showing a total income of Rs. 43,07,150/-. The return was processed u/s 143(1) on 25.02.2011. Subsequently DIT (I&CI), Jaipur, asked for some information/documents related to the sale of property/land. All the papers/ documents as required were duly submitted. Later on, the A.O. reopened the assessment and initiated the proceedings u/s 147 without serving any notice u/s 148. The A.O. did not provide any reason for reopening of the assessment and issued notice u/s 142(1). The appellant asked the A.O. to provide the reason for reopening of assessment and raised its objection on the reopening. Time and again assessee raised its objection. But the Ld. A.O. did not reply to the objection raised nor passed any comment or order on the objection raised by the assessee and completed the assessment. The A.O. failed to follow the guidelines laid by Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. The Ld. A.O. issued notices u/s 133(6) to several parties, which were duly complied by the concerned parties. The A.O. never rejected the documents submitted by the assessee nor did he object the transactions made during the year by the assessee. During the course of assessment proceedings, the appellant furnished various details and supporting together with statement of accounts as required by the Learned A.O. While completing the assessment the Learned A.O. made various additions to the returned income on account of expenditure claimed. Being aggrieved the appellant filed an appeal against the order of the A.O., before the CIT (Appeals), Kolkata-3. The Ld. CIT (A) did not apply his mind and treated the reopening as valid. The LD. CIT (A) even did not follow the guidelines laid by the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. The appeal was filed by the assessee on 18.09.2015. However, till January 2021 no notice of hearing was received by the assessee. During covid situation several records of the assessee were mutilated, misplaced and/or lost. The assessee asked for adjournment of hearings. The assessee applied to the A.O. for supply of records and documents to prepare suitable reply and make submission. However, no records were provided by the department.