THE INCOME TAX OFFICER,WARD-25(3)(2), MUMBAI vs. PALLAVI VIJEN JHAVERI, MUMBAI

Per Rajesh Kumar, Accountant Member:

The above titled appeal has been filed by the Revenue and the cross objection has been preferred by the assessee against the order dated 04.07.2017 of the Commissioner of Income Tax

2 ITA No.5998/M/2017 CO No.225/M/2018 M/s. Pallavi Vijen Jhaveri (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2007-08.

3 ITA No.5998/M/2017 CO No.225/M/2018 M/s. Pallavi Vijen Jhaveri 6. The Ld A.R. requested before the Bench that despite written requests to the AO, the reasons recorded under section 148(2) of the Act were not supplied to the assessee either during the assessment proceedings or during the appellate proceedings before the Ld. CIT(A). Finally, the reasons were supplied during the appellate proceedings before this Hon’ble Tribunal. The Ld. A.R. drew our attention to the letter dated 21.04.2014 requesting the AO to provide the reasons recorded for reopening the assessment. Similarly, the AO was also requested on 24.12.2016 vide para 6 to supply the reasons recorded for issuing notice under section 148 of the Act. The Ld. A.R. also drew our attention to page No.8 and 8A of the paper book wherein the letter dated 24.01.2019 and 14.02.2019 were filed wherein the specific requests for supplying the reasons have been made to the AO. The Ld A.R. finally drew our attention to page No.10 of the paper book dated 15.02.2019 addressed by the AO to the assessee wherein the reasons were supplied as recorded under section 148(2) of the Act. The Ld. A.R. vehemently submitted before the Bench that since the AO has failed to supply reasons to the assessee during the assessment proceedings or during the proceedings before the Ld. CIT(A), therefore assessment as framed by the AO under section 143(3) read with section 147 of the Act is invalid and void ab initio. In defence of his arguments, the Ld. A.R. relied on a series of decisions namely; (1) CIT vs. Videsh Sanchar Ltd. (2012) 340 ITR 66 (Bom.) (2) Pr. CIT vs. V. Ramaiah (2019) 103 taxmann.com 202 (SC) (3) ITO vs. Rishi Godani (2018) 97 taxmann.com 135 (Agra-Trib.) (4) Rina S. Mehta vs. DCIT in ITA No.3120/M/2015

4 ITA No.5998/M/2017 CO No.225/M/2018 M/s. Pallavi Vijen Jhaveri 7. The Ld. A.R. prayed before the Bench that even Hon’ble Supreme Court in the case of Pr. CIT vs. V. Ramaiah has dismissed the SLP filed by the Revenue against the decision of the Hon’ble High Court wherein the High Court has upheld the order of Tribunal upholding that non communication of reasons recorded for re-opening the assessment did not amount to a mere procedural lapse and thus upheld the quashing the reassessment order by the Tribunal. The Ld. A.R., therefore, prayed before the Bench that the order passed by the AO under section 143(3) read with section 147 may kindly be quashed as invalid and nullity in the eyes of law. The DR on the other hand relied submitted that assessment was rightly re-opened by the AO after recording the reasons to believe and relied heavily relied on the orders of authorities below. 8. After hearing both the parties and perusing the material on record, we observe that the reasons recorded by the AO for initiating reassessment proceedings under section 147 of the Act though but the same were not supplied to the assessee despite repeated written requests/communications which have been referred to above. We note from the records that assessee has requested on 21.04.2014, 24.01.2019 and 14.02.2019 to the AO to supply the reasons recorded which were supplied by the AO only during the pendency of appeal proceedings before the Tribunal on 15.02.2019. Thus the assessee is deprived of filing the objections to the reassessment proceedings during the assessment proceedings. Under these circumstances, we are not in a position to uphold the assessment order on the ground of non furnishing of reasons to the assessee till the completion of assessment. In the case of CIT vs. Videsh Sanchar Ltd. (supra) the Hon’ble Bombay High Court has held that

5 ITA No.5998/M/2017 CO No.225/M/2018 M/s. Pallavi Vijen Jhaveri reassessment is not valid where the reasons recorded under section 148(2) of the Act for reopening the reassessment was not furnished to the assessee before the completion of assessment. Similarly, the Hon'ble Apex Court in the case of Pr. CIT vs. V. Ramaiah (supra) has dismissed the SLP filed by the Revenue against the decision of High Court wherein the Hon’ble Bombay High Court has upheld the order of the Tribunal wherein the Tribunal has quashed the reassessment order on the ground of non supplying the reasons for reopening to the assessee. Under these circumstances, we are inclined to quash the reassessment order framed under section 143(3) read with section 147 of the Act and consequently the cross objection filed by the assessee is allowed.

Mumbai, Dated: 17.12.2019. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [ By Order Dy/Asstt. Registrar, ITAT, Mumbai.