S SESHUKUMAR,CHENNAI vs. ITO, SALARY WARD 1(2), CHENNAI

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ITA 534/CHNY/2019Status: DisposedITAT Chennai19 September 2019AY 2006-074 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that it is the Assessing Officer's duty to provide the assessee with the reasons for reopening the assessment. Since this was not done, the re-assessment order was set aside.

What were the facts?

The assessee challenged the validity of re-assessment proceedings, alleging that the reasons recorded for reopening the assessment were not provided. The Assessing Officer's response indicated that the reasons were discussed in the assessment order itself.

What were the issues?

Whether the re-assessment is valid when the reasons for reopening were not provided to the assessee, violating principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 148,Section 147

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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI GEORGE MATHAN & SHRI INTURI RAMA RAO

Hearing: 19.09.2019

PER GEORGE MATHAN, JUDICIAL MEMBER:

1.

This is an appeal filed by the assessee against the Order of the Commissioner of Income Tax (Appeals)-12, Chennai, in ITA No.71/C.I.T(A)-12/2014-15 dated 19.12.2018 for assessment year 2006-07.

2.

Mr.K.Balasurbarmanin represented on behalf of the Assessee and Mr.D.Divahar represented on behalf of the Revenue.

3.

It was submitted by the ld.AR that the assessee has challenged the validity of re-assessment in regard to reasons recorded have not been given to the assessee. The ld.AR placed before us a copy of reply given by the Assessing Officer vide letter dated 23.08.2019 in response to a letter of assessee dated 07.08.2019 requesting for the reasons recorded for the purpose of reopening by issue of notice u/s.148 of the Act. The reply of the letter of Assessing Officer dated 23.08.2019 is extracted herein below:-

“Sir,

Sub:Assessment order u/s.147-A.Y.2006-07-PAN APTPS 3100 D -reg Ref: your letter dated 07.08.2019 ***** Vide your letter in due reference. You have requested for issue of copy of reasons for re-opening of A.Y 2006-07 for submission before the I.T.A.T. In this connection, you are requested to refer the aso u/s.143(3) r.w.s.147 dated 25.03.2014 where in the reasons for re-opening was discussed. This is for your information. Yours faithfully,

Sd”/ITO CC2(1) Chennia.

It was submitted by ld.AR that as reasons recorded for re-opening of assessment have not been given to the assessee, the assessment is liable to be annulled.

4.

In reply, the ld.DR submitted that the assessee has not asked for reasons in the assessment proceedings. It was submitted that the reasons are also mentioned in the assessment order. Ld.D.R. vehemently supported the Orders of ld.Assessing Officer and the ld.CIT(A).

5.

We have heard the rival contentions and perused the material available on record. A perusal of the decision of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd v ITO [2003] 259 ITR 19 (SC) clearly shows that it is duty bound on the Assessing Officer to provide the assessee the reasons recorded for the purpose of reopening. The assessee is at liberty to reply to such reasons recorded and once such reply is received, the same is to be disposed of before proceedings with the assessment. A perusal of the reply given by the Assessing Officer in respect of the request made by the assessee for the reasons recorded clearly shows that evasive tactics are being adopted by the Assessing Officer. This is not what is expected from the hands of the Assessing Officer. This being so, as there is total violation of the decision of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd v ITO referred to supra, in the interest of natural justice, the re-assessment order passed by the Assessing Officer is set aside, and the issue raised in this appeal is restored to the file of Assessing Officer for re-adjudication after granting the assessee a copy of the reasons recorded for the purpose of reopening of the assessment. The Assessing Officer shall and will comply with the provisions of law as are expected of him.

6.

In the result, the appeal of assessee is partly allowed for statistical purposes.

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