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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABRAHAM P.GEORGE & SHRI GEORGE MATHAN
आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:
the Order of the Commissioner of Income Tax (Appeals)-2, Chennai, in dated 31.03.2017 for the AY 2006-07.
Shri N.Madhavan, ACIT represented on behalf of the Revenue and Shri T.Banusekar, CA, represented on behalf of the assessee.
ITA No.1372/Mds/2017 :- 2 -:
It was submitted by the Ld.AR that the assessee had filed return of income for the relevant AY 2006-07 on 28.08.2006 admitting a loss. It was a submission that the assessment came to be completed u/s.143(3) on 24.11.2008 accepting the returned income. It was a submission that the assessment came to be re-opened by issuance of notice u/s.148 on 28.03.2013. The assessee had requested for the copy of the reasons recorded. It was a submission that the reasons recorded have not been given to the assessee before the assessment was completed. The Ld.AR filed an Affidavit to the said effect that the reasons recorded for re- opening of the assessment had not been given until the completion of the assessment. In the Affidavit, assessee has mentioned the reasons recorded for the re-opening was given only in September, 2016 much after completion of the assessment. The Ld.AR drew our attention to the order of the Ld.CIT(A) at Page No.6 & 7 wherein the Ld.CIT(A) has mentioned that the instructions of the erstwhile AO instructing the ITI to convey the reasons for re-opening to the assessee has been produced.
This scanned copy of the letter was shown at Page No.6 of the order of the Ld.CIT(A). It was a submission that as the IT Inspector directed to grant the copies of the reasons recorded and the assessee has co-operated in the proceedings pertaining to the re-opening assessment and as the assessee has not raised any objection either stating that the reasons have not been communicated or coming out with any objections whatsoever to the re-opening itself in view of the provisions of Sec.292BB, the re- assessment was held to be valid. The Ld.AR submitted that no evidence
ITA No.1372/Mds/2017 :- 3 -: whatsoever having been produced to prove service of the reasons by the Revenue other than a noting on the letter of the assessee asking the IT Inspector to put up the reasons and convey the reasons, it was a submission that the reasons having not been given to the assessee before the completion of the assessment. In view of the decision of the Bombay High Court in the case of Videsh Sanchar Nigam Ltd. reported in 340 ITR 66 (Bom) wherein it has been held “reasons not furnished to the assessee till completion of the assessment – since the reasons recorded for the re- opening of the assessment were not furnished to the assessee till the completion of the assessment, the re-assessment order cannot be upheld – CIT v. Fomento Resorts & Hotels Ltd.”. The re-opening was liable to be annulled. He also relied upon the decision of the Hon’ble Bombay High Court in the case of IDBI Ltd., reported in (2016) 97 CCH 0021 MumHC.
He also relied upon the decision of the Co-ordinate Bench of this Tribunal, Hyderabad Bench, in the case of S.Prasad Raju reported in 96 TTJ 0832 and the Mumbai Bench in the case of Tata International Ltd. reported in 52 SOT 0465. The Ld.AR further submitted that the decision of the Hon’ble High Court of Madras in the case of M/s.Jayanthi Natarajan in WP No.1905/2017 dated 14.09.2017 has held in Para No.14 as follows:
Admittedly, in the instant case, this has not been done by the respondent, but the respondent seeks to sustain the impugned assessment order stating that in the first few paragraphs of the order, he has dealt with objections and disposed of accordingly. Unfortunately, the manner in which the respondent has decided the issue is wholly unsustainable in law. The purpose for passing a separate speaking order on the objections is with a view to afford an opportunity to the assessee to question such an order, if he is aggrieved. The respondent by passing the impugned order has taken away such valuable right from the petitioner inasmuch as the impugned proceedings is an order of assessment under Section 143(3) of the Act. Therefore, if an order of assessment has to be challenged, necessarily an appeal has to be preferred and only in rarest of rare case, Courts would entertain challenge to assessment orders in writ proceedings. Thus, the procedure adopted
ITA No.1372/Mds/2017 :- 4 -: by the respondent is completely flawed, which goes to the root of the matter, thereby, vitiates the entire proceedings.
It was a submission that the reasons recorded have not been given to the assessee, the valuable right of the assessee to object to the same itself has been violated. It was a submission that re-assessment was liable to be quashed.
In reply, the Ld.DR vehemently supported the order of the AO and the Ld.CIT(A). It was a submission that the IT Inspector had been directed to provide the reasons recorded and consequently, the same should have been provided.
We have considered the rival submissions. A perusal of the order of the Ld.CIT(A) clearly shows that the Ld.CIT(A) has attached the scanned copy of the letter of the assessee requesting for the reasons recorded for the purpose of re-opening on which it was mentioned that “ITI please put up and convey the reasons” and signed on 22/10. Admittedly, the notice u/s.148 dated 28.03.2013, the Assessment Order is dated 26.03.2014, one of the dates of hearing recorded in the Assessment Order is 22/10/2013. However, after 22/10/2013, the next date of hearing is 28.02.2014, after a gap of nearly four months. The Revenue has not been able to produce any evidence to show that the reasons recorded had been provided to the assessee as prayed for in its letter. This being so, respectfully following the decision of the Hon’ble Bombay High Court in the ITA No.1372/Mds/2017 :- 5 -:
case of Videsh Sanchar Nigam Ltd. as also the principles laid down by the Hon’ble Jurisdictional High Court in the case of M/s.Jayanthi Natarajan, we are of the view that the reasons recorded having not been given to the assessee before the completion of the assessment, the re-assessment is invalid and liable to be annulled and we do so. As we have decided the issue on technicality of re-opening, we are not going into the merits challenged in the appeal.
In the result, the appeal filed by the assessee is allowed.