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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
ORDER PER N.K. PRADHAN, A.M This is an appeal filed by the assessee. The relevant assessment year is 2008-09. The appeal is directed against the order of the CIT(A)-3, Mumbai and arises out of the assessment completed u/s 143(3) r.w.s. 147 of the Income Tax Act 1961 (‘the Act’).
There has been a delay of 20 days in filing the appeal by the assessee. We have gone through the affidavit filed by the assessee and find that she had genuine difficulties in filing the appeal in time. Therefore, we condone the delay of 20 days in filing the appeal.
Alongwith Form No. 36, the assessee has filed on 11.02.2013, five effective grounds of appeal. Then she filed an application on 22.09.2015 for admission of an additional ground of appeal. We shall discuss below the said issue as it has a bearing on the present appeal.
4. Briefly stated the facts are that the assessee filed her return of income for the A.Y. 2008-09 on 30.09.2008 declaring total income at Rs.15,92,280/-. It was processed by the AO u/s 143(1) on 1.09.2009 accepting the same. Subsequently, the AO reopened the assessment u/s 147 by issuing notice u/s 148 dated 14.02.2011 which was served on the assessee on 20.02.2011. In response to notice u/s 148, the assessee filed revised return income on 29.11.2011 declaring total income at Rs.25,72,866/-. Subsequently the assessee filed revised computation on 27.12.2012 revising her total income at Rs.24,99,866/- . In the additional ground it is submitted by the assessee that in the assessment order passed by the AO u/s 143(3) r.w.s. 147 dated 28.12.2011, there is no whisper about the reason recorded for reopening the assessment. The assessee submits that the additonal ground raised may be admitted as they are purely legal grounds, which go to the root of the matter. It has also been stated by the assessee that she failed to raise the above legal ground earlier.
5. We have carefully considered the matter. We find that reasons recorded for reopening the assessment fall in the realm legal grounds which go to the root of the matter and relying on the decision in the case of Jute Corporation of India Ltd. vs. CIT 187 ITR 688 (SC); CIT vs. NTPC Ltd. 229 ITR 383 (SC) and Ahmedabad Electricity Co. Ltd. vs. CIT 199 ITR 351 (Bom), we admit the additional grounds.
6. As the additional ground raised by the assessee has a bearing on the issue at hand, we shall discuss it first. We have gone through the assessment order passed by the AO u/s 143(3) r.w.s. 147 of the Act on 28.12.2011. We find that the AO has not mentioned in the assessment order reasons for reopening. During the course of assessment proceedings, the AR of the assessee filed letter dated 1.08.2011 before the AO requesting to furnish the copy of the reasons. The said letter filed by the AR of the assessee was received in the office of the AO on 2.08.2011 as is evident from the office seal of ITO 11(1)(3), Mumbai . Then the assessee filed five letters before the AO with copies to Addl. CIT and Pr. CIT requesting to provide copy of notice u/s 148 and reasons recorded before reopening the assessment. The AO failed to give the same to the assessee. The AO , in response to the letter dated 18.07.2016 of Sr. AR , informed the CIT(DR) on 18.07. 2016 in writing that his office tried to locate “reasons for reopening” in case records. However, he could not find the same and expressed his inability to provide the same.
7. Having heard the rival submission and perused the relevant material on record, we find that in response to notice u/s 148, the assessee filed revised return of income on 29.11.2011 declaring total income at Rs.25,72,866/-. We also find that the assessee has written number of letters to the AO requesting him to furnish copy of the notice issued u/s 148 for the A.Y. 2008-09 and reasons for reopening the assessment so that these documents could help her in prosecuting the appeals before the ITAT. The AO failed to provide the above documents to the assessee. The assumption of jurisdiction depends upon the existence of reasons followed by communication thereof to the assessee if the notice is challenged. The AO cannot proceed the assessment u/s 147 unless reasons are communicated. It has been held so in the case of Berger Paints India Ltd. vs. Asstt. CIT (2004) 266 ITR 462, 469 (Cal) & Sohan Lal Singhania vs. ITO (1992) 194 ITR 519, 520-21 (All).
8. Respectfully following the above decisions, we come to a finding that the reassessment proceeding based on the notice issued under section 148 without recording reasons and communicating them to the assessee is bad in law. We, therefore, set aside the findings of the ld. CIT(A) and quash the re-assessment order made by the AO under section 147 r.w.s 148 of the Act.
As we have quashed the reassessment order, we do not find it necessary to go into the merit of the case.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court 23/09/2016