JIYO G. LALWANI,MUMBAI vs. ITO WD 23(2)(3), MUMBAI

The first ground raised by the assessee is regarding validity of re- opening u/s 147 of the Act. It has been argued by the ld. counsel at the outset that reasons were not provided during the course of the assessment proceedings and these have been provided during the course of hearing before the Tribunal for the first time in pursuance of the directions of the Bench given on an earlier date. It was submitted that in view of this difficulty, the objections to the validity of the „Reasons‟ recorded could not be submitted to the AO and therefore, this matter may be sent back to the AO for filing requisite objections to re-opening. On the other hand, the ld. DR supported the orders of the lower authorities. However, both the parties agreed during the course of the hearing that this matter may be sent back to the file of the AO for following the due procedure as per law.

We have heard both the parties and gone through the orders of the lower authorities. The admitted position is that the „Reasons‟ were not provided to the assessee during the course of the assessment proceedings and these have been provided now for the first time. Under such circumstances, the assessee was not able to file his objections to the re-opening before the AO. Under these circumstances, both the parties agreed that this matter may be sent back to the file of the AO so that the mandate of the law, as declared by the Hon‟ble Supreme Court in the case of GKN Driveshaft (India) Ltd., 259 ITR 19 (SC) could be followed. Under these circumstances, we find it appropriate to send all the grounds raised before us back to the file of the AO. The assessee shall file his objections with regard to the re-opening to the AO. The AO shall dispose of these objections by a speaking order before proceeding for re-assessment proceedings, if he found so fit in his decision on the objections raised by the assessee. Requisite opportunity of hearing shall be given to the assesee for filing requisite details and documents as may be required by the AO or as may be considered appropriate by the assessee as per law and facts. The assessee is free to raise all the legal and factual issues before the AO. As a result, the appeal is treated as partly allowed for statistical purposes.

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