RBS EQUITIES (INDIA) LTD. (FORMERLY KNOWN AS ABN AMRO ASIA EQUITIES (I) LTD.),MUMBAI vs. D.C.I.T. RG.4(1), MUMBAI

The assessee has raised an additional ground raising the issue of wrong re- opening of the assessment u/s 147 r.w.s. 148 of the Act which was never raised before the lower authorities. The ld. AR for the assessee submitted that the issue raised in the additional ground being legal and emanated from the assessment records and therefore, the assessee was very much within its right to raise this issue notwithstanding the fact that it was raised for the first time, before this Hon’ble Bench. The ld. counsel for the assessee vehemently submitted before us and argued that the materials referred in the reasons recorded were never made available or supplied to the assessee including the statements of employees and therefore the assessee was never confronted with the materials used against it while framing the assessment order. The ld. counsel strongly relied on the decision of the apex court in the case of National Thermal Power Corporation Ltd Vs CIT 229 ITR 383 (S.C.) in defence of his arguments. The ld. counsel ultimately prayed that the matter be restored to the AO in the interest of justice and the AO be directed to decide the matter afresh after affording proper and reasonable opportunity to assessee.

Per contra , the Departmental representative strongly opposed the admission of additional ground challenging the re-opening of assessment u/s 147 r.w.s. 148 of the Act for the reasons that the same was never raised before the AO or CIT(A).The ld DR further submitted in defence of his arguments that the assessee was given

We have heard the rival submissions of the counsels of both the sides and perused the materials on records. We are confining our decision on the limited issue of additional ground raised by the assessee without going into merits of the case. The additional ground raised by the assessee is qua the re-opening of assessment u/s 147 r.w.s. 148 of the Act which was never raised either before the AO or CIT(A) and thus being raised for the first time before us. This is an legal issue arising and emanating from the assessment records and therefore the same is being admitted in view of Hon’ble apex court decision in the case of National Thermal Power Corporation Ltd Vs. CIT (supra). We find from the records before us that the assessee filed its return of income on 28.10.2004 declaring its income at Rs. 31,72,60,080/-. After processing the return u/s 143(1) of the act on 17.03.2005, the case was selected for scrutiny and the assessment was framed vide order dated 28.12.2006 at Rs. 35,41,34,680/- which was agitated before the CIT(A) and the appeal of the assessee was partly allowed.

The assessment was re-opened u/s147 r.w.s. 148 of the Act after recording reasons u/s 148(2) of the Act and due notice u/s 148 of the Act was issued and served upon the assessee. The copy of reasons recorded for issuing notice u/s 148 of the Act was supplied to the assessee and the same was replied by the assessee but never challenging the re-opening the assessment. It has been argued by the AR that the statements relied on by the revenue for re-opening the case of the assessee were never supplied to the assessee and therefore he strongly pleaded before us to send the case back to AO. We observe from the records and arguments of the ld. AR that statements/materials relied to re-open the case was never supplied to the assessee. We therefore, restore the matter to the file of the AO with the direction to supply the materials used such as statement of the employee used for recording reason and to issue notice u/s 148 of the Act to the assessee and decide the matter afresh after affording proper and reasonable opportunity to the assessee which in our opinion would meet the interest of justice. In result the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 3rd February, 2016