SHARDA NIGAM,NEW DELHI vs. ITO WARD 59(2), NEW DELHI

This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals) [hereinafter referred to CIT (Appeals)]/National Faceless Appeal Centre (NFAC) dated 5.01.2023 for assessment year 2015-16.

The assessee has challenged the order of the NFAC on various grounds.

The Ld. Counsel for the assessee, at the outset, submits that ground No. 4 of grounds of appeal

On the other hand, Ld. DR placed reliance on the orders of the authorities below.

Heard on this preliminary jurisdictional issue. The assessee on receiving notice under section 148 of the Act vide letter dated 27.02.2021 which is placed at page 34 of the paper book requested the Assessing Officer to provide a copy of reason to believe income escaped which prompted the Assessing Officer to issue notice under section 148 of the Act and also requested to provide/furnish approval from higher authorities to issue notice under section 148 of the Act. Subsequently on 02nd July, 2021 the assessee once again requested the Assessing Officer to provide copy of approval of JCIT and copy of reason to believe escapement of income on the basis of which notice under section 148 was issued. Assessee also stated that this information is important to file reply to notice issued under section 148 of the Act and also to file objection against reason to believe i.e. re-opening of assessment. On 28.07.2021 the Assessing Officer provided information in respect of re-opening to the assessee. The assessee on receipt of the reasons which were not at all legible/ un-readable once again on 31st July, 2021 requested the Assessing Officer stating that the attached documents are not at all readable the attached documents defeat the purpose of opportunity of being heard and, therefore, requested either resend the readable documents on the basis of which case was re- opened or provide an opportunity to the authorized representative of the assessee to collect the documents in person so that proper objections could be filed for the reason to believe that the income escaped assessment. The assessee filed its objection for re-opening of assessment under section 148 of the Act on 28.09.2021 stating that the document supplied purportedly to be the reasons for re-opening of assessment were not legible at all. Therefore, the assessee could not exercise the right to file objection against the reasons formed to issue notice under section 148 of the Act. The assessee also stated in its objection that he has already requersted to either give reasons either by hand or provide legible/readable documents so that he can exercise right to file objection. It is noticed that without supplying the legible reasons the Assessing Officer passed draft assessment order on 26.09.2021 proposing addition of Rs.27,23,150/- under section 69C of the Act.

On appeal the ld. CIT (Appeals) addressed the issue stating that the Assessing Officer has recorded that the information was provided by the Assessing Officer once again on 28.07.2021 and again on 28.09.2021 and the documents requested for supply physically is not possible because of faceless assessment. The CIT (Appeals), therefore, was of the view that the detailed reply/submission filed by the appellant before the Assessing Officer denying the payment of any cash to CCPL for purchase of some commercial space in Red Mall, Ghaziabad, which shows that the issue of re-opening was very much in the knowledge of the appellant. Even before me the Revenue could not produce the signed legible / readable reasons, which was provided to the assessee. On perusal of the draft / final assessment order the CIT (Appeals)’s order it is noticed that the reasons said to have been recorded for re-opening of assessment were neither legible nor readable. It is also noticed that in spite of several requests the 4 Revenue did not provide legible and reasonable reasons to the assessee to file rebuttal. The procedure laid down by the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO (supra) have not been followed strictly making the reassessment bad in law. The reasons said to have been supplied to the assessee if it is neither legible nor readable it is as good as non-supply of the reasons to the assessee. The assessee filed return on 26.02.2021 and requested for reasons on 28.02.2021. Reminder was sent on 2.07.2021. The reasons said to have been furnished on 28.07.2021 and again on 20.08.2021. The assessee filed objections on 28.09.2021 making it clear that in the absence of legible and readable reasons for reopening the assessment the assessee is not in a position to file its objections for reopening the assessment. Immediately on 29.09.2021 the assessment was completed under section 143(3)/147/144B of the Act. It is not in dispute before me that the reasons said to have been supplied by the Revenue are neither legible nor readable. In the circumstances the reasons said to have been furnished are as good as no reasons furnished at all. Thus respectfully following the decision of the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO (supra) and the decision of the jurisdictional High Court in the case of PCIT Vs. Tupperware India Pvt. Ltd. [(2016) 236 taxmann.com 494] the reassessment order is quashed as bad in law. Since the assessment is quashed on the legal ground, I am not inclined to go into other legal grounds and also the grounds taken on merits as it would be of only academic at this stage.

In the result, the appeal of the assessee is partly allowed as indicated above. 5