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2013 (1) TMI 207 - ITAT MUMBAIReopening of assessment - assessee-company had sold goods to its subsidiary concern at price less than the cost of producing those goods and sold to the other parties - Held that:- Reasons disclosed by the AO do not set out as to what facts the assessee had failed to disclose fully and truly. Even a prima facie reference to the basis on which it was sought to be inferred that there was a failure to disclose all material facts had not been set out in the reasons. The primary jurisdictional requirement for reopening the assessment beyond a period of four years had not been fulfilled in the assessee's case. The reasons recorded by the AO and have found that except for the statement that there was omission on the part of the assessee to furnish the true and correct affairs of the company, there is nothing whatsoever in the reasons recorded to indicate the nature of the omission and as to which facts had not been truly and fully disclosed. If the AO had any reservation about the sale price of the goods sold to the group concerns, he should have questioned the genuineness of the transaction in the earlier AYs.i.e.1993-94 to 1995-96. All information regarding the sale by the assessee-company was before him. ‘Alleged under pricing of goods’ if any as mentioned in the order of 1997-98 and in the reopening orders cannot be termed non-disclosure of material facts by the assessee-company. Full and true facts of sale-price were made available to the AO who had passed orders for earlier years. If AO did not or could not draw particular inferences from the facts narrated in the returns of earlier AYs, then assessee cannot be accused of not disclosing full and true information - the said failure is apparently on the part of the AOs who had framed the assessments for AYs.1993-95 and had accepted the genuineness of the sale transactions entered in to by the assessee and sister concerns. Non-supply of reasons recorded by the AO to the assessee-company - Held that:- Awareness about the reasons recorded is totally different from supplying the copies of reasons to the assessee. FAA has admitted that it is no doubt true that appellant had requested for copy of the reasons recorded but this request was not repeated after that till filing of appeal before CIT(A). We fail to understand that why a request for supplying a copy of the reasons recorded should be repeated ? Only the AO knows why he preferred not to supply the copy of the reasons recorded, even after receiving a request form the assessee, though he chose to re-produced the same in the Assessment Order.In our opinion conduct of the AO was against the settled principles of justice - Thus reassessment completed without furnishing the reasons actually recorded by the AO for reopening of assessment is not sustainable in law because the A.O. is duty bound to supply the same within reasonable time as held in case of GKN Driveshafts (India) Ltd (2002 (11) TMI 7 - SUPREME COURT). In the case under consideration, AO had failed to furnish the reasons recorded for re-opening to the assessee within the reasonable time-prior to the completion of reassessment proceedings. Re-assessment order passed without supply of reasons, is invalid and cannot be sustained - appeals filed by the assessee-company allowed for all the three Assessment Years.
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