2023 (1) TMI 833 - AT - Income Tax
Reopening of assessment u/s 147 - non supply of reasons by the AO - As argued Tangible material for reopening of the case and the reasons for reopening of assessment was not supplied - case was reopened on the basis of the information relating to purchase of DDA flat at Dwarka in auction conducted by the learned Receiver appointed by the Hon’ble High Court during the financial year 2010-11 - HELD THAT:- We find merit into the contention of the assessee that AO was required to supply reasons of reopening of assessment. The assessee has a legal right to file objections against the re-opening of assessment. Non supply of reasons deprived the assessee from this valuable legal right to raise objection against the reasons for reopening of assessment.
The issue relates to the assessment year 2011-12 and it would be too late to restore the matter for supply of reasons to the assessee.
Assessing Officer ought to have supplied the reasons. Reopening of assessment is not justified in the facts and circumstances of the present case. Since the action of AO is contrary to ratio laid down in the case of GKN Driveshafts (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT ] wherein it was clarified that when a notice under section 148 of the Income Tax Act is issued, the proper course for the noticee is to file return and if so desires, to seek reason for issuing notices. AO is bound to furnish reasons within a reasonable time. On receipt of reasons the noticee is entitled to file objections to issuance of notice and the AO is bound to dispose the same by passing a speaking order. Undisputedly, in the present case the reasons were not furnished to the assessee. Therefore, he could not file any objection. Under these facts, hereby set aside the impugned order. The grounds raised by the assessee are allowed.