TMI Blog2012 (7) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Accordingly, we set aside the reassessments for all 3 years under consideration being invalid - Decided in favor of assessee. - I .T.A. Nos. 3359 to 3361/Mum/2009 - - - Dated:- 29-6-2012 - SHRI G E VEERABHADRAPPA, SHRI VIJAY PAL RAO, JJ. Appellant by : Sh Dinesh Vyas Respondent by : Sh Jay Kumar ORDER PER : VIJAY PAL RAO, JM These 3 appeals by the assessee are directed against 3 separate orders of Commissioner of Income Tax (Appeals) all dated 27.2.2009 for the assessment years 2000-01, 2001 02 and 2002 03 respectively. 2 The assessee has raised common grounds in these appeals; therefore, the concise grounds raised for the assessment year 2000-01 are reproduced as under: 1. The ld Commissioner of Income Tax(Appeals)) erred in upholding the validity of (i) the reopening, purportedly under Section 147,, the appellant s assessment u/s 1543(3) dated 27th March 2003 and (ii) the making of the Reassessment Order, and in not accepting the several challenges to the reassessment proceedings raised before him (and more specifically referred to in the original grounds of appeal urged before this Hon ble Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umber 1 regarding validity of reopening assessment: 3.1 The original assessment for all 3 years was completed under section 143 (3). Subsequently, as per the CBDT information, the Assessing Officer noted that during the year under consideration the assessee supplied goods to Iraq under the Scheme called Oil for Food Programme of the UNO . The name of the assessee had appeared at Sl. No. 113 of the Volcker Committee report submitted on 27.10. 2005 wherein it was mentioned that the commission paid was illegal. The Assessing Officer issued a notice under section 148 of the I T Act dated 31.01.2007. In response to the notice, the assessee submitted a letter dated 8.3.2007 and requested to furnish the reasons for issuing the said notice in view of the decision of Hon ble Supreme Court in case of GKN Drivershafts (India) Ltd vs ITO reported in 259 ITR 19. Thereafter, the Assessing Officer issued a fresh notice under section 148 dated 28.03. 2007 along with a covering letter dated 28.3.2007 stating that the earlier notice dated 31.1.2007 may be treated as cancelled for technical . 3.2 In response to the notice under section 148 dated 28.03.2007, the assessee again demanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 was withdrawn and cancelled. He has pointed out that once the notice dated 31.1.2007 was withdrawn, the second notice dated 28.3.2007 is not sustainable in the absence of the reasons recorded by the Assessing Officer. 5.1 He has further contended that even otherwise the case falls under the proviso to section 147 of the I T Act and it is mandatory condition for reopening of assessment that assessee has failed to disclose fully and truly all material facts necessary for assessment. He has referred the reply of the assessee dated 8.3.2007 to the notice under section 148 dated 31.1.2007 and submitted that the assessee had specifically demanded and requested to furnish the reasons for reopening. The ld Sr counsel referred the entire correspondence between the assessee and the Assessing Officer and submitted that the assessee has repeatedly requested the Assessing Officer to supply the reasons actually recorded by the Assessing Officer in terms of section 148 (2) of the I T Act. The Sr counsel then referred the letter dated 28.6.2007 of the Assessing Officer whereby the gist of the reasons were supplied to the assessee and submitted that the assessee was not supplied full rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 115. 5.7 On the other hand the ld DR has submitted that the Assessing Officer has duly recorded the reasons prior to issue of notice under section 148. He has filed a copy of reasons recorded on 31.01.2007 for reopening of the assessment and submitted that in the gist of reasons supplied to the assessee, nothing material has been left. He has further submitted that it is to be seen that what material part of regions was left or any deviation from the reasons original recorded and those supplied to the assessee. The ld DR has further submitted that the assessments have been reopened on the basis of information received from the CBDT. 5.8 The ld DR has referred the decision of Hon ble Supreme Court in case of GKN Driveshaft (India) Ltd vs ITO(supra) wherein the Hon ble Apex Court has held that the Assessing Officer is bound to furnish reasons within a reasonable time and after receipt of the reasons, the assessee is entitled to file objection of issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. Thus the ld DR has submitted that when the substantial reasons were furnished by the Assessing Officer, than the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant material on record. We have also carefully perused the various decisions relied upon by the parties. Though the arguments from both sides were also addressed on the merits of the issue; however, at this stage, we confined ourselves to the issue of validity of reopened assessment. 6.1 As we have noted above that initially the Assessing Officer issued a notice under section 148 dated 31.1.2007. The said notice was cancelled/withdrawn and a fresh notice under section 148 was issued on 28/03/2007. The assessing officer has given the reasons of treating the said notice dated 31/01/2007 as cancelled for technical reasons and fresh notice was issued to rectify the procedural lacuna in the earlier notice dated 31/01/2007. Though nothing has been elaborated either in the communication dated 28/03/2007 or in the reassessment order as what was the technical reason and a procedural lacuna in the earlier notice however, it appears from the record that the earlier notice dated 31/01/2007 was issued prior to the approval of the Commissioner of income tax dated 26/03/2007 and therefore, the earlier notice was cancelled and treated as withdrawn. The Assessing Officer, than obtained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 specifically requested the Assessing Officer to furnish the reasons for issuing the notice under section 148. The averments made in paragraph 3 of the said letter are as under: We also take this opportunity to renew our request to you to furnish to us the reason(s) for issue by you of your said notice under section 148 dated 31st Jan 2007 and of the fresh notice, in accordance with the procedure laid down by the Supreme Court in GKN Driveshafts (India) Ltd v ITO (2003)259 ITR 19(SC). 6.4 In pursuant to the said request of the assessee the Assessing Officer has supplied the gist of the reasons of reopening vide letter dated 28/06/2007 as under: Vide the above referred letter wherein we have requested that the reasons for Issue of the said notice dated 28.03.2007 be furnished in accordance with the procedure laid down in the case of GKN Driveshafts (I) Ltd. Vs. ITO [2003] 259 ITR 19 (SC). The gist of the reason for reopening is as under During the year under consideration, the assessee company has supplied \ goods to Iraq under the scheme Oil for Food Programme of the UNO . The name of the assessee company appears at Sr.No. 113 of the Voicker Committee Report sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer for reopening of the assessment. 8 In the case of CIT vs Videsh Sanchar Nigam Ltd, the Hon ble jurisdictional High Court has confirmed the order of this Tribunal whereby the reassessment was held as invalid because the reasons recorded for reopening of the assessment were not furnished despite repeated requests and furnished only after completion of assessment. The Hon ble High Court has observed in para to as under: 2 The fining of fact recorded by the Income Tax Appellate Tribunal is that in the present case the reasons recorded for reopening of the assessment through repeatedly asked by the assessee were furnished only after completion of the assessment. The Tribunal following the judgment of this Court in the case of CIT vs Fomento Resorts Hotels Ltd, Income Tax Appeal no.71 of 2006 decided on 27th November 2006 has held that though the reopening of the assessment is within three years from the end of relevant assessment year, since the reasons recorded for reopening of the assessment were not furnished to the assessee till the completion of assessment, the reassessment order cannot be upheld. Moreover, Special leave Petition filed by the revenue against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee. it is an undisputed fact that the Assessing Officer, in the present case has not supplied reasons to the assessee, therefore, the notice issued by the Assessing Officer is bad in law and consequently the assessment made in pursuance of such notice is liable to be quashed. In this view of the matter, we cancel the impugned assessment. We order accordingly. 9 The order of this Tribunal was upheld by the Hon ble jurisdictional High Court as mentioned in the decision in the case of Videsh Sanchar Nigam Ltd (Supra). Even the SLP filed by the revenue against the decision of Hon ble jurisdictional High Court has also been dismissed by the Hon ble Supreme Court vide order dated 16 July 2007. Thus, it is settled proposition as laid down by the Hon ble Supreme Court as well as Hon ble High Court that the reasons as recorded by the Assessing Officer are required to be furnished to the assessee and the reasons recorded cannot be improved upon or amended by any correspondence, letters etc. It is an undisputed fact that the reasons actually recorded by the Assessing Officer were not furnished to the assessee till 14.06.20012 despite repeated requests and demands and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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