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Commissioner of Income Tax Versus M/s Trend Electronics

2015 (9) TMI 1119 - BOMBAY HIGH COURT

Reopening of assessment - Held that:- In the absence of reasons being furnished, when sought for would make an order passed on reassessment bad in law. The recording of reasons (which has been done in this case) and furnishing of the same has to be strictly complied with as it is a jurisdictional issue. This requirement is very salutary as it not only ensures reopening notices are not lightly issued. Besides in case the same have been issued on some misunderstanding/misconception, the assessee i .....

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ority concerned and no question of knowledge being attributed on the basis of implication can arise. We also do not appreciate the stand of the revenue, that the respondent-assessee had asked for reasons recorded only once and therefore seeking to justify non-furnishing of reasons. We expect the state to act more responsibly. - INCOME TAX APPEAL NO. 1867 OF 2013 - Dated:- 16-9-2015 - M.S. SANKLECHA AND G.S. KULKARNI, JJ. For The Appellant : Mr. Arvind Pinto, Advocate For The Respondent : Mr. P.J .....

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Apex Court in GNK Driveshafts (India) Ltd. Vs. ITO 259 ITR 19 (SC) when the facts are contrary to the facts of the instant case? 2) Whether on the facts and in the circumstances of the case and in law, the Tribunal had ignored the fact that in the proceedings before the AO in subsequent hearings prior to assessment, the firm had neither sought for the reasons recorded, since by interference, they were already aware of the same? 3. The respondent-assessee filed it's return of income for the A .....

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ect of notice dated 26 March 2010 under Section 148 of the Act. The Assessing Officer by letter dated 29 April 2010 directed the respondent-assessee to file it's return of income and also informed the respondent-assessee that the reasons would be furnished after the return of income is filed. The respondent-assessee thereafter by letter dated 7 May 2010 informed the Assessing Officer that return of income filed on 29 September 2008 under Section 139 of the Act be treated as the return of inc .....

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confirmed the action of the Assessing Officer and order dated 30 December 2010. 6. A further appeal was preferred by the respondent to the Tribunal. The impugned order of the Tribunal records the undisputed fact that the respondent-assessee had sought for reasons for reopening notice dated 26 March 2010 from the Assessing Officer. The reasons were admittedly not furnished to the respondentassesee before the completion of the reassessment proceedings. The impugned order places reliance upon the .....

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ment proceedings would make the reassessment order passed in pursuance of such a notice bad in law. In the above circumstances, the appeal of the respondent-assessee was allowed by the Tribunal. 7. Mr. Pinto, the learned Counsel for the revenue submits that the respondent-assessee had only asked for reasons once and did not further ask for reasons. Further he submits that as the respondent-assessee had participated in the proceedings before the Assessing Officer, it must be implied that reasons .....

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sment under the Act is an exceptional power and whenever revenue seeks to exercise such power, they must strictly comply with the prerequisite conditions viz. Reopening of reasons to indicate that the Assessing Officer had reason to believe that income chargeable to tax has escaped assessment which would warrant the reopening of an assessment. These recorded reasons as laid down by the Apex Court must be furnished to the assessee when sought for so as to enable the assessee to object to the same .....

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