TMI Blog2015 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ating re-assessment proceedings under Section 147 of the Act. The learned CIT (Appeals) observed that the Assessing Officer, however, has failed to furnish the assessee with a copy of the reasons so recorded and this failure on the part of the Assessing Officer, in our view, has prevented the assessee from filing his objections, if any, to the notice issued under Section 148 of the Act. This failure on the part of the Assessing Officer is in violation of the principles of natural justice - Decided in favour of assessee. - I.T.A. No.926/Bang/2014, C.O. No. 74/Bang/2015, I.T.A. No.927/Bang/2014, C.O. No. 75/Bang/2015 - - - Dated:- 9-10-2015 - SHRI VIJAYPAL RAO, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER For The Assessee : Shri V. Chandrashekar, Advocate. For The Respondent : Shri Anurag Sahay, CIT-III (D.R) ORDER Per Bench : These appeals by Revenue are directed against the order of the Commissioner of Income Tax (Appeals)-II, Bangalore dt.24.03.2014 in respect of Sri M.R. Seetharam (Indl) and M.R. Seetharam, HUF for Assessment Year 2004-05. The assessee's have also preferred Cross Objections ( C.O. in short) in respect of the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. However, from the records before us, it appears that the assessee was not provided with copy of the reasons recorded by the Assessing Officer for initiating re-assessment proceedings under Section 147 of the Act. The Assessing Officer concluded the reassessment proceedings under Section 143(3) rws 147 of the Act vide order dt.30.12.2011 wherein the income of the assessee was determined at ₹ 12,87,03,560; which included an addition of the said amount of ₹ 7,16,22,000 under Section 69A/69 of the Act. 3. Aggrieved by the order of assessment dt.30.12.2011 for Assessment Year 2004-05, the assessee preferred an appeal before the CIT (Appeals) II, Bangalore, challenging the said re-assessment order on various grounds, including challenging the validity of the said re-assessment order passed without supplying the assessee the reasons recorded by the Assessing Officer for initiation of re-assessment proceedings which were sought for by the assessee. The learned CIT (Appeals) allowed the assessee's appeal, by cancelling the re-assessment order passed under Section 143(3) rws 147 of the Act dt.30.12.2011 holding the same to be bad in law as the same was passed without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) II, Bangalore dt.24.3.2014 for Assessment Year 2004-05, which are as under :- 1. The order of the learned Commissioner of Income-tax [Appeals] in as far as it is against the Respondent / Cross Objector is opposed to law, facts, equity, and weight of evidence and circumstances of the case. 2. The order passed by the learned Commissioner of Income-tax [Appeals] is just and proper and the same requires to be upheld under the facts and circumstances of the case. 3. Without Prejudice to the learned Commissioner of Income-tax [Appeals] failed to adjudicate all the grounds raised by the Respondent / Cross Objector under the facts and circumstances of the case. 4. Without prejudice the order of re-assessment passed under section 147 of the Act is bad in law and void-ab-intio as the mandatory conditions to invoke the provision of section 147 did not exist and thereby issuing the notice under section 148 was not present under the facts and circumstances of the case. 5. Without prejudice if at all any reasons are recorded by the learned assessing officer, though the same was not furnished to the Respondent / Cross Objector the said reasons utmost may be conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has relied upon certain statements recorded without even putting the same to the Respondent / Cross Objector for his rebuttal. The Respondent / Cross Objector was entitled for cross examination which the same was denied by the learned Assessing Officer and the learned assessing officer proceeded to use the statement against the Respondent / Cross Objector without even giving an opportunity which is against the settled principles of law and thus the Order passed on such grave violation of principles of natural justice deserves to be cancelled on the facts and circumstances of the case. 13. Without Prejudice the learned Assessing Officer is not justified in law in charging the interest under section 234 A, 234 B and 234 C of the Act and further the calculation of interest under section 234 A, 234 B and 234 C of the Act is not in accordance with law since the rate, method of calculation, quantum is not discernable from the Order of assessment on the facts and circumstances of the case. 14. The Appellant craves leave to add, alter, delete, substitute or modify any of the grounds urged above. 15. For the above and other grounds that may be urged at the time of the hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of re-assessment proceedings under Section 147 of the Act and sought for vide his letter dt.26.4.2011, the assessee was well aware of the reasons for re-opening of the assessment for Assessment Year 2004-05 under Section 147 of the Act. The learned Departmental Representative contends that since the assessee was impliedly aware of the reasons recorded and had also participated and co-operated in the assessment proceedings, the non-supply to the assessee of the copy of reasons recorded by the Assessing Officer was not fatal to the re-assessment and the defect, if any, is covered by the provisions of Section 292BB of the Act. The learned Departmental Representative also placed reliance on the decision of the Hon'ble Allahabad High Court in the case of CIT V Shyam Cold Storage in ITA No.28/2011 in support of the contention that the provisions of Section 292BB of the Act cure the defect of non-supply of reasons. 7.2 We have carefully perused the contents of the copy of assessee's letter filed on 23.12.2011, placed before us and relied on by Revenue. We find that the above referred letter is merely written by the assessee as a reply to a questionnaire/requirement by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 following inter alia, the decisions of the Hon'ble Apex Court in G.K.N. Driveshaft (India) Ltd. (supra), the Hon'ble Allahabad High Court in the case of CIT V Shital Prasad Kharag Prasad (2006) 280 ITR 541, the co-ordinate benches of this Tribunal in the case of Synopsis International Ltd. (supra) and Suez Tractabel SA (supra), and of the Agra Bench of the ITAT in the case of ITO V Sikindar Lal Jain (45 SOT 113), etc; holding as under para 3.10 of the impugned order :- 3.10 The gist of the decisions of the Hon'ble Supreme Court in the case of GKN Driveshaft V. ITO (259 ITR 19), Hon'ble High Court of Allahabad in CIT V. Shital Prasad Kharag Prasad (280 ITR 541), Hon'ble ITAT, Bangalore in M/s. Synopsis International Ltd. V DDIT and M/s. Suez Tractable S.A. V. DDIT (supra), Hon'ble ITAT, Agra Bench in ITO V. Sikandar Lal Jain (45 SOT 113) is that it is imperative for the A.O. to furnish to an assessee the reasons for reopening the assessment under Section 147 of the Act if the assessee concerned asks for the same in writing and the failure on the part of the A.O. to furnish the reasons renders the assessment proceedings invalid and void ab initio. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.927/Bang/2014 and Assessee's C.O. No.75/Bang/2015. 9. The facts of the case, briefly, are as under :- 9.1 The assessee, HUF engaged in real estate, filed its return of income for Assessment Year 2004-05 on 12.1.2005 declaring total income of ₹ 11,83,431 and agricultural income of ₹ 2,00,000. The return was processed under Section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was taken up for scrutiny. The assessment was completed under Section 143(3) of the Act vide order dt.22.12.2006, wherein the income of the assessee was determined at ₹ 16,33,430. 9.2 A search under Section 132 of the Act was conducted in the case of one Sri Sohanraj as well as M/s. Mehta Associates, Bangalore on 10.10.2009 wherein it was found that Sri M.R. Seetharam was a partner in the above firm, which was the sole C F Agent of Manikchand Gutka for the State of Karnataka. As per information gathered in the search of the Sohanraj Group of cases, Sri M.R. Seetharam had received ₹ 7,16,22,000 in cash from these parties in the period relevant to Assessment Year 2004-05. In this regard, the Assessing Officer initiated re-assessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s letter filed on 23.12.2011 before the Assessing Officer. In coming to the finding she did, the learned CIT (Appeals), inter alia, relied on the following decisions of the co-ordinate bench in the cases of :- (i) Synopsis International Ltd. V DDIT in ITA No.549/Bang/2011 dt.10.12.2012; and (ii) Suez Tractabel SA V DDIT in ITA No.656/Bang/2009 dt.7.6.2013. 11.1 Aggrieved by the order of the CIT (Appeals) II, Bangalore dt.24.3.2014 for Assessment Year 2004-05, Revenue has preferred this appeal raising the following grounds :- 1. The order of the learned CIT (Appeals) is opposed to law and facts of the case. 2. On the facts and in the circumstances of the case the learned CIT (Appeals) erred in holding that the reassessment is bad in law because the assessee was not formally provided with the reason of reopening despite the fact that the assessee was very well aware of the reasons of reopening throughout the reassessment proceedings and the assessee had appeared co-operated in the reassessment proceedings and the same cannot be held bad in law as per the provisions of section 292BB. 3. For these and other grounds that may be urged at the time of hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case. 6. Without prejudice the Respondent / Cross Objector contends that no proper procedure has been followed by the learned assessing officer for issuance of notice under section 148 of the Act, as envisaged in the statute. 7. Without Prejudice the Respondent / Cross Objector contends that the process initiated and adopted as per section 148 of the Act by the learned assessing officer is bad in law as no proceedings can be initiated under section 148 if the information based on which the assessment is re-opened is pursuant to a search. 8. Without prejudice the Respondent / Cross Objector contends that no proper procedure has been followed by the learned assessing officer for issuance of a notice under the provisions of section 148 of the Act as envisaged under the statue under the facts and circumstances of the case. 9. Without Prejudice the Respondent / Cross objector denies himself liable to be taxed on a total income determined by the learned assessing officer of ₹ 7,28,05,431/- as against the reported income by the Respondent / Cross Objector of ₹ 11,83,431/- under the facts and circumstances of the case. 10. Without Prejudice the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Objections by the assessee. 13.1 Admittedly there is a delay of 4 days on the part of the assessee in filing the C.O. before the Tribunal. In this regard, along with the C.O., the assessee has filed an Affidavit dt.11.5.2015 sworn to before a Notary accompanied by the petition for condontation of the delay of 4 days in filing the C.O. before the Tribunal. It was submitted therein that the notice of Revenue s appeal which was received by the assessee on 7.4.2015 was misplaced by his staff. It is submitted that when the listing of Revenue s appeal was noticed by the assessee's counsel, enquiries revealed that the cross objection required to be filed has not yet been filed. It is prayed that the delay of 4 days be condoned as it as neither intentional nor willful or deliberate and the assessee would be put to great hardship if the same delay is not condoned. In support of the assessee's plea for condonation of delay in filing the C.O., the assessee placed reliance on the decision of the Hon'ble Apex Court in the following cases :- (i) Collector, Land Acquisition V MST Katiji Others (1987) 167 ITR 471. (ii) Concord of India Insurance Co. Ltd. (118 ITR 507). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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