TMI Blog2012 (12) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee filed the return of income declaring the income of ₹ 248.49 Cr (rounded off to nearest lakhs) and the same was subsequently revised and the total income as per the revised income is 259.71 Cr. Scrutiny assessment was completed determining the taxable income of ₹ 267.28 Cr. vide the assessment order dated 26.3.1996. The assessee is a public sector financial institution (PSFI) engaged in providing long term finance to industries for expansion and diversification. During the year, the assessee also engaged in the business of leasing out equipments and assets with as many as 25 parties and Gujarat Electricity Board is one of such parties. There was a search action u/s 132 of the Act and survey action u/s 133(A) of the Act in one of the major lessees namely M/s. Western Pacque India Limited (WPIL) and noticed various irregularities and such irregularity relates to the claim of depreciation on the leased assets. Thus, the AO initiated proceedings u/s 147 r.w.s. 148 of the Act and issued notice u/s 148 dt 9.12.1996. The reassessment was completed determining the total income at ₹ 272,48,51,396/-. Aggrieved with such order of the AO, assessee filed an appeal before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1993-1994. Further, referring to page 3 of the paper book ie assessee s letter dated 10.1.1997, Ld Counsel read out the assessee s request, asking the AO to supply him a copy of the reasons recorded by the AO for reopening the assessment of IDBI for the assessment year 1993-94. Further, bringing our attention to page 4 of the paper book ie assessee s letter dated 30.09.1998, the Ld Counsel read out stating the repeated requests of the assessee for want of copy of the reasons recorded by the AO. Ld Counsel read out from page 5 of the paper book ie assessee s letter dated 17.11.1998 once again requesting the revenue for the supply of the reasons recorded for reopening of the assessment. Thus, Ld Counsel made his point very clearly that there were repeated requests of the assessee to the AO for supplying a copy of the reasons recorded for reopening of the assessment by the AO before assuming the jurisdiction u/s 147 r.w.s. 148 of the Act. Further, Ld Counsel mentioned that it is an undisputed fact that the Assessing Officer did not supply the same to the assessee. It is a fact that the AO has not supplied the same to the assessee even before the completion of reassessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No.341/M/2004 dated 29.5.2006. Further, Ld Counsel relied on the Third Member decision in the case of M/s. Telco Dadajee Dhackjee Ltd vs. DCIT, ITA No.4613/Mum/2005, where the Third Member has given finding in para 6 and mentioned that when the AO failed to furnish the copy of the reasons recorded for reopening of the assessment despite the specific request, the reassessment order is liable to be quashed as null and void. Ld Counsel also mentioned that this aspect of quashing of such order is in existence since 1983, where the Hon ble Bombay High Court in the case of Siesta Steel Construction P. Ltd. vs. Shikare (K.K) [1985] 154 ITR 547 has held that Assessing Officer is bound to furnish the reasons recorded for reopening the assessment. By all the above summary of decisions, Ld Counsel made out his point by stating that the assessee made various requests for want of a copy of reasons recorded by the AO before assuming the jurisdiction u/s 147 r.w.s. 148 of the Act and the AO is under obligation to furnish the same and when such obligation has not discharged, the assessment made consequent to the notice u/s 148 becomes null and void. Therefore, the notice issued by the AO to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question and the answer is as under: -For the above point of difference, the Tribunal held that in the light of the binding judgment of the Panaji Bench of the Hon ble Bombay High Court (supra) and the order of the Tribunal in the case of Videsh Sanchar Nigam Ltd. (supra) and respectfully following the same, I hold that since the Assessing Officer did not furnish the reasons recorded for reopening the assessment to the assessee despite specific request, the reassessment order is liable to be quashed as null and void. The point of difference no.(ii) is answered accordingly. 2. In the case of Siesta Steel Construction P. Ltd. vs. Shikera (K.K.), Honble Bombay High Court [1985] 154 ITR 547 held that the reassessment proceedings are required to be quashed when the AO did not care to furnish the reasons to the assessee and relevant paragraphs read as under: .Shri Khari, Ld Counsel appearing on behalf of the petitioner, submitted that in spite of several reminders from the petitioner, respondent no.1 has not cared to furnish the reasons, which prompted respondent no.1 to issue notice under section 148 of the Act. ..The initiation of proceedings by respondent no.1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled that giving reasons in support of an order is part of complying with the principles of natural justice. In the light of that, no fault could be found with the order of the Ld ITAT and as such no substantial question of law arises as well. 5. Honble Tribunal of Hyderabad Bench has also held in the case of S. Prasad Raju vs. DCIT [2005] 96 TTJ (Hyd) 832 that,- Conclusion: Reasons for reopening of assessment having been not disclosed by the Department despite specific request by assessee, reopening was invalid. 8. Therefore, the above summary of Judgment of Jurisdictional High Court of Bombay and the other decisions of the Tribunal answers the question in favour of the assessee and against the revenue. Consequently, the consequences of failure to supply the reasons recorded u/s 148 of the Act to the assessee when asked for, the reassessment is required to the quashed. Considering the undisputed facts of repeated requests for supply of reasons by the assessee and the AO s blanket failure to supply the reasons recorded u/s 148 of the Act, the impugned reassessment is bad in law and the same is required to be quashed. Accordingly, ground no.1 raised by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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