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TMI Blog2016 (5) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... g not provided. The date of recording the reason is also not known. The recording of reason should be prior to the date issue of notice u/s.148." II. On merits: 3. The Ld. CIT(A) erred in upholding the order of Assessing officer treating the receipt of Rs. 6 crores on account of transfer of trade mark çuticora' as 'sale of business' and taxing the same as capital gain. 4. The Learned CIT(A) failed to appreciate that the transfer of trade mark was before 31.03.2001 i.e. prior to the amendment in sec. 55(2) of the Act and that the said receipt is exempt from tax. 2. The arguments have been made by Dr. K. Shivaram & Miss Neelam Jadhav, Authorized Representative (in short 'AR'), on behalf of the assessee and Shri Vachaspati Tripathi Departmental Representative (in short 'DR'), on behalf of the Revenue. 3. Ground No. I (2): In this ground, Ld. Counsel has challenged the reopening of the assessment and framing of the impugned reassessment order, firstly on the ground that reasons have not been recorded, much less in accordance with law and certified copy of the same has not been provided to the assessee, during the course of reassessment proceedings, despite the specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of CIT v. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (Bom.), Tata International Ltd. Vs. DCIT [2012] 52 SOT 465 (Mum)., Synopsys International vs. DDIT ITA no.549/Bang/2011 dt. 10.12.2012 (Bang.)(Trib.), CIT vs. Rajindra Roshin & Turpentine Industries (2008) 305 ITR 161 (P&H) (162) and Rajoo Engg. vs Dy. CIT (2008) 218 CTR 53(Guj). It was thus argued that the reopening is without mandate of law and resultant reassessment order is null and void and should be held as such. 3.2 On the other hand, Ld. DR has placed reliance on the affidavit filed by the department. It has been submitted by the Ld. DR that admittedly no 'Reasons' are available in the assessment record, but copy of same is available in the computer. It has been further submitted that during the course of assessment proceedings, the relevant issue was discussed with the counsel by the AO, which would be evident from this fact that the assessee has submitted reply on the merits of the issue involved, and therefore, it can be presumed that assessee was communicated the gist of the issues involved in the Reasons, on the basis of which reopening was done by the AO. It was further submitted that the 'Reasons' might h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Learned CIT DR is present for revenue. Shri. K. Shivram. Learned counsel is present for the assessee. In this case, learned CIT. DR was directed by the Bench at the time of hearing fixed on 4.1.2011 to produce the reasons recorded by the A.O. for reopening the assessment by the next date of hearing fixed on 10.1.2011. Although, the learned CIT DR produced the assessment record on 10.1.2011, he could not produce any document evidencing the recording of reasons by the A.O. He, however, sought sometime to comply with the direction given by the Bench on 4.1.2011. The learned CIT, DR now submits that even though there are no reasons recoded by the A.O. in writing available on records, the same are available on computer as informed by the A.O. He submits that the department is in a position to file a print out of the same taken from computer in compliance with the direction of the tribunal. Keeping in view this new stand taken by the learned CIT DR which was not taken earlier and having regard to the fact that reasons recorded by the A.O. are not available in the assessment record, we direct the learned CIT DR to f i le an af f idavi t of the concerned A.O. stat ing al l the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and the contents of the same are also reproduced for the sake of ready reference: "AFFIDAVIT IN REPLY I Mr. Utsav Dhupelia aged about 67 years, director of the M/s Muller and Phipps India Ltd having office at Ground Floor, Unique Industrial Estate, off Veer Savarkar Marg, Prabhadevi, Mumbai-400025 do hereby state as solemnly affirmation as under: 1. I have perused the affidavit of Shri Mudit Srivastava DCIT-2(2) Mumbai dated 12-2-2014. 2. At the outset I state that the affidavit filed by the Ld. DCIT is a self serving document and hence cannot be taken on record in order to prove recording of reasons at the time of reopening of assessment. The section 148 of the Act does not recognize such recording of reasons on computer without there being a copy available on assessment record. 3. As regard "para1", no comments is required. 4. As regard "para 2", I say that the handing over note to be produced in the or iginal f or the considerat ion of the Hon'ble Bench. 5. I further say that whether the concerned of f icer has given such of f ice note in al l matters or only in the matter of the Mul lar and Phipps India Ltd, should be examined. 6. I say that 'pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nging the computed date settings. 13. I state that the alleged copy of reasons recorded dated 17.2.2006 enclosed in their affidavit, is not signed by Mr. S.C. Sarangi the then Asst. Comm. Of Income Tax Cir. 2(2), which is mandatory requirement of the law. Further, the assessment order is passed by Mr. Uday Hardikar, ITO 2(2)(2), Mumbai. 14. I am making this affidavit to put the true facts on records and whatever is stated in paras 1 to 13 are true and correct to best of my knowledge and belief. -sd- (Deponent) Solemnly affirmed at Mumbai This 17th day of May 2014" 3.7. Further, in response to the counter affidavit, the AO has given its comments by way of order dated 30th July 2014 and we find it appropriate to reproduce the same also, hereunder: "To, The CIT(DR) ITAT-XII, G Bench Mumbai Respected Madam, Sub: Comments on the Affidavit in Reply filed by the assessee in the case of M/s Muller & Phipps (1) Ltd. for AY 2001-02 - Reg. Kindly refer to the above matter. 2. Comments on the Affidavit in reply filed by the assessee dated 17.05.2014 during the proceedings before the Hon'ble ITAT in the above mentioned case are submitted as below: Para 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly stated in the Affidavit itself. Therefore, it is not a signed copy. Para 14: No comments are required. 3. Submitted for your kind consideration. 3. Submitted for your kind consideration. Yours faithfully, Sd/- (Saurabh Sharma) ACIT Circle 2(2), Mumbai" 3.8. Detailed arguments have been made by both the sides on the above said documents and also on various other documents placed in the paper books filed by both the sides. After analysing the whole factual situation, we find that at this stage, we need not go too much deeper into the allegations and counter allegations made by both the sides. We can decide this issue on the basis of those facts only on which there is consensus of both the parties. The undisputed facts, which emerge now after aforesaid exhaustive exercise, on which there is unanimity on the part of both the sides, are that, one- no 'Reasons' are available in the assessment record, and twothere is nothing on record to show that certified copy of verbatim 'Reasons' was ever provided to the assessee, despite the request made by the assessee before AO, more than once. In view of these facts, Ld. Counsel has vehemently argued that it clearly indicates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when sought for, so as to enable the assessee to object to the same, during the course of assessment proceeding. Thus, in absence of 'Reasons' provided by the AO to the assessee, the reassessment order shall be bad in law. The recording of 'Reasons' and furnishing of the same has to be strictly complied with, as it is a jurisdictional issue. This requirement is very salutary as it ensures that reopening is not done in a casual manner. In addition to that, in case reopening has been done on some misunderstanding/misconceptions, then, the assessee is given opportunity to point out that reasons to believe, as recorded in the 'Reasons', do not warrant reopening, before the assessment proceedings are commenced. The AO can dispose all these objections, and if satisfied with the objections, the impugned reopening notice issued u/s 148 of the Act can be withdrawn; otherwise it can be proceeded with further. In issues, such as this, where jurisdictional issue is involved, the same must be strictly complied with by the authority concerned. 3.10. Similar view has been reiterated by Hon'ble Karnataka High Court in the case of Kothari Metals (writ appeal no.218/2015, order dated 14th August 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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