TMI Blog2021 (3) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... t reasons were disclosed to the assessee during reassessment proceedings. CIT(A) in his findings did not mention anything specifically whether copy of the reason and satisfaction has been provided to the assessee by any of the Assessing Officer. Thus, the impugned order is silent as to when copy of the reasons and satisfaction were supplied to the assessee on making a demand by the assessee in writing. In order to verify this fact, Ld. DR was directed to file copy of the order sheet or any other document from record to show that actually copy of the reasons recorded for reassessment and satisfaction u/s 151 have been supplied to the assessee at reassessment proceedings. However, till date Ld. DR did not produce any evidence in this regard. Therefore, considering the totality of the facts and circumstances, it is clear that assessee was not provided copy of the reasons recorded for reopening of the assessment and satisfaction u/s 151 of the Act despite demand is made by the assessee in writing before AO. The assessee is thus, precluded from raising objection against reopening of the assessment at assessment proceedings. The valuable right of the assessee has been denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Assessee has been directed against the Order of the Ld. CIT(A)-16, New Delhi, Dated 07.01.2019, for the A.Y. 2010-2011, on the following grounds : 1. The Ld CIT(A) has erred both in law and in facts of the case in upholding the reassessment proceedings and consequential reassessment order on the ground that impugned reassessment order has been passed without providing copy of reasons recorded along with satisfaction note of approving authority u/s 151 of IT Act despite specific request made by the appellant during assessment proceedings. Therefore, the resultant order of reassessment is non-est and need to be quashed. 2. The impugned reassessment is invalid and without jurisdiction as the said assessment is completed without complying with legal requirements of the provisions of section 147/148 of the Income Tax Act therefore such assessment is void ab initio and liable to be quashed. 3. The Ld. CIT(A) has erred both in law and circumstances of the case in upholding the reassessment proceedings initiated u/s 147 of the IT Act without application, of mind on the material, if any, provided by the Inv. Wing of the department. In view of the above defects in the compli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother [2016] 389 ITR 326 [P H] considering the Judgment of Hon ble Supreme Court in the case of National Thermal Power Co. Ltd., vs., CIT [1998] 229 ITR 383 (SC) held as under : Held, that the Tribunal could decide the appeal on a ground neither taken in the memorandum of appeal nor by seeking its leave. The only requirement was that the Tribunal could not rest its decision on any other ground unless the party who might be affected had sufficient opportunity of being heard on that ground. Therefore, the Tribunal ought to have exercised its discretion in view of the fact that the assessee intended raising only a legal argument without reference to any disputed questions of fact. Since there were no additional evidence required for the decision on the new ground raised by the assessee and such question arose from the facts which were already on the record of the assessment proceedings and since a decision upon the new ground raised by the assessee would only help in determining the assessee's correct tax liability, the matter could be remanded to the Tribunal for adjudicating upon the additional ground on its merits. [Matter remanded]. 5.1. We also find that the Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot seen disclosed by the assessee Therefore, I have reasons to believe that the income of the assessee to the extent of ₹ 58,40,171/- approximate for A. Y 2010-11 has escaped assessment and hence it is a fit case for initiation of proceedings in terms of section 147 of the I.T. Act,1916. 3. It is pertinent to mention that in the case of CIT Vs., Nova Promoters Fin Lease Private Ltd [ ITA No. 342 of 2011 ] dated 15.02.2012, the Hon'ble Delhi High Court which is the jurisdiction High court, has held that as long as there is a ' live link' between the document/information which was placed before the assessing officer at the time when reasons for reopening were recorded, proceedings u/s 147 would be valid. The court also held we are aware of the legal position that at the stage of issuing the notice u/s 148 the merits of the matter are not relevant and the assessing officer at that stage is required to form only a prima facie before or opinion that income chargeable to tax has escaped assessment'' 4. Further more, in the case of Jyoti GoyaI vs ITO ( ITA.No.1259/Del/2010), the Hon'ble ITAT Delhi held that : As regards the order conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial year relevant to assessment year under appeal. Since the assessee failed to explain the source of the same, therefore, A.O. made addition of ₹ 30,74,006/-. The challenged the reopening of the assessment before the Ld. CIT(A) and submissions of the assessee were forwarded to the A.O. who has filed the remand report which is also noted in the impugned order. The Ld. CIT(A), however, dismissed the appeal of assessee. 7. Both the parties argued on various issues which we decide as under: 7.1 Issue No. 1: Whether AO has supplied copy of the reasons recorded u/s 148 of the I.T. Act? 7.2 Ld. Counsel for assessee submitted that assessee vide letter dated 01.05.2017 acknowledged on 03.05.2017 (PB1) requested the AO to provide copy of the reasons recorded, performa for obtaining sanction u/s 151 and evidence of satisfaction given by the authority u/s 151 of the Act. The AO acknowledged this fact in the remand report dated 28.11.2018 (PB 40). The assessment was completed without providing the above documents. The AO was under obligation to provide reasons in view of the decision of the Supreme Court in the case of GKN Driveshaft India Ltd. Vs. ITO 259 ITR 19, judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions. The Hon ble Delhi High Court in the case of Pr. CIT vs. Jagat Talkies Distributors 389 ITR 13 following the decision of Hon ble Supreme Court in the case of GKN Driveshaft India Ltd. vs. ITO 259 ITR 19 (SC) and judgment of Hon ble Bombay High Court in the case of CIT vs. Videsh Sanchar Nigam Ltd. 340 ITR 66 held as under: Held, dismissing the appeals, that the Appellate Tribunal was right in holding that on account of failure on the part of the Assessing Officer to furnish the copy of the reasons recorded for reopening of the assessments, under section 147, to the assessee, the reassessment proceedings stood vitiated. Failure by the Assessing Officer to provide the assessee the reasons recorded for reopening the assessment could not be treated as a mere procedural lapse. The assessments for the assessment years 1999-2000 onwards for five years were sought to be reopened. Having contested those proceedings for nearly two decades, the Department was not fair in making the offer to consider the assessee s objections to the reopening and pass orders thereon. No reason could be discerned why the Assessing Officer had failed to furnish to the assessee the reasons for reo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded for reassessment and satisfaction u/s 151 have been supplied to the assessee at reassessment proceedings. However, till date Ld. DR did not produce any evidence in this regard. Therefore, considering the totality of the facts and circumstances, it is clear that assessee was not provided copy of the reasons recorded for reopening of the assessment and satisfaction u/s 151 of the Act despite demand is made by the assessee in writing before AO. The assessee is thus, precluded from raising objection against reopening of the assessment at assessment proceedings. The valuable right of the assessee has been denied by the authorities below in this regard. Therefore, the entire reassessment proceedings are nullity, invalid and bad in law. The entire reassessment proceedings are vitiated and, as such, liable to be quashed. 11. In view of the above findings, we set aside the orders of the authorities below and quash the reopening of the assessment. 12. Issue No. 2: Whether AO recorded wrong, incorrect and non-existing reasons in the reasons recorded for reopening of the assessment and, as such, did not apply his mind? 12.1 Ld. Counsel for assessee submitted that AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investor exist in the name of M/s. Management Services Pvt. Ltd., and no addition in respect of the same company have been made by the A.O. The A.O, therefore, recorded incorrect facts in the reasons for reopening of the assessment. Thus the same cannot be approved under the Law. It is well settled Law if wrong facts and wrong reasons are recorded for reopening of the assessment, reopening of the assessment would be invalid and bad in Law. We rely upon Judgment of Hon ble Punjab Haryana High Court in the case of Atlas Cycle Industries 180 ITR 319 (P H). It is well settled Law that note already filed with return disclosing nature of capital receipt and no other tangible material found, therefore, reopening of the assessment under section 148 was quashed. We rely upon Judgment of Hon ble Delhi High Court in the case of CIT vs., Atul Kumar Swami [2014] 362 ITR 693 (Del.) and Judgment of Hon ble Allahabad High Court in the case of Kanpur Texel P. Ltd., 406 ITR 353 (Alld.). Similarly, in the case of CIT vs., Vardhaman Industries [2014] 363 ITR 625 (Raj.), the Hon ble Rajasthan High Court has held that reasons must be based on new and tangible materials. Notice based on documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT, Delhi Bench in the case of Pioneer Town Planners Pvt. Ltd., (supra) in which on identical facts reopening of the assessment have been quashed. The Ld. D.R. relied upon certain decisions in support of the contention that reopening of the assessment is justified, but, the same are distinguishable on facts of the present case. Considering the facts and circumstances of the case in the light of above discussion and decisions referred to in the Order, we are of the view that reopening of the assessment is bad in law and that sanction/approval granted by Pr. Commissioner of Income Tax is also invalid. We may also note that vide Order sheet Dated 23.08.2019 the case was re-fixed for hearing because the Ld. D.R. argued that approval have been granted by Commissioner of Income Tax after due discussion of the matter and perusal of the relevant information and thereafter approval in prescribed proforma sent to the A.O. and he has mentioned that I am satisfied. However, no record was produced. Therefore, this case was re-fixed for fresh hearing. However, on the date of hearing no such record have been produced for the inspection of the Bench. Therefore, satisfaction recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 2. Pr. CIT vs. M/s SNG Developers Ltd. 404 ITR 312 (Del.). 3. CIT vs. Atlas Cycle Industries 180 ITR 319(P H) 4. Siemens Information System Ltd. vs. ACIT 293 ITR 548 (Bom.). 15. On the other hand, Ld. DR relied upon the orders of the authorities below and submitted that since the assessee did not disclose bank account so AO applied his mind to the information received from Investigation Wing. Exact amount cannot be determined at the time of initiation of reassessment proceedings. Prima facie opinion to be formed at the stage of initiation of reassessment proceedings and that sufficiency of the reasons is not relevant for reopening of the assessment and relied upon judgment of the Supreme Court in the case of Raymond Woolen Mills Ltd. vs. ITO 236 ITR 34. 16. We have considered the rival submission. Hon ble Punjab Haryana High Court in the case of CIT Vs. Atlas Cycle Industries 180 ITR 319 held as under: Held, (i) that the Tribunal was right in cancelling the reassessment as both the grounds on which the reassessment notice was issued were not found to exist, and, therefore, the Income-tax Officer did not get jurisdiction to make the reassessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 151(1) of the Act. The initiation of the case for reopening of the assessment was erroneous and without application of mind especially since the Assessing Officer had not examined the return filed, which would have revealed that the assessee had filed regular returns, had sufficient opening balance in his account and the withdrawals therefrom substantiated the donation made. Therefore, the reopening of the assessment was unsustainable in law and the notice issued under section 147 of the Act was to be quashed. 19. Hon ble Bombay High Court in the case of Siemens Information Systems Ltd. Vs. ACIT Others [2007] 293 ITR 548 (Bom.) held as under: The petitioner had several EOU/STP units engaged in the business of export of software. In response to the notice for reopening the assessment for the assessment year 1999-2000, the petitioner, objecting to the issuance of the notice, stated that the reasons furnished by the authority had quoted the provisions of section 10A as amended by the Finance Act, 2000, with effect from the assessment year 2001-02 and as such could not have been made applicable to the assessment year 1999- 2000 and the notice had been issued under the mist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment. The reasons failed to demonstrate the live link between the alleged tangible material and the formation of belief that income chargeable to tax has escaped assessment. The decisions relied upon Ld. Counsel for assessee in the cases of Pr. CIT Vs. Meenakshi Overseas (P) Ltd. 395 ITR 677 (Del.), Pr. CIT Vs. RMG Polyvinyl (I) Ltd., 396 ITR 5 (Del.), Pr. CIT vs. G G Pharma India Ltd. [2016] 384 ITR 147 (Del.) and Signature Hotels P. Ltd. Vs. ITO (supra) squarely apply to the facts and circumstances of the case. Considering the facts and circumstances of the case, in the light of the above discussion, and decisions referred to in the order, we are of the view that reopening of the assessment is invalid and bad in law and that sanction/approval granted is also without any application of mind. Therefore, the reopening of the assessment cannot be sustained in law. We, accordingly, set aside the orders of the authorities below and quash the reopening of the assessment. Resultantly all the additions stand deleted. 20. Since, we have quashed the reopening of the assessment, therefore, there is no need to decide the remaining grounds which are left with academic discussion only. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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