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TMI Blog2022 (9) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... nical requirement; the absence of which would not vitiate the assessment in totality in view of the judgment of Hon'ble Madras High Court in the case of Home Finders Housing Ltd. reported in 404 ITR 611." 2. Learned counsel for the assessee, at the outset, submitted that Cross Objections filed by the assessee are in support of the order passed by learned CIT(A) and he will not be pressing the same therefore, Learned D. R. was asked to proceed with his arguments. 3. Learned D. R. submitted that learned CIT(A) has quashed the assessment order by holding that Assessing Officer had not supplied the reasons to believe to the assessee. It was submitted that while holding so, learned CIT(A) has ignored the fact that assessee had not filed the income tax return within the prescribed period of time mentioned by the Assessing Officer in the show cause notice and had filed the return of income only on 07/12/2018 and the case was becoming time barred on 31/12/2018 therefore, the Assessing Officer could not be expected to supply the same specifically in view of the fact that assessee had not demanded the copy of reasons before the completion of assessment. Without prejudice Learned D. R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he arguments of Learned D. R. that the assessee filed the return of income at the fag end of the limitation period and reasons were not demanded before the completion of assessment order, Learned counsel for the assessee submitted that on receipt of return of income the Assessing Officer, before completion of assessment proceedings, simply had to provide a copy of reasons recorded by the Assessing Officer and it was submitted that the assessee, vide letter dated 07/12/2018, had requested the Assessing Officer to provide copy of reasons recorded and in this respect invited our attention to the order of learned CIT(A) where the request of the assessee, demanding copy of reasons recorded, has been reproduced by learned CIT(A). Learned counsel for the assessee submitted that Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra) has clearly held that in view of notice u/s 148, the assessee is required to file income tax return and is also entitled to get copy of reasons recorded before completion of assessment proceedings. It was submitted that Assessing Officer gave the copy of reasons recorded in the month of January, 2019 whereas the assessment was already com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income only on 07/12/2018 and on 08/12/2018 the assessee was asked to produce various documents to complete the assessment proceedings. The assessee did not produce the books of account or other documents, as required by the Assessing Officer and the Assessing Officer, on the basis of a letter issued u/s 133(6) to ICICI Bank, obtained the bank statement of the assessee and made certain additions to the income of the assessee on the basis of such entries in the bank statement. Against the assessment order, the assessee filed appeal before learned CIT(A) and a specific ground was taken regarding non providing of reasons recorded as required by the judgment of Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra). The assessee had taken this argument vide ground No. 3 before learned CIT(A). Learned CIT(A) obtained a remand report from the Assessing Officer on this specific ground taken by the assessee. The comments on ground of appeal No. 3 have been reproduced by learned CIT(A) in his order at page 5, which for the sake of completeness are reproduced below: "Ground of appeal no. 3: Based on the facts and circumstances of the case and in law, the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return filed by assessee should have been considered a non est in view of the fact that the assessee did not file return of income against the notice issued for filing the return of income, we find that it is undisputed fact that the assessee filed the return of income only on 07/12/2018 and the case of the assessee was getting time barred by 31st December, 2018. After the issue of notice u/s 148, the Assessing Officer issued various notices u/s 142(1) requiring the assessee to file the necessary information. The Assessing Officer also issued notice u/s 143(2) on 14/12/2018 and further notice u/s 142(1) on 15/12/2018. These facts have been noted by learned CIT(A) in his order at pages 1 & 2. The issue of notice u/s 143(2) by the Assessing Officer vide notice dated 14/12/2018 itself proves that the Assessing Officer did take on record, the return of income, filed by the assessee on 07/12/2018 and therefore, the return filed by the assessee, though after long period of time, cannot be termed as non est as claimed by Learned D. R. Now the question arises as to whether the Assessing Officer could have completed the assessment without providing copy of reasons to the assessee specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number of cases have held that copy of reasons recorded has to be provided to assessee before completion of assessment order. We find that learned CIT(A) has rightly accepted the contention of the assessee and after relying on number of case laws, decided the issue in favour of the assessee. For the sake of completeness, the relevant findings of learned CIT(A) are reproduced below: a. Hon'ble Bombay High Court in CIT vs. Videsh Sanchar Nigam Ltd. - 340 ITR 66 "In the instant case, the reasons recorded for reopening of the assessment though repeatedly asked by the assessee were furnished only after completion of the assessment. The Tribunal following the judgment of Bombay High Court in the case of CIT v. Fomento Resorts & Hotels Ltd., IT Appeal No. 71 of 2006, dated 27-11-2006, has held that though the reopening of the assessment is within three years from the end of the relevant assessment year, since the reasons recorded for reopening of the assessment were not furnished to the assessee till the completion of assessment, the Older cannot be upheld. The Hon'ble Bombay High Court has upheld the finding of the Tribunal observing where reasons recorded for reopening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons for reopening an already concluded assessment goes to the very root of the matter. After filing of the return in response to the notice issued under section 148 or on the assessee requesting that the return of income initially filed be treated as a return of income filed in response to such notice, The assessee is entitled to be furnished with the reasons for such reopening, which can also be challenged independently. Where such reasons had not been furnished to the assessee even though a request for the same had been made, proceedings for the reassessment could not have been taken further on this ground alone." d. Hon'ble Bombay High Court in CIT (LTU) vs. IDBI Ltd. in 76 taxmann.com 227: "The supply of reason in support of the notice for reopening of an assessment is a jurisdictional requirement. The reasons recorded form the basis to examine whether the Assessing Officer had at all applied his mind to the facts and had reasons to believe that taxable income has escaped re-assessment. It is these reasons, which have to be made available to the Assessee and it could give rise to a challenge to the reopening notice. It is undisputed that the reasons recorded for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1999-2000 to 2004-05 but had filed returns for earlier years. On the basis of information received from the banks to which the assessee had let out its property, it was discovered by the Department that rent had been paid to the assessee by them after deducting the tax at source. The Assessing Officer recorded reasons for reopening of the assessment under section 147 and issued notice under section 148 asking the assessee to file the return. Pursuant to the notice, the assessee filed a return which disclosed the income from the property and the business income for the assessment year 1999-2000. Separate notices were issued under section 143(2) and 142(1) by the Assessing Officer along with a questionnaire for each of the assessment year in question. The assessee sought supply of the reasons recorded for the reopening of the assessment under section 148. The reason were not furnished by the Assessing Officer to the assessee. Since the assessment was getting time barred, the Assessing Officer made additions on account of the income from house property and passed separate reassessment orders in respect of each of the assessment years in question. In its appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e furnished to the assessee and the reasons recorded cannot be improved upon or amended by any correspondence, letters etc. It is an undisputed fact that the reasons actually recorded by the Assessing Officer were not furnished to the assessee despite repeated requests and demands and therefore, the gist of reasons as furnished vide letter dated 28-6-2007 cannot be treated as reasons actually recorded by the Assessing Officer as per section 148(2). Thus, the Assessing Officer has failed to furnish the reasons recorded for reopening of the assessment within the reasonable time and rather prior to the completion of assessment, than the reassessment order passed without supply of reasons as recorded for reopening of the assessment, is invalid and cannot be sustained. Accordingly, the reassessments for all the years under consideration are to be set aside being invalid." h. Hon'ble ITAT Delhi in Ujagar Holdings (P) Ltd. vs. ITO (2017) 88 taxmann.com "When we advert to the facts of the case in hand, we find from the submission of the assessee that despite repeated letters requesting to provide copy of the reasons recorded or the grounds on which the assessment was reopened, no s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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