TMI Blog2023 (2) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... esh, Advocates For the Respondent : Shri AR. V Sreenivasan, Addl. CIT ORDER PER MAHAVIR SINGH, VICE PRESIDENT : This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-18, [CIT(A)] in ITA No.659/15-16 dated 21.06.2022. The Assessment was framed by Dy. Commissioner of Income Tax, Central Circle-II(1), Chennai for the relevant A.Y. 2006-07 vide order dated 29.12.2010 u/s. 153A r/w s. 143(3) r/w s. 147 of the Income Tax Act, 1961 (hereinafter the Act ). 2. The first jurisdictional issue raised by the assessee is as regards to the order of CIT(A) confirming the action of the A.O in framing re-assessment order in gross violation of the law laid down by the Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO [2002] 259 ITR 19 (SC) for non furnishing of reasons recorded. For this, the assessee has raised following ground No.2, which reads as under: 2.1 The CIT(A) has erroneously upheld the reassessment order passed in gross violation of the law laid down by the Hon ble Supreme Court in GKN Driveshafts. 2.2 The A.O by his own admittance having failed to furnish the reasons recorded despite a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the office of the D.C.I.T Central Circle II (1) on 30.07.2009 to treat the return filed originally as having been filed in response to notice u/s. 148 and requested to provide him the reasons for re-opening the assessment. 3 The reasons for re-opening of assessments are awaited. No other statutory notices have been received by us till today. 2. The A.O has neither supplied reasons to the assessee nor allowed any opportunity to raise any objection qua the reasons recorded in term of the decision of Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO, supra. Aggrieved against reassessment order, the assessee preferred appeal before CIT(A). 3. The assessee before CIT(A) also raised the issue of non supply of reasons recorded and CIT(A) has reproduced the same in para 5.1 at page 7 of his appellate order and the same reads as under: Non Supply of reasons recorded 1. In our submission dated 20.09.2021 filed in your honor's office on 21.09.2021, we have submitted in respect of Ground no. 2 that the ld. A.O. in spite of our specific request to provide us a copy of reasons recorded at the time of issue of notice u/s 148, the same were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same have been dealt by the AO in the reassessment proceedings, the said procedural reach stood cured. Further, the appellant had several opportunities during the present appellate proceedings too. 8.11. In view of the above discussions and in the light of the relevant judicial decisions on the subject matter, I hold that the AO has correctly exercised his jurisdiction while reopening the assessment and the appellant's grounds on the jurisdictional issue of reopening are liable to be muted. Accordingly, the appellant's rounds are dismissed. Aggrieved, the assessee is in second appeal before the Tribunal on this very issue. 5. The Ld. counsel for the assessee took us through the reassessment order passed u/s. 153A r/w s. 143(3) and 147 of the Act dated 29.12.2010 and read out the entire reassessment order and stated that there is no whisper about reasons recorded supplied to the assessee or any objection raised by the assessee which has been dealt with in the reassessment order. The Ld. counsel for the assessee stated that this cannot be a procedural irregularity rather this case would lead to abuse of power. For this, he relied on the decision of Hon ble Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment to the assessee till date. The only argument of Ld. Sr. D.R is that the assessee was made aware of the reasons recorded. This fact we are noted from the order of CIT(A). He has also recorded a finding of the fact that the assessee has fully known about the reasons recorded and filed objections during the reassessment proceedings and the same have been dealt by the A.O in the reassessment proceedings. We have gone through the assessment order, but could not find any iota of word about the supply of reasons and consequent objection raised or disposal of objections. Now, coming to the legal aspect of the issue whether this is a procedural irregularity, which can be cured or this is void ab initio. The Hon ble Madras High Court in the case of CIT Vs. Pentafour Software Employees Welfare Foundation , supra, has categorically held in para 36 to 41 that it is clearly void ab initio and the Hon ble High Court has spoken in so many words as under: 36. In our considered view, the decision arrived at in the case of Jayanthi Narayanan (supra) reflexes the correct position of law because, the procedure carved out by the Hon ble Supreme Court in GKN Driveshafts (India) Ltd. (supra) n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power to reopen, provided there is tangible material to come to the conclusion that there is escapement of income from assessment and reasons must have live link with the formation of the belief. 39. The Hon ble Supreme Court in GKN Driveshafts (India) Ltd. (supra) had clarified that when a notice under Section 148 of the Act is issued, the proper course of action for the noticee is to file a return and if he so desires, to seek for reasons for issuing such notice. Further, it was held that the Assessing Officer is bound to furnish reasons within a reasonable time, on receipt of the reasons, the noticee is entitled to file objections and the Assessing Officer is bound to dispose of the same by passing a speaking order. 40. We do not agree with the interpretation canvassed before us that assuming objections were not disposed of by a speaking order, it would be only a procedural error. 41. We have referred to Kelvinator of India Ltd. (supra), which has pointed out as to how serious is reopening of a concluded assessment, that too, after four years. The Hon ble Supreme Court has laid down the law and it has been made mandatory for the Assessing Officer to pass a speakin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal has clearly noted in its order after looking into the record of the case that the reasons which were placed before the learned Tribunal itself only for the first time were never communicated to the assessee during the contemporary period. Mere participation of the assessee or Authorized Representative in the reassessment proceedings does not amount to the assessee being made aware or known of the reasons for such reopening. The reasons now quoted by the learned Tribunal in the impugned order clearly indicates that they are purportedly detailed reasons and had the assessing authority given the said reasons before hand, the assessee could have raised objections before the assessing authority and the assessee could have rebutted the material on the basis of which the impugned reassessment proceedings were undertaken by the assessing authority. The assessee in the present case twice made a request to the assessing authority, but despite the specific requests, the assessing authority did not comply with the said request and supplied the reasons to the assessee. That casts a doubt even on fact of the recording of the reasons in the contemporary period by the assessing authority. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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