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2015 (11) TMI 570 - AT - Income TaxReopening of assessment - Held that - We deem it fit to send all the grounds back to the file of the AO. The AO shall provide copy of Reasons recorded by him, if any, to the assessee. The assessee shall file objections to the AO with regard to reopening of the case, if so desired by him. The AO shall follow the procedure, as laid down by the Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs. ITO. (2002 (11) TMI 7 - SUPREME Court). The AO shall dispose of the objections of the Assessee before framing the re-assessment order. The assessee shall be at his liberty to file all the details and evidences, as may be required by the AO or as may be considered appropriate by him, as per law. The AO shall give full opportunity of hearing to the Assessee before the framing reassessment orders. The Assessee shall extend all requisite cooperation to the AO in this regard. Thus, all three grounds i.e. Grounds No (i), (ii) and (iii), of all of these three appeals, are sent back to the file of AO. - Decided in favour of assessee for statistical purposes.
Issues Involved:
1. Validity of the notice under section 148 of the Income Tax Act and the proceedings pursuant thereto. 2. Addition on account of alleged unexplained cash credit. 3. Addition on account of alleged interest received but not offered to tax. 4. Condonation of delay in filing appeals. Detailed Analysis: Condonation of Delay: The Tribunal first addressed the issue of a 288-day delay in filing the appeals. The assessee argued that the delay was due to severe financial crises and the subsequent closure of two companies managed by the assessee. The Tribunal recognized the inherent powers to condone delays if 'sufficient' or 'reasonable' cause is shown. The Tribunal found the reasons provided by the assessee, supported by affidavits and documents, to be credible. The Tribunal emphasized a justice-oriented approach, referencing the Supreme Court's judgment in Mst Katiji, which advocates for a liberal approach in condonation matters to ensure substantial justice. Consequently, the Tribunal condoned the delay and proceeded to address the appeals on merits. Validity of Notice under Section 148 and Reopening under Section 147: The Tribunal noted that the assessee had not initially challenged the validity of the notice under section 148 or the reopening under section 147 during the assessment proceedings but had raised these issues before the CIT(A). The CIT(A) erroneously dismissed these grounds, assuming they were not pursued by the assessee. The Tribunal clarified that these jurisdictional grounds could be raised at any stage, referencing the Bombay High Court's judgment in Inventors Industrial Corporation Ltd. and the Supreme Court's judgment in NTPC. The Tribunal decided to remand these issues back to the AO, instructing the AO to provide the reasons recorded for reopening and to follow the procedure laid down by the Supreme Court in GKN Driveshafts (India) Ltd. vs. ITO. Addition on Account of Alleged Unexplained Cash Credit: The Tribunal did not provide a detailed analysis of the additions on account of alleged unexplained cash credit for the assessment years 2003-04, 2004-05, and 2005-06, as these grounds were also remanded back to the AO. The AO is instructed to re-examine these issues after addressing the jurisdictional grounds. Addition on Account of Alleged Interest Received but Not Offered to Tax: Similarly, the Tribunal did not delve into the specifics of the additions on account of alleged interest received but not offered to tax. These grounds were also remanded back to the AO for re-examination in conjunction with the jurisdictional issues. Conclusion: The Tribunal allowed the appeals for statistical purposes, remanding all grounds back to the AO for re-adjudication. The AO is directed to provide an opportunity for the assessee to file objections and evidence, and to follow due procedure before framing the reassessment orders. The Tribunal emphasized the importance of addressing jurisdictional issues properly to ensure justice is served. The order was pronounced in the open court on 30th September 2015.
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