9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (12) TMI 1647 - AT - Income TaxReopening of assessment - non communication of the reasons - Held that - In the instant case, the AO had issued notice u/s 148 and the assessee has complied with the notice and requested for reasons. The AO completed the assessment without communicating the reasons. Case of COMMISSIONER OF INCOME TAX VERSUS M/S TREND ELECTRONICS 2015 (9) TMI 1119 - BOMBAY HIGH COURT to be followed. We hold that the assessment made u/s 147 r.w.s. 143(3) without communicating the reasons is bad in law. Accordingly, the orders framed u/s 147 r.w.s. 143(3) are quashed and the appeal of the assessee is allowed. Since, we have quashed the assessment made u/s 143(3), we consider it is not necessary to adjudicate the grounds on merits. - Decided in favour of assessee.
Issues involved:
Completion of assessment without communicating reasons to the assessee, validity of reassessment made under section 147 of the Income Tax Act, disallowance of interest payable on purchase tax, addition of claimed repairs by the company, and the obligation of the Assessing Officer to communicate reasons to the assessee. Analysis: Issue 1: Completion of assessment without communicating reasons to the assessee The appeals were filed against the order of the Commissioner of Income-Tax (Appeals) for the assessment years 2006-07 to 2008-09. The primary contention was that the assessments were completed under section 143(3) read with section 147 without communicating the reasons to the assessee, which was deemed bad in law. The assessee requested the Assessing Officer (AO) to treat the returns filed earlier as responses to the notices under section 148 and to provide the reasons for initiating the proceedings under section 147. The AO failed to communicate the reasons despite the request, leading to the argument that the assessment order was invalid. The Tribunal held that as per the Supreme Court's judgment, it is mandatory for the AO to communicate the reasons upon the assessee's demand. Since the reasons were not communicated in this case, the assessment order was deemed bad in law and was quashed. Issue 2: Validity of reassessment made under section 147 The assessee challenged the validity of reassessment made under section 147 of the Income Tax Act. The AO completed the assessment without communicating the reasons recorded for issuing the notice under section 148, despite the assessee's request for furnishing the reasons. The Tribunal referred to relevant case laws, including the decision of the Hon'ble Bombay High Court, which emphasized the importance of communicating reasons for reopening assessments. The Tribunal concluded that the assessment made under section 147 without communicating the reasons was invalid. Therefore, the orders framed under section 147 read with section 143(3) were quashed, and the appeal of the assessee was allowed. Issue 3: Disallowance of interest payable on purchase tax and addition of claimed repairs The Tribunal addressed specific grounds raised by the assessee, including disallowance of interest payable on purchase tax and addition of claimed repairs by the company. The Tribunal found that since the assessment under section 143(3) was quashed due to the lack of communication of reasons, it was not necessary to adjudicate these grounds on their merits. Therefore, the appeal of the assessee was allowed based on the primary issue of invalid assessment due to the failure to communicate reasons. Overall, the Tribunal emphasized the importance of following legal procedures, including the communication of reasons for reassessment, to ensure the validity of assessment orders and uphold the principles of natural justice.
|
