2018 (12) TMI 976 - AT - Income Tax

Reopening of assessment - reasons for reopening were not provided to the assessee - Held that - A perusal of documents on record indicates that the reasons for reopening were not furnished to the assessee. The Revenue has not brought on record any document indicating that the reasons for reopening were ever furnished to the assessee. The Hon ble Supreme Court of India in the case of GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & Ors. 2002 (11) TMI 7 - SUPREME COURT has categorically held that the Assessing Officer is bound to furnish the reasons within a reasonable time on the request of assessee. In the present case we find that the assessee while replying to the notice u/s. 148 dated 20-03-2015 had specifically asked for the reasons for reopening vide communication dated 21-04-2015. Again notice u/s. 148 was issued to the assessee on 24-03-2015 the assessee vide communication dated 27- 10-2015 asked for the reasons for reopening. However, on both the occasions the Assessing Officer has failed to provide the reasons for reopening to the assessee. Assessee has not complied with the notice u/s. 148 as no return of income was filed in response to the notice u/s. 148 - Held that - Though the said return was filed by the assessee beyond the period of time frame as specified u/s. 139(5) of the Act, however, the same was filed much prior to the completion of assessment. Even if the said return was not considered by the Assessing Officer for the purpose of assessment, the same could have been treated as return in response to the notice u/s. 148 as requested by the assessee. Further, we find that the Assessing Officer never communicated to the assessee that the return filed on 31-03-2013 cannot be considered in proceedings u/s. 148 of the Act. Hence, the objections raised by the Department against the return dated 31-03-2013 are unsustainable - decided in favour of assessee.

Summary

Issues Involved:
Validity of reassessment proceedings under Section 148 of the Income Tax Act, 1961.
Valuation of land for determining additional income from Capital Gains.
Mandatory reference to Valuation Officer under Section 55A of the Income Tax Act, 1961.
Reliance on an independent Valuation Report for determining capital gains.

Analysis:

Validity of Reassessment Proceedings:
The appellant challenged the validity of the assessment order primarily due to the non-provision of reasons for reopening by the Assessing Officer. The appellant requested the reasons for reopening on multiple occasions, but the reasons were not furnished. The Tribunal observed that the failure to provide reasons for reopening rendered the assessment order without jurisdiction, citing the precedent set by the Hon'ble Supreme Court of India. The Tribunal also noted that the absence of reasons for reopening violated the directions of the Supreme Court, rendering the reassessment order unsustainable.

Valuation of Land for Capital Gains:
The appellant contested the valuation of land at ?20 per sq. mt. instead of the claimed ?240 per sq. mt., resulting in an additional income from Capital Gains. However, no arguments were presented by the appellant's representative on this issue. Consequently, the Tribunal dismissed this ground without further discussion.

Mandatory Reference to Valuation Officer:
An additional ground was raised regarding the mandatory reference to a Valuation Officer under Section 55A of the Income Tax Act, 1961. The Tribunal did not delve into this issue in detail, but the ground was considered as part of the overall appeal.

Reliance on Independent Valuation Report:
Another additional ground questioned the reliance on an independent Valuation Report for determining capital gains. While the appellant did not provide arguments on this matter, the Tribunal dismissed this ground along with the other grounds related to the valuation of land.

In conclusion, the Tribunal set aside the impugned order based on the lack of reasons for reopening the assessment, which rendered the assessment order without jurisdiction. The appeal was partly allowed on this ground, while the other grounds related to valuation issues were dismissed due to the absence of arguments from the appellant's side.