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2021 (1) TMI 95 - AT - Income TaxReopening of assessment u/s 147 - no time of four weeks have been granted to the assessee to take remedial action against notice - whether there is delay on the part of the assessee asking for copy of the reasons recorded HELD THAT - Assessee requested for supply of the reasons recorded for re-assessment proceedings which were provided to the assessee on 21.11.2017. The assessee has filed copy of the letter Dated 25.04.2017 which was filed to the A.O. asking for copies of the reasons recorded for reopening of the assessment. It bears the stamp of the Revenue Department also. Thus, it is clear that assessee immediately asked for copy of the reasons for reopening of the assessment on 25.04.2017 after filing earlier letter Dated 20.04.2017 - there is no delay on the part of the assessee asking for copy of the reasons recorded for reassessment proceedings. Reasons were supplied to the assessee only on 21.11.2017 and assessee on the same day filed the objections to the reopening of the assessment which have been disposed of vide Order Dated 05.12.2017 - A.O. within 23 days after disposing of the objections of the assessee passed the impugned re-assessment order Dated 28.12.2017. Thus, no time of four weeks have been granted to the assessee to take remedial action in the matter. See SMT. KAMLESH GOEL VERSUS THE I.T.O, WARD 59 (3) , NEW DELHI 2018 (9) TMI 102 - ITAT DELHI Thus re-assessment order Dated 28.12.2017 framed under section 147/143(3) of the I.T. Act, 1961, is bad in Law and deserves to be quashed. - Decided in favour of assessee.
Issues Involved:
1. Validity of re-assessment proceedings under sections 147/148 of the I.T. Act, 1961. 2. Addition of ?10 lakhs on account of share capital under section 68 of the I.T. Act, 1961. 3. Addition of ?17,500/- on account of commission paid under section 69C of the I.T. Act, 1961. Issue-wise Detailed Analysis: 1. Validity of Re-assessment Proceedings under Sections 147/148 of the I.T. Act, 1961: The assessee challenged the re-assessment proceedings initiated by the A.O. under sections 147/148 of the I.T. Act, 1961. The key contention was that the A.O. failed to provide the reasons for reopening the assessment within a reasonable time. The assessee requested the reasons on 25.04.2017, but they were supplied only on 21.11.2017. The assessee filed objections on the same day, which were disposed of by the A.O. on 05.12.2017. The A.O. passed the re-assessment order on 28.12.2017, within 23 days of disposing of the objections, without granting the statutory four weeks for the assessee to seek legal remedies. Citing the ITAT Delhi A-SMC Bench decision in Smt. Kamlesh Goel vs. ITO and the Hon’ble Bombay High Court's ruling in Bharat Jayantilal Patel, the Tribunal held that the re-assessment order was bad in law and deserved to be quashed. The Tribunal emphasized that the A.O. must allow four weeks after disposing of objections before proceeding with the re-assessment, as per the Supreme Court’s directive in GKN Driveshaft (India) Ltd. vs. ITO. 2. Addition of ?10 Lakhs on Account of Share Capital under Section 68 of the I.T. Act, 1961: The A.O. added ?10 lakhs to the assessee's income, claiming it was unexplained share capital received from M/s. Attractive Finlease Pvt. Ltd. The A.O. based this addition on information from the DDIT (Inv.) that the share capital was bogus. However, since the Tribunal quashed the re-assessment proceedings, the addition of ?10 lakhs under section 68 was also deemed invalid and deleted. 3. Addition of ?17,500/- on Account of Commission Paid under Section 69C of the I.T. Act, 1961: The A.O. also added ?17,500/- to the assessee's income as unexplained expenditure under section 69C. Similar to the share capital addition, this was based on the re-assessment proceedings. Given that the re-assessment order was quashed, the addition of ?17,500/- was also invalid and deleted. Conclusion: The Tribunal quashed the re-assessment proceedings due to procedural lapses by the A.O., specifically the failure to allow the statutory four-week period for the assessee to seek legal remedies after disposing of objections. Consequently, all additions made in the re-assessment order, including ?10 lakhs under section 68 and ?17,500/- under section 69C, were deleted. The appeal of the assessee was allowed in full.
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