2020 (1) TMI 57 - HC - Income Tax

Reopening of assessment u/s 147 - Tribunal and the Commissioner have recorded a finding that no reasons in support of notice for reopening were supplied to Assessee inspite of they being asked by - HELD THAT - Tribunal has confirmed the factual finding recorded by the Commissioner that copy of the reasons were not supplied to the Respondent - Assessee inspite of being asked by the Respondent - Assessee. Nothing is pointed out how this position is incorrect. Even on merits the Tribunal found that the reasons were incorrect as they were not pertaining to the year under consideration. Once it is established from the record and concurrently held by both Commissioner and the Tribunal that copy of the reasons was given to the Respondent Assessee in support of the notice for reopening the view taken that the reopening of assessment was without jurisdiction cannot be faulted with. Learned Counsel for the Respondent - Assessee has placed on record decision of the Division Bench of this Court in case of Commissioner of Income-Tax Vs. Videsh Sanchar Nigam Ltd 2011 (7) TMI 715 - BOMBAY HIGH COURT as held that if the reasons for reopening of the assessment though repeatedly asked are not supplied and supplied only after completion of assessment the order of reassessment cannot be upheld. This dicta directly applies to the present case.- Decided against revenue

Summary

Issues:
Challenging order of Income Tax Appellate Tribunal in I.T.A No. 725 of 2015 for Assessment Year 2007-08; Validity of reassessment without communicated reasons; Jurisdiction of Assessing Officer in reopening notice; Supply of reasons for reopening notice to the Assessee.

Analysis:
The appellant challenged the order of the Income Tax Appellate Tribunal regarding the reassessment for the Assessment Year 2007-08. The primary issue raised was whether the reassessment was valid without the communicated reasons for reopening being appreciated. The Respondent - Assessee filed the Income Tax return for the year 2007-08 on 31 October 2007, declaring a total income of ?7,52,80,804. The assessment was initially completed under section 143(3) of the Income Tax Act, 1961 on 30 November 2010 but was later sought to be reopened under section 147 of the Act. The notice under section 148 was issued on 1 March 2012 and served on the Assessee. The Assessee replied on 05 March 2012, requesting that the return filed in 2007 be treated as a response to the notice. However, the Assessing Officer proceeded to pass the order without supplying reasons for the reopening notice to the Assessee.

The Commissioner of Income Tax (Appeals) allowed the appeal on grounds of jurisdiction of the Assessing Officer and on merits, leading to the dismissal of the appeal filed by the Appellant - Revenue by the Income Tax Appellate Tribunal. The Tribunal and the Commissioner found that no reasons in support of the notice for reopening were supplied to the Respondent - Assessee despite requests made by the Assessee. The Tribunal confirmed that the reasons were not provided to the Assessee, and even on merits, found the reasons to be incorrect as they did not pertain to the relevant assessment year. The Tribunal's decision was based on the factual finding that the reasons were not supplied to the Assessee, and this position was upheld by both the Commissioner and the Tribunal.

The High Court held that once it was established that the reasons were not given to the Assessee in support of the notice for reopening, the view that the reassessment was without jurisdiction was justified. Citing a previous decision, the Court emphasized that if reasons for reopening are not supplied despite repeated requests and are provided only after the completion of assessment, the reassessment order cannot be upheld. Therefore, the Court dismissed the appeal, stating that the question framed did not give rise to any substantial question of law based on the established facts and legal principles applied in similar cases.