2022 (3) TMI 138 - AT - Income Tax

Legality of assessment u/s 147 - reopening the assessment merely on the basis of information from Investigation Wing - HELD THAT - Since the Ld. CIT(A) has ignored or failed to adjudicate the legal issue of reopening of assessment; in the interest of justice and fair play we set aside the impugned order and restore the appeal back to the file of CIT(A) directing him to adjudicate the legal issue raised by way of additional grounds and to decide the same by passing a reasoned order in accordance with law. Needless to say that reasonable opportunity of being heard be provided to the appellant for representing its case; and the appellant is directed to be diligent and make its submissions so that the Ld. CIT(A) is able to expeditiously adjudicate the legal issue. Accordingly, the appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Challenge to legality of assessment proceedings under section 147 r.w.s. 148 of the Income Tax Act, 1961.

Analysis:
The appeal was directed against the order passed by the Ld. CIT(A)-17, Kolkata for A.Y. 2011-12. The appellant challenged the legality of the assessment proceedings made under section 147 r.w.s. 148 of the Income Tax Act, 1961. The appellant raised additional grounds of appeal before the Ld. CIT(A) and subsequently before the tribunal. The grounds challenged the reopening of assessment by the Assessing Officer. The appellant contended that the reopening of assessment was not as per law and that the Assessing Officer failed to formulate an independent belief. The appellant sought various documents related to the reopening of the assessment but was not provided with the same. The appellant argued that not providing the reasons recorded for reopening of assessment is a major irregularity in the income tax proceedings. The assessment was reopened based on a search and seizure operation at the business premises of another individual, where it was alleged that the appellant company had raised unexplained paid-up share capital and share premium. The appellant contended that the Assessing Officer reopened the assessment merely on the basis of information from the Investigation Wing without independently applying his mind. The tribunal found that the Ld. CIT(A) did not adjudicate the legal issue of reopening the assessment, and in the interest of justice, set aside the impugned order and directed the Ld. CIT(A) to adjudicate the legal issue raised by the appellant and provide a reasoned order in accordance with the law. The appellant was granted a reasonable opportunity to be heard, and the appeal was allowed for statistical purposes.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the arguments presented, the findings of the tribunal, and the ultimate decision rendered in the case.