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TMI Blog2013 (3) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act by Commissioner of Income tax (Appeals) confirming order made under section 143(3) rws 147 of the Act is illegal, bad in law, ultra virus and without allowing reasonable opportunity of the hearing, and without appreciating the facts, submission and evidences in their proper perspective and without passing said order within reasonable time after the last date of hearing is liable to be annulled. - 3. Since these grounds go to the root of the validity of the assessment order, we heard ld representatives of both parties at length, besides hearing them in respect of other grounds disputing the confirmation of additions made by the Assessing Officer. It is relevant to state that on a stay application filed by the assessee being S.A. No.65/Mum/2013, the Tribunal by its order dated 1.3.2013 granted stay for a period of six months or till disposal of the appeal, whichever comes earlier, for recovery of demand and directed the Registry to fix the appeal for out of turn hearing on 20.3.2013. Accordingly, said appeal was heard on 20.3.2013. 4. In respect of Ground Nos.6 7 of appeal, relevant facts are that assessee is a partnership firm engaged in the business of reseller of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons recorded by the AO, the order passed u/s.143(3) r.w.s 147 is bad in law. However, Ld CIT(A) rejected the said ground and confirmed the action of the AO. Hence, assessee is in further appeal before the Tribunal and as mentioned hereinabove, assessee has disputed the validity of the assessment order, inter alia, on the ground that no reasons recorded by the AO before issuing notice u/s.148 of the Act has been provided to the assessee before making the said assessment order u/s.143(3) r.w.s 147 of the Act. 5. At the time of hearing, ld A.R. submitted that assessee has come to know the reasons recorded by the Assessing Officer for the first time when assessee received the order of ld CIT(A), that ld CIT(A) in para 6.2 of the impugned order has reproduced the reasons recorded by the AO. Ld A.R. relying on the decision of Hon ble Jurisdictional High Court in the case of Commissioner of Income-tax v. Videsh Sanchar Nigam Ltd.,340 ITR 66(Bom) submitted that Their Lordships in the said case relying on earlier decision in the case of CIT v. Fomento Resorts and Hotels Ltd., Income-tax Appeal No. 71 of 2006 decided on November 27, 2006, has held that if the reasons recorded for reopenin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income of ₹ 7,67,171. The said return was processed u/s.143(1) of the Act accepting the income returned. It is observed that there was a survey action u/s.133A of the Act on the assessee s premises and on that basis, the AO issued notice u/s.148 of the Act dt.26.3.2010, which was served on the assessee on 29.3.2010. On perusal of the order of ld CIT(A), we observe that the AO recorded the reasons u/s.148(2) r.w.s 147 of the Act before issuing notice to the assessee u/s.148 of the Act. We observe from page 33 of PB that assessee vide its letter dated 28.4.2010 asked the AO to furnish the reasons recorded for reopening of assessment. The AO vide its letter dated 29.4.2010, copy placed at page 34 of PB asked the assessee to file return of income and in respect of reasons stated as under: As regards to your request for providing reasons for reopening of assessments, the same will be communicated only after filing of returns of income for the aforesaid year. 9. We observe that assessee vide its letter dated 7.5.2010 stated to the AO that the return filed u/s.139 on 29.9.2008 may pleased be treated as filed u/s.148 of the Act. Therefore, it is evident that assessee sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the binding precedents, respectfully applying these propositions to the facts of the case and as the Assessing Officer has not furnished the reasons to the assessee before concluding the assessment proceedings, much less within the reasonable period of time as mandated by the Hon ble Supreme Court we have no other alternative but to hold that the proceedings are null and void. 17. As we have held that the reopening is bad in law for the reason of nonfurnishing of reasons recorded, we do not go into all other arguments raised in this case on the issue of reopening as they would be academic in nature. 13. We observe that the department filed appeal against the said order of the Tribunal before the Hon ble High Court and Hon ble High Court vide its order dated 20.7.2011 reported at 340 ITR 66 (Bom) has confirmed the order of the Tribunal and dismissed the appeal of the department on the ground that reasons recorded for reopening of assessment were not furnished to the assessee till the completion of assessment, the reassessment order cannot be upheld. 14. Similar issue again came up for consideration before the Tribunal in the case of Telco Dadajee Dhackjee Limited (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y High Court in CIT vs. Fomento Resorts and Hotels Ltd. in Tax Appeal No.71 of 2006 dated 27.11.2006 (copy filed), in which it was held that giving of reasons must be considered as implicit in section 11 of the Expenditure Tax Act, 1987 and if it is not done and the rules of natural justice are violated, the assessment must be quashed, My attention was also drawn to the order of the Tribunal in the aforesaid case in ETA No: 1 5/PN/2001 dated 04.04.2006. It was also submitted that the judgment of the Hon ble Bombay High Court (Panaji Bench) has been confirmed by the Supreme Court by dismissing the Special Leave Petition filed by the CIT by order dated 16.07.2007. The copy of the order of the Supreme Court has also been filed. The judgment of the Hon ble Bombay High Court (supra) was sought to be distinguished by the learned Senior DR by submitting that it was rendered under a different enactment which did not provide for furnishing of reasons for reopening the assessment to the assessee and since the Bombay High Court has referred to furnishing of reasons for passing an order, it is distinguishable also on the ground that section 148 notice is not an order and failure to furnish r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Department against the same. In addition to the above, a Division Bench of the Tribunal in Mumbai has held in its order dated 30.10.2009 in ITA No: 7626/Mum/2004 in the case of Videsh Sanchar Nigam Ltd. vs. JCIT, that if the Assessing Officer has not furnished the reasons for reopening the assessment under section 148, the entire proceedings are null and void. In coming to this conclusion the Tribunal has referred to the judgment of the Panaji Bench of the Bombay High Court in CIT vs. Fomento Resorts and Hotels Ltd. (supra) in paragraph 14.9 of its order. In this order the Tribunal has also referred to the order of the Delhi Bench of the Tribunal in the case of ITO vs. Smt Gurinder Kaur (supra) cited by the learned Senior DR before me and has pointed out that the order of the Delhi Bench of the Tribunal is not in consonance with the view taken by the Delhi High Court in the case of New Bank of India Ltd. vs. ITO (1982) 136 ITR 679 (Del). There is thus an order of a Division Bench of the Tribunal in Mumbai which supports the assessee s contention that if the reasons for reopening the assessment are not furnished to the assessee, that is fatal to the validity of notice of reopenin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessment was quashed. 17. In the case before us, as mentioned hereinabove, we observe that assessee vide its letter dated 28.4.2010 made a specific request to the AO to furnish reasons recorded for reopening of assessment. We observe that AO vide his letter dated 29.4.2010 asked the assessee to furnish return of income and thereafter reasons for reopening of assessment will be communicated to the assessee. We observe that the AO did not furnish the copy of the reasons recorded till completion of assessment made on 30.12.2010. We observe that assessee also took a ground before ld CIT(A) disputing the validity of assessment order on the ground of non-furnishing of reasons recorded by the AO, but ld CIT(A) in the impugned order stated the reasons recorded by the AO. He has not disputed the fact that no copy of the reasons recorded were furnished to the assessee, which is necessary before the assessment is completed. We hold that in view of the decision of the Tribunal in the case of Telco Dadajee Dhackjee Limited (supra) and the decisions of Hon ble Jurisdictional High Court in the case of Fomento Resorts and Hotels Ltd (supra) and followed in the case of Videsh Sanchar Nig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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