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TMI Blog2023 (2) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... sons recorded. For this, the assessee has raised following ground No.2, which reads as under: "2.1 The CIT(A) has erroneously upheld the reassessment order passed in gross violation of the law laid down by the Hon'ble Supreme Court in GKN Driveshafts. 2.2 The A.O by his own admittance having failed to furnish the reasons recorded despite a request being made, the CIT(A) erred in upholding the order of reassessment. 2.3 CIT(A) also having noted that the objections filed by the appellant against reopening having not been disposed of by the AO by a speaking order the order of reassessment ought to have been quashed. 2.4 The CIT(A) ought to have quashed the re-assessment for the reason that no notice u/s. 143(2) of the Act was served on the appellant." 3. We have heard rival contentions and gone through the facts and circumstances of the case. The brief facts of the case are that a search u/s. 132 of the Act was conducted in the case of the assessee on 26.10.2005 and consequently, notice u/s. 153A of the Act was issued. The assessee filed his return of income for the relevant A.Y 2006-07 on 04.12.2007. The original assessment was completed by the Dy. Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: "Non Supply of reasons recorded 1. In our submission dated 20.09.2021 filed in your honor's office on 21.09.2021, we have submitted in respect of Ground no. 2 that the ld. A.O. in spite of our specific request to provide us a copy of reasons recorded at the time of issue of notice u/s 148, the same were not provided to us. We have also made our submission during the course of assessment proceedings, which was filed in the office of the DCIT (Central Circle II (1) on 22.12.2010. A copy of the said submission is attached herewith. In this submission, we have reiterated our request to provide us a copy of reasons for reopening the impugned assessment. This also throws light on the factual position in respect of this assessment. Under the state of circumstances, we submit that the assessment framed by the ld. A.O without providing us a copy of reasons recorded is an invalid assessment. In this respect we place our reliance on the ratio laid down by the Honorable Bombay High Court in the case of CIT vs. VSNL 340 ITR 66(Bom). In this case, it has been held that if A.O fails to provide copy of reasons recorded till completion of assessment, reassessment is invalid. It has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d supplied to the assessee or any objection raised by the assessee which has been dealt with in the reassessment order. The Ld. counsel for the assessee stated that this cannot be a procedural irregularity rather this case would lead to abuse of power. For this, he relied on the decision of Hon'ble Madras High Court in the case of CIT Vs. Pentafour Software Employees Welfare Foundation [2019] 110 taxmann 69 (Mad), wherein this issue has been properly considered by the Hon'ble Madras High Court in para 36, wherein it was held that when a notice u/s. 148 of the Act was issued, the proper course of action for the assessee is to file return of income and if he so desires, to seek reasons for issuance of notice u/s. 148 of the Act. According to Hon'ble Madras High Court, the A.O is bound to furnish reasons within a reasonable time and on receipt of reasons, the assessee is entitled to file objections and thereafter, the A.O is again bound to dispose of the same by passing a speaking order. The Ld. counsel for the assessee also relied on the decision of Hon'ble Karnataka High Court in the case of PCIT Vs. V. Ramaiah [2019] 103 taxmann.com 201 (Kar.), wherein the Hon'ble Karnataka High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court has spoken in so many words as under: "36. In our considered view, the decision arrived at in the case of Jayanthi Narayanan (supra) reflexes the correct position of law because, the procedure carved out by the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. (supra) not only binds the assessee, but also the Revenue. Filing of objections to the reasons for reopening is not an empty formality. If this is so, passing a speaking order on the objections cannot be treated as an empty formality and to be brushed aside as a procedural error. The purpose for passing a speaking order on the objections is to afford an opportunity to the assessee to question the same, in the event the assessee is aggrieved by such an order. Therefore, to state that it would be sufficient for the Assessing Officer to deal with the objections in the assessment order and thereafter, if the assessee is aggrieved, he can file a statutory appeal, is a proposition which would be against the principles of natural justice. Therefore, if an order violates the law laid down by the Hon'ble Supreme Court, then it has to be necessarily held to be an order without jurisdiction. The law declared by the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to Kelvinator of India Ltd. (supra), which has pointed out as to how serious is reopening of a concluded assessment, that too, after four years. The Hon'ble Supreme Court has laid down the law and it has been made mandatory for the Assessing Officer to pass a speaking order. The use of the word bound"cannot be rendered meaningless. Therefore, we are of the clear view that if there has been a procedural error, it goes to the root of the matter thereby affecting the jurisdiction of the Assessing Officer to proceed further to give a fresh innings to the Assessing Officer on the ground that it is a procedural error, will not only dilute the decision of the Hon-ble Supreme Court in GKN Driveshafts (India) Ltd. (supra), but would lead to abuse of power conferred under Section 147 of the Act, which had been pointed out in Kelvinator of India Ltd. (supra) Therefore, this would be the one more reason to hold that the reopening of assessments are bad." 8. Similarly, the Hon'ble Karnataka High Court in the case of PCIT Vs. V. Ramaiah, supra, considered this aspect and also distinguished the earlier judgment of Hon'ble Madras High Court in the case of Home Finders Housing Ltd. v. ITO, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite the specific requests, the assessing authority did not comply with the said request and supplied the reasons to the assessee. That casts a doubt even on fact of the recording of the reasons in the contemporary period by the assessing authority. The fact that such reasons are supplied before the learned Tribunal only for the first time was enough for by the learned Tribunal to hold that in view of the decision of the Hon'ble Supreme Court, the assessing authority lacked the jurisdiction in invoking the reassessment proceedings and therefore, the impugned reassessment order deserves to be quashed. 8. The decision relied upon by the learned counsel for the Revenue is distinguishable on facts. The order which was to be passed by assessing authority as preliminary objection of assessee, once the assessee has raised the objection to such reassessment proceedings, the meeting of such objections in the main reassessment order, could be procedural aspect of the matter but the recording of the reasons before the Initiation of the reassessment proceedings and communication thereof to the assessee is sine qua non, as held by Hon'ble Supreme Court and that goes to the root of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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