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TMI Blog2023 (9) TMI 1499X X X X Extracts X X X X X X X X Extracts X X X X ..... been a complete violation of the applicable principle of law by the AO, who had, despite a specific request by the assessee, failed to communicate the reasons to believe that had formed the very basis for reopening of his assessment u/s. 147 therefore, the very assumption of jurisdiction by him and framing of the impugned assessment cannot be sustained and is liable to be struck down on the said count itself. My view above is supported by the judgment of Agarwal Metals and Alloys [ 2012 (8) TMI 612 - BOMBAY HIGH COURT] after taking cognizance of the fact that the AO in the case before them had failed to communicate the reasons to believe based on which the case of the assessee was reopened, quashed the assessment by treating the same as having been passed in a brazen violation of the governing principles of law. A similar view had been taken in the case of Pr. CIT Vs. Jagat Talkies Distributors [ 2017 (9) TMI 192 - DELHI HIGH COURT] held that on account of the failure of the A.O to make available to the assessee a copy of the reasons for reopening of the assessment u/s. 147 of the Act, the re-assessment proceedings would stand vitiated in law. Accordingly, as in the case before me, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 4,48,840/-. 3. After filing the return of income, the assessee, vide his letter dated 16.04.2019, requested the A.O to make available a certified copy of the reasons based on which proceedings were initiated u/s. 147 of the Act, along with a copy of approval that he had obtained from the appropriate authority for issuing notice u/s 148 of the Act. However, the A.O., without making available the details above, proceeded with and vide his order u/s. 147 of the Act dated 23.12.2019 assessed the assessee's income at Rs. 33,83,240/-. 4. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. 5. The assessee, being aggrieved with the order of the CIT(Appeals), has carried the matter in appeal. 6. Shri R.B Doshi, Ld. Authorized Representative (for short AR ) for the assessee at the very outset assailed the validity of jurisdiction assumed by the A.O for framing assessment vide his order passed u/s. 147 of the Act dated 23.12.2019. Carrying his contention further, it was submitted by the Ld. AR that though the assessee, after filing the return of income on 16.04.2019, had on the same date, inter alia, applied for a copy of reasons to bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that there was neither any mention in the assessment order about any such request having been made by the assessee for making available a copy of reasons recorded; nor was it discernible that he had raised any objection as regards reopening of his case. Apart from that, it was observed by the CIT(Appeals) that the assessee had not followed up the matter of nonreceipt of copy of reasons recorded for reopening of his case. The CIT(Appeals) was of the view that now, when the A.O had not supplied the copy of reasons to believe, then the assessee ought to have stepped further for taking legal remedy against the reopening of his case, which, however, was not done by him. Also, it was observed by the CIT(Appeals) that the assessee, on receipt of notice u/s. 143(2) of the Act, could have objected as regards non receipt of notice of reasons to believe. On the contrary, he further observed that the assessee, despite objecting to the non-availability of a copy of reasons to believe, had participated in the assessment proceedings and allowed the A.O to complete the same. Considering the facts above, it was observed by the A.O. that the assessee had not only failed to file concrete pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In compliance to this notice assessee has submitted partial reply along with supporting documents which is placed on record. Thereafter, a show-cause notice was issued on 01/11/2019 vide letter no. ITBA/AST/F/147(SCN)/2019-20/1019683519(1) by fixing the date for compliance on 15/11/2019 along with notice U/s 142(1) of the Income Tax Act, 1961 was issued vide notice no . ITBA/AST/F/142 (1) / 2019 -2 0 / 1019 683632(1) by fixing the compliance on or before 15/11/2019. In response to this notice the assessee has submitted, reply which is placed on record and reproduced as under. All these facts do prove the appellant's intention seems clear and he had a mind to go on with the AO to complete the reassessment proceedings, On the other hand, the appellant had not filed any concrete proof and evidence in support of his statement that he had requested the AO for supply of copy of recorded reasons and also copy of approval of the competent authority permitted the AO to issue the notice under section 148 of the Act. (A). In the case reported in [2007] 160 Taxman 173 (Allahabad)/[2007] 210 CTR 491 (Allaha...], in the case of Smt. Reena Jain Vs. Commissioner of Income-tax, Circle-1, Meerut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cie case is established and the competent authority has reason to belief regarding Tax escaped assessment, then the authority must be permitted to proceed with the assessment or reassessment. (C). Yet, in another case reported in [2022] 143 taxmann.com 120 (Orissa)/[2023] 290 Taxman 84 (Or...], in the case of Auroglobal Comtrade (P.) Ltd. v. Chairman, Central Board of Direct Taxes, in W.P.(C) NO. 15102 OF 2022, DATED: SEPTEMBER 6, 2022 , the issue before the Hon'ble High Court of Orissa was :: INCOME TAX : Where assessee challenged reopening notice on ground that there was absence of reasons with material particulars for proposed reassessment, since assessee filed revised return in compliance of terms of reopening notice, it would be construed that assessee participated in reassessment proceedings and surrendered to jurisdiction of AO and was conscious about material based on which reassessment proceedings were initiated . The Hon'ble High Court of Orissa had held : Section 148A, read with section 148, of the Income-tax Act, 1961 - Income escaping assessment - Conducting inquiry, providing opportunity before issue of notice (General) - Assessment year 2018-19 - Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide his letter filed with the A.O dated 16.04.2019, had inter alia requested him to supply a certified copy of the reasons to believe and approval of the competent authority based on which notice u/s. 148 of the Act was issued (copy of the letter has been placed on record). Considering the facts above, I am unable to concur with the CIT(Appeals) that the assessee had not filed any request with the A.O. for making available a copy of reasons to believe based on which proceedings u/s. 147 of the Act were initiated in this case. I find that the assessee, during the assessment proceedings, had specifically requested the A.O. for a copy of the reasons to believe that formed the very basis for the reopening of his case u/s. 147 of the Act. However, as stated by the Ld. AR, and rightly so, it transpires that the A.O. had failed to make available the copy of the aforesaid reasons to believe to the assessee before the culmination of the assessment proceedings. Nothing is discernible from the assessment records nor brought to our notice by the Ld. DR, which would prove to the contrary and establish that the copy of the reasons to believe was duly made available to the assessee before the fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. The Assessing Officer despite the judgment of the Supreme Court in GKN Driveshafts (India) Ltd., [2003] 259 ITR 19 (SC) has failed to provide an opportunity to the assessee to submit his objections to the reopening of the assessment. In the affidavit-in-reply, it has been submitted that the assessee was well aware of the reasons for the reopening of the assessment as the reasons were on the record for the assessment year 2007 08. This is clearly a specious explanation. According to counsel appearing on behalf of the Revenue, during the course of the assessment year 2007 08, it has been found that the petitioner has been engaged in under invoicing and it is on that basis that the assessment for the assessment year 2004 05 is sought to be reopened. Even if the submission of the learned counsel were to be correct, reasons have to be communicated to the petitioner. There has admittedly been no communication of reasons to the petitioner. In these circumstances, we are inclined to quash and set aside the impugned order of assessment which has been passed in a brazen violation of the governing principles of law. However, in order to obviate the bar of limitation, we intend to incorpora ..... 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