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TMI Blog2023 (4) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 (1) TMI 348 - ITAT NEW DELHI] which has also dealt with the issue of non supplying of reasons to believe along with the notice u/s 148 of the Act to the assessee. Appeal of the assessee is allowed. - SHRI SONJOY SARMA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER For the Appellant : Shri Dilip Chatterjee, Advocate For the Respondent : Smt. Ranu Biswas, Addl. CIT, Sr. DR ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal by the assessee is arising out of the order of CIT(A)- 12, Kolkata vide Order No. 40/CIT(A)-12/Kol/Ward-40(1)/2014-15 dated 09.06.2016 against the assessment order passed u/s 143(1)/147 of the Income-tax Act, 1961 (hereinafter referred to as the Act ). 2. Grounds taken by the assessee are as under: i. For that and the facts and circumstances of the case and in law, Ld CIT(A) -12 Kol passed an order while failed to offer any opportunity of being heard, rebuttal, and representing the case /issues involved in the grounds of appeal during course of hearing, hence such act is liable to be void ab-initio, cancelled, and order quashed. ii. For that and in the facts and circumstances of the case and in law , Ld CIT(A)-12 Kol while passing the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r annul, modify, the same during the course of final appeal hearing. 2.1. Brief facts of the case are that assessee is engaged in the business of television software in the name of Beyond Reels . Case of the assessee was reopened by issuing a notice u/s 148 of the Act dated 04.10.2012. Assessee filed his return in response to the said notice, reporting total loss of Rs. 6,92,232/-. Reopening proceedings were initiated on the assessee since he failed to furnish return of income. Assessee challenged the proceedings initiated u/s 147. In the course of assessment proceedings, ld. AO noted that assessee has made certain payments for artist remuneration on which required TDS has not been done and, therefore, he disallowed an amount of Rs. 13,41,360/- u/s 40(a)(ia) of the Act. Similar addition of Rs. 9,60,363/- was made for non-deduction of tax at source in respect of studio hire charges and of Rs. 7,30,832/- in respect of interest paid on unsecured loans on which no TDS was done. Another disallowance of Rs. 45,845/- was made by taking 5% of the expenses towards car hire charges, conveyance and depreciation, on account of personal use. 3. Aggrieved, assessee went in appeal before the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el also placed reliance on the decision of the co-ordinate bench of ITAT, Delhi in the case of Balwant Rai Wadhwa vs ITO in ITA 4806/Del/2010 dated 14.01.2011 wherein it was held that issuance of the notice communication and furnishing of reasons would go hand in hand. The reasons are to be supplied to the assessee before the expiry of period of six years. If it has not been done then validity u/s 148 could not be upheld. It was also held that the notice would be served at any point of time before the expiry of six years, if AO has reasons to believe that income has escaped assessment but, such reasons are also to be communicated to the assessee before the expiry of limitation otherwise validity of such notice could not be sustainable. In this case, the assessment was quashed. 6.2. Per contra, ld. Sr. DR submitted that reopening has been validly done. Assessee participated in the assessment proceedings before the ld. AO and never agitated on the issue i.e. being raised before the Hon ble Bench. 7. We have heard the rival contentions and gone through the material placed on record. From the perusal of the assessment order, we observe that there is no mention about the reasons to beli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uance of the notice under section 148 and the petitioner may now prefer his objections, if any, and thereupon the Assessing Officer be directed to pass a speaking order. In other words, such an argument requires us to sweep all the proceedings emanating from the supply of reasons in September 2004 and culminating in the passing of the order dated 2-3- 2005 under the carpet , as it were. And, starting the process as per the directions given in GKN Driveshafts (India) Ltd. s case (supra) afresh considering the reasons noted in the said form to be the actual reasons for the issuance of the notice under section 148. If we were to accept this argument, we would have to ignore the directions given by the Supreme Court in GKN Driveshafts (India) Ltd. s case (supra) that the Assessing Officer is bound to furnish reasons within a reasonable time. The notice under section 148 was issued on 29-3-2004. The petitioner filed the return and sought reasons by its letter dated 11-5-2004. If the date of filing of the counter-affidavit in this writ petition is taken as the date of communication of the reasons which forms part of the said form, a copy of which is Annexure-A to the counter-affidavit, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the expiry of period of 6 years. If it has not been done then validity u/s 148 could not be upheld. It is not in the income tax proceeding alone. In any proceeding say, civil or criminal, if a summon is issued to the defendant / respondent, is not accompanied with the copy of plaint or complaint then it is to be construed that no valid service of notice has been effected upon the defendant or the respondents whichever may be the case. The notice could be served at any point of time before the expiry of 6 years, if AO has reasons to believe that income has escaped assessment but, such reasons are also to be communicated to the assessee before the expiry of the limitation otherwise validity of such notice could not be sustainable. Being a subordinate authority to the Hon ble High Court, we are bound to follow the authoritative exposition of law at the end of Hon ble High Court . In view of the above discussion, we allow ground No. 2 of the assessee wherein he has pleaded that notice u/s 148 has not been served within the period of limitation upon the assessee. The assessment is not sustainable. It is quashed. 6. Since on the strength of Hon ble Delhi High Court s decision, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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