Non-furnishing reopening reasons despite request vitiates the reopening of assessment. Order passed u/s 148 quashed and declared illegal by ITAT
ABCAUS Case Law Citation:
ABCAUS 1156 (2017) (03) ITAT
Question for determination:
Whether non-furnishing of the reasons for reopening, after the specific request for the same is made by the assessee to the Assessing Officer, vitiates the reopening of assessment.
Assessment Year : 2010-11
Date/Month of Pronouncement: March-2017
Important Case Laws Cited/relied upon:
CIT v. Videsh Sanchar Nigam Ltd.
CIT v. Fomento Resorts and Hotels Ltd.
Brief Facts of the Case:
In the instant case the appellant assessee had not received the copy of the reasons recorded for reopening the assessment, despite request for the same from the Assessing Officer. The issue traveled up to the Tribunal.
Contention of the Respondent Revenue:
The Revenue argued that where the assessee was aware of reasons for reopening the assessment, non-communication of reasons would not be fatal to the validity of reassessment proceedings. The Revenue place reliance on the decision of the ITAT in the case of ITO vs. Smt. Gurinder Kaur.
Observations made by the Tribunal:
The Tribunal observed that in the case of Videsh Sanchar Nigam Ltd. the Tribunal following the judgment of Bombay High Court in Fomento Resorts and Hotels Ltd. held that when the reasons recorded for reopening of the assessment were not furnished to the assessee till date the completion of assessment, the reassessment order cannot be upheld, moreover, Special Leave Petition (SLP) filed by revenue against the decision of in Fomento Resorts and Hotels Ltd. had been dismissed by Supreme Court.
It was further observed that the above decision had been followed in a number of cases by quashing the reassessment proceedings in the following cases:
- Tata International Ltd. v. Dy. CIT
- Telco Dadajee Dhakjee Ltd. v. DClT
- Muller & Phi lips (India) Ltd. v. ITO
- Jeevanlal Jain
It was also observed that the proposition laid down in the case of Smt. Gurinder Kaur did not apply to the facts of the case on hand for the reasons that, it could not be said that the assessee in this case was aware of the reasons for reopening of assessment.
Following the judgment of the Bombay High Court, the assessment order passed u/s 148 read with section 143(3) was quashed as illegal.