Tribunal overturns reassessment due to failure to provide reasons, emphasizing assessee's right to challenge assessment order

The tribunal allowed the appeal filed by the assessee, declaring the reassessment invalid due to the assessing officer's failure to provide reasons recorded for re-opening before completing the assessment. The tribunal emphasized the significance of furnishing reasons to the assessee to enable them to challenge the assessment order properly. The reassessment was annulled solely based on the non-furnishing of reasons, without delving into the case's merits.

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Issues: Validity of reassessment due to non-furnishing of reasons recorded to the assessee before completion of assessment.

Analysis:
1. The appeal was filed by the assessee against the Order of the Commissioner of Income Tax (Appeals)-2, Chennai, in relation to the assessment year 2006-07.
2. The assessee had initially filed a return of income admitting a loss, which was accepted by the assessing officer. However, the assessment was later re-opened by issuance of notice under section 148 in 2013.
3. The assessee requested a copy of the reasons recorded for the re-opening, but the reasons were not provided before the completion of the assessment. The assessee raised objections based on non-furnishing of reasons, citing legal precedents.
4. The assessing officer argued that the reasons should have been provided as directed to the IT Inspector. However, the tribunal found that no evidence was produced to show that the reasons were actually provided to the assessee.
5. Citing decisions of the Bombay High Court and the High Court of Madras, the tribunal held that failure to furnish reasons to the assessee before completion of assessment rendered the reassessment invalid. The tribunal annulled the reassessment on this ground without delving into the merits of the case.
6. The tribunal emphasized the importance of providing reasons to the assessee to enable them to raise objections and challenge the assessment order through proper legal procedures.
7. Ultimately, the appeal filed by the assessee was allowed, and the reassessment was declared invalid due to non-furnishing of reasons recorded before completion of assessment.

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