Tribunal quashes assessment for lack of reasons, highlighting importance of procedural fairness and Assessee's rights.

Shri Inderjeet Singh Sachdeva, C/o M/s Shubham Nursing Home Versus DCIT, Range-1, Moradabad

Shri Inderjeet Singh Sachdeva, C/o M/s Shubham Nursing Home Versus DCIT, Range-1, Moradabad - [2016] 49 ITR (Trib) 1 Issues:
Challenge to jurisdiction u/s 148, addition of income u/s 144, non-supply of reasons for reopening.

Jurisdiction u/s 148:
The Assessee appealed against the Order by the Ld. CIT(A) confirming the assumption of jurisdiction u/s. 148 by the AO. The AO issued a notice u/s. 148 in 2008 based on information regarding alleged accommodation entries instead of gifts. The Assessee failed to provide evidence of the gifts' genuineness. The Assessee argued that the AO did not supply reasons for reopening, violating natural justice. Citing GNK Driveshafts case, the Assessee contended that non-supply of reasons renders the assessment unsustainable. The Tribunal agreed, emphasizing the necessity of furnishing reasons to enable the Assessee to defend against the reopening. The Tribunal held the reopening invalid due to the AO's failure to provide reasons, thus allowing the appeal solely on the legality aspect.

Addition of Income u/s 144:
The AO assessed the Assessee's income at Rs. 14,47,000 by adding Rs. 12 lakhs as income from alleged accommodation entries, as the Assessee failed to prove the creditworthiness of the donors. The Ld. CIT(A) upheld this addition. However, the Tribunal did not address the addition on merits due to the jurisdiction issue. The Tribunal's decision to allow the appeal solely on the jurisdictional aspect rendered the assessment order quashed without delving into the merits of the addition.

Non-supply of Reasons for Reopening:
The Assessee contended that the AO did not provide reasons for reopening, violating principles of natural justice. The Tribunal, following the GNK Driveshafts case, emphasized the Assessee's right to know the reasons for reopening to present a defense. The Tribunal found the AO's failure to furnish reasons unsustainable in law, leading to the quashing of the assessment order solely on the legality aspect. The Tribunal's decision highlighted the importance of providing reasons for reopening to maintain procedural fairness and uphold the Assessee's rights.

This detailed analysis of the judgment highlights the issues raised, arguments presented, legal principles applied, and the Tribunal's decision, ensuring a comprehensive understanding of the case.