Tribunal Upholds CIT(A)'s Decision to Annul Assessment for Lack of Reasons

The Tribunal dismissed the Revenue's appeal and the assessee's cross-objections, upholding the CIT(A)'s decision to annul the assessment due to the Assessing Officer's failure to provide reasons for reopening the assessment before completion of proceedings. The Tribunal emphasized the importance of supplying reasons as a procedural requirement for a valid assessment, in accordance with established judicial precedents.

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Issues Involved:
1. Appreciation of comments in the remand report.
2. Non-filing of Income Tax Return (ITR) within the due period.
3. Supply of reasons recorded by the Assessing Officer to the assessee.

Issue-wise Detailed Analysis:

1. Appreciation of Comments in the Remand Report:
The Revenue contended that the learned Commissioner of Income Tax (Appeals) [CIT(A)] failed to appreciate the comments made in the remand report. The CIT(A) quashed the assessment order on the grounds that the reasons for reopening the assessment were not supplied to the assessee, which was a procedural requirement as per the judgment of the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. vs. Income Tax Officer [2003] 259 ITR 19 (SC). The CIT(A) relied on multiple case laws to support this decision, emphasizing that the reasons must be provided before the completion of assessment proceedings.

2. Non-filing of Income Tax Return (ITR) within the Due Period:
The Revenue argued that the assessee did not file the ITR within the prescribed period as mentioned in the notice issued under section 148 of the Income Tax Act, 1961. The return was filed only on 07/12/2018, while the assessment was getting time-barred on 31/12/2018. The CIT(A) noted that despite the delay, the Assessing Officer (AO) issued notices under sections 142(1) and 143(2) and considered the return filed by the assessee. Therefore, the return could not be termed as non est (invalid). The Tribunal agreed with the CIT(A), stating that the AO's actions indicated acceptance of the return, thus invalidating the Revenue's argument.

3. Supply of Reasons Recorded by the Assessing Officer to the Assessee:
The core issue was whether the AO was required to provide the reasons for reopening the assessment to the assessee before completing the assessment. The CIT(A) annulled the assessment, citing the failure to provide reasons as mandated by the Supreme Court in GKN Driveshafts (India) Ltd. The Tribunal upheld this decision, noting that the AO provided the reasons only in January 2019, after the assessment was completed on 19/12/2018. The Tribunal emphasized that providing reasons is a jurisdictional requirement, and failure to do so renders the assessment void ab initio. The Tribunal also dismissed the Revenue's reliance on the Madras High Court's judgment in Home Finders Housing Ltd., distinguishing it on the facts that the case involved non-disposal of objections rather than non-supply of reasons.

Conclusion:
The Tribunal dismissed the Revenue's appeal and the assessee's cross-objections. It upheld the CIT(A)'s decision to annul the assessment due to the AO's failure to provide the reasons for reopening the assessment before completing the assessment proceedings, in line with judicial precedents. The Tribunal found no infirmity in the CIT(A)'s order and affirmed that the procedural requirement of supplying reasons is crucial for a valid assessment.

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