TaxTMI 
TaxTMI 
TaxTMI 
2013 (3) TMI 633
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....after the last date of hearing is liable to be annulled."- 3. Since these grounds go to the root of the validity of the assessment order, we heard ld representatives of both parties at length, besides hearing them in respect of other grounds disputing the confirmation of additions made by the Assessing Officer. It is relevant to state that on a stay application filed by the assessee being S.A. No.65/Mum/2013, the Tribunal by its order dated 1.3.2013 granted stay for a period of six months or till disposal of the appeal, whichever comes earlier, for recovery of demand and directed the Registry to fix the appeal for out of turn hearing on 20.3.2013. Accordingly, said appeal was heard on 20.3.2013. 4. In respect of Ground Nos.6 & 7 of appeal, relevant facts are that assessee is a partnership firm engaged in the business of reseller of computer parts and computer accessories and hiring the same. Assessee filed the return of income for assessment year under consideration on 29.9.2008 declaring total income at Rs. 7,67,171/-. The return of income was processed under section 143(1) of the Act accepting the income returned. It is observed that the Assessing Officer initiated reassessmen....
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....before issuing notice u/s.148 of the Act has been provided to the assessee before making the said assessment order u/s.143(3) r.w.s 147 of the Act. 5. At the time of hearing, ld A.R. submitted that assessee has come to know the reasons recorded by the Assessing Officer for the first time when assessee received the order of ld CIT(A), that ld CIT(A) in para 6.2 of the impugned order has reproduced the reasons recorded by the AO. Ld A.R. relying on the decision of Hon'ble Jurisdictional High Court in the case of Commissioner of Income-tax v. Videsh Sanchar Nigam Ltd.,340 ITR 66(Bom) submitted that Their Lordships in the said case relying on earlier decision in the case of CIT v. Fomento Resorts and Hotels Ltd., Income-tax Appeal No. 71 of 2006 decided on November 27, 2006, has held that if the reasons recorded for reopening of the assessment were not furnished to the assessee till the completion of assessment, the reassessment order cannot be upheld. Ld A.R. submitted that the SLP filed by the department against the said decision of Hon'ble Jurisdictional High Court in the case of Fomento Resorts and Hotels Ltd (supra) has been dismissed by the Hon'ble Supreme Court vide order dated....
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.... that the AO recorded the reasons u/s.148(2) r.w.s 147 of the Act before issuing notice to the assessee u/s.148 of the Act. We observe from page 33 of PB that assessee vide its letter dated 28.4.2010 asked the AO to furnish the reasons recorded for reopening of assessment. The AO vide its letter dated 29.4.2010, copy placed at page 34 of PB asked the assessee to file return of income and in respect of reasons stated as under: "As regards to your request for providing reasons for reopening of assessments, the same will be communicated only after filing of returns of income for the aforesaid year." 9. We observe that assessee vide its letter dated 7.5.2010 stated to the AO that the return filed u/s.139 on 29.9.2008 may pleased be treated as filed u/s.148 of the Act. Therefore, it is evident that assessee submitted that the return originally filed u/s.139 of the Act be treated as return filed in response to notice issued u/s.148 of the Act. There is no dispute to the fact that after filing the said letter dated 7.5.2010, it has to be considered as return filed by the assessee in response to issue of notice u/s.148 of the Act. However, the AO did not furnish copy of reasons recorded ....
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.... held that the reopening is bad in law for the reason of nonfurnishing of reasons recorded, we do not go into all other arguments raised in this case on the issue of reopening as they would be academic in nature." 13. We observe that the department filed appeal against the said order of the Tribunal before the Hon'ble High Court and Hon'ble High Court vide its order dated 20.7.2011 reported at 340 ITR 66 (Bom) has confirmed the order of the Tribunal and dismissed the appeal of the department on the ground that reasons recorded for reopening of assessment were not furnished to the assessee till the completion of assessment, the reassessment order cannot be upheld. 14. Similar issue again came up for consideration before the Tribunal in the case of Telco Dadajee Dhackjee Limited (supra) and on account of difference of opinion between the Members of Division Bench, one of the questions referred to the Third Member was as under: "Whether on the facts and in the circumstances of the case, the order of the AO is liable to be quashed or to be set aside where copy of the reasons recorded for taking action u/s.147 were not provided to the assessee in spite of specific requests? 15. The ....
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....n ETA No: 1 & 5/PN/2001 dated 04.04.2006. It was also submitted that the judgment of the Hon'ble Bombay High Court (Panaji Bench) has been confirmed by the Supreme Court by dismissing the Special Leave Petition filed by the CIT by order dated 16.07.2007. The copy of the order of the Supreme Court has also been filed. The judgment of the Hon'ble Bombay High Court (supra) was sought to be distinguished by the learned Senior DR by submitting that it was rendered under a different enactment which did not provide for furnishing of reasons for reopening the assessment to the assessee and since the Bombay High Court has referred to furnishing of reasons for passing an order, it is distinguishable also on the ground that section 148 notice is not an order and failure to furnish reasons recorded for issue of a notice under section 148 of the Income Tax Act is not fatal to the validity of the reopening. 4. I have carefully considered the above submissions. It is true that in the case of GKN Driveshafts (India) Ltd (supra) the Supreme Court has not held that that non-furnishing of the reasons for reopening the assessment affects the validity of the notice under section 148 and what has been ....
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.... to the judgment of the Panaji Bench of the Bombay High Court in CIT vs. Fomento Resorts and Hotels Ltd. (supra) in paragraph 14.9 of its order. In this order the Tribunal has also referred to the order of the Delhi Bench of the Tribunal in the case of ITO vs. Smt Gurinder Kaur (supra) cited by the learned Senior DR before me and has pointed out that the order of the Delhi Bench of the Tribunal is not in consonance with the view taken by the Delhi High Court in the case of New Bank of India Ltd. vs. ITO (1982) 136 ITR 679 (Del). There is thus an order of a Division Bench of the Tribunal in Mumbai which supports the assessee's contention that if the reasons for reopening the assessment are not furnished to the assessee, that is fatal to the validity of notice of reopening issued under section 148 of the Income Tax Act. 5 The learned Senior DR drew my attention to two judgments of the Hon'ble Bombay High Court being (a) Allana Cold Storage Ltd. vs. ITO (2006) 287 ITR 1 (Bom); and (b) Ajanta Pharma Ltd. vs. ACIT (2007) 295 ITR 218 (Bom). l have respectfully gone through these two judgments. In the case of Ajanta Pharma Ltd. (supra), the facts show that the reasons for reopening the a....