AI Drafter 
TaxTMI 
TaxTMI 
2016 (7) TMI 949
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.... of assessee to disclose fully and truly material facts, therefore, re-opening of the assessment u/s 147 is illegal, unjust and void ab initio at the very threshold. 3. That in view of facts and circumstances of the case and in law, the CIT(A) failed to consider that AO merely substituted the report of Dir (Inv) verbatim instead of showing any "Reasons to believe" purported to have been recorded by the AO, hence the notice u/s 148 is bad in law. 4. That in view of facts and circumstances of the case and in law, the CIT(A) failed to consider that requisite satisfaction of Joint Commissioner was not recorded before issuing notice u/s 148. 5. That in view of facts and circumstances of the case and in law, the CIT(A) grossly erred in upholding the actions of AO as re-assessment order passed by AO is arbitrary, without application of mind and in gross violation of principles of natural justice. 6. The CIT(A) has grossly erred on facts and in law in upholding the assessment order assessing the income at Rs. 20,01,190/- . The additions made by the AO and upheld by the CIT(A) are illegal, unjust and bad in law. 7. That in view of facts and circu....
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....f the assessee and made addition accordingly. Aggrieved, the assessee challenged before the learned Commissioner of Income Tax (Appeals) initiation of reassessment proceedings under section 147 of the Act being without jurisdiction and without proper and sufficient opportunity to the assessee, which was in violation of principle of natural justice. The assessee also challenged the addition made on merit. The assessee submitted before the learned Commissioner of Income-tax(Appeals) that the AO had not provided the reasons to believe for reopening the assessment and therefore the action under section 148 of the Act was not justified. The learned Commissioner of Income-tax(Appeals), however referring to the judgment of the Hon'ble Delhi High Court in the case of Rajat Import- Export India Private Limited, 341 ITR 135 (Del) held that at the stage of reopening of the assessment the AO is not required to build a foolproof case for making addition to the assessee's income and all that is required to do that is to form a prima facie opinion or belief that income has escaped assessment, upheld the action of the AO under section 148 of the Act. On merit of the addition, the learned Commissio....
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.... reasons recorded for reopening of the assessment though repeatedly asked by the assessee were furnished only after completion of the assessment. The Tribunal following the judgment of this Court in the case of CIT vs. Fomento Resorts & Hotels Ltd., IT Appeal No. 71 of 2006 decided on 27th Nov., 2006, has held that though the reopening of the assessment is within three years from the end of the relevant assessment year, since 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. Moreover, special leave petition filed by the Revenue against the decision of this Court in the case of CIT vs. Fomento Resorts & Hotels Ltd. (supra) has been dismissed by the apex Court, vide order dt. 16th July, 2007. 3. In this view of the matter, the present appeal is also dismissed with no order as to costs" 7. Similarly, in the case of M/s. Kothari Metals Vs. ITO (supra) the Hon'ble High Court of Karnataka expressed opinion that proceedings for reassessment could not have been taken for non-furnishing of the reasons of reopening of assessment. The relevant paragraph of the said jud....
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.... was covered by the provisions of see. 292B of the Income Tax Act, therefore, we do not find any merit in the contentions of the assessee in this regard. As far as the issuance of notice u/s 11 is concerned, the preliminary condition of not filing of return is satisfied. Therefore, in such a situation, notice can be issued, provided the same is not barred by limitation. However, after issue of notice, if the assessee asks for furnishing of reasons for issuance of such notice, the Assessing Officer is bound to furnish such reasons. The adherence to this procedure is a necessity because at the preliminary stage itself, if the proceedings can be completed if the Assessing Officer gets satisfied with the explanations given by the assessee. it is an undisputed fact that the Assessing Officer, in the present case has not supplied reasons to the assessee, therefore, the notice issued by the Assessing Officer is bad in law and consequently the assessment made in pursuance of such notice is liable to be quashed. In this view of the matter, we cancel the impugned assessment. We order accordingly." 9. The order of this Tribunal was upheld by the Hon'ble jurisdictional High Court ....