2018 (4) TMI 1527

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....ferred to as 'the Act'), dated 19.03.2014. 2. The grievances of the assessee are as follows: "1. (a) That on the facts and in the circumstances of the case, the action of Ld. CIT(A) is unjustified in holding that initiation of re-assessment proceeding U/s 147 is not bad in law. (b) That on the facts and in the circumstances of the case, the findings of Ld. CIT(A) that section 148 and 147 exist also of inadvertent escapement of income is opposed to law and therefore the action of Ld. CIT(A) to dismiss ground No.1 where initiation of proceeding U/s 147 was challenged is liable to be quashed. 2. That on the facts and in the circumstance of the case, Ld. CIT(A) is wrong and unjustified in dismissing ground No. 2 & 3 wherein the appella....

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.... reopening u/s 147/148 of the Act but the ld. CIT(A) rejected the contention of the assessee and held that the assessee has not cooperated during the assessment proceedings and the Assessing Officer after due diligence discovered the escapement of income. While dismissing the appeal of the assessee, the ld. CIT(A) observed as follows: "As far as the appellant's objection that the AO could have found out from the material on record that there was no irregularity in the set off of loss and that the only basis was a misplaced reliance of the AO upon the revenue audit objection, and that there was no "formation of opinion" on the part of the AO, it may be pointed out that the appellant, throughout reassessment proceedings did notcooperate....

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.... which we have already noted in our earlier para and is not being repeated for the sake of brevity. 7. We have given a careful consideration to the rival submissions and perused the materials available on record, we note thatit is an undisputed fact that the reasons recorded u/s 147/148 of the Act, have not been furnished to the assessee during the reassessment proceedings. The reasons recorded by the Assessing Officer should be furnished to the assessee to defend his case,as the principle of natural justice requires that the assessee should be given sufficient opportunity to defend his case andwithout knowing the reasons for reopening, how the assessee can defend his case. 8. We note that for passing an order under section 147 of the Act....

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..../148 of the Act. 9. We note that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the assessee's case under consideration, the reasons were not furnished to the assessee therefore, the reassessment order cannot be upheld.For that we also rely on the judgment, of the Coordinate Bench of ITAT, Kolkata in the case of Bhanu Vyapaar Pvt. Ltd. vs. ITO, Ward-6(4)....