2013 (6) TMI 891

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....ke of convenience. ITA No. 300/Hyd/13 for AY 2005-06 2. Ground Nos. 1 & 13 are general in nature, hence, need not be adjudicated upon. 3. We will first take up ground No.7 wherein the assessee has raised a legal issue questioning the validity of the assessment order passed u/s 143(3) r.w.s. 147 of the Act due to non communication of reasons recorded for reopening the assessment. 4. Briefly the facts are, the assessee an individual is engaged in film production. For the assessment year under dispute the assessee had filed his return of income on 22/01/2007 declaring total income of ₹ 6,56,500/-. The return was processed u/s 143(1) on 23/06/2007. Subsequently, the AO having reason to believe that income chargeable to tax has escaped....

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....ssed preferred an appeal before the CIT(A). The CIT(A) however confirmed the assessment order by sustaining all the additions made by the AO and dismissed the appeal. 5. The learned AR submitted that assessment order passed u/s 143(3) r.w.s. 147 of the Act is invalid as the AO has not communicated the reasons for reopening the assessment. He submitted that once the assessee complies to the notice issued u/s 148 and seeks communication of reasons for reopening the assessment, the AO is duty bound to communicate the reasons recorded before completing the assessment proceeding. In support of such contention the learned AR relied upon the decision of Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO [125 Taxman 963] and....

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....ceeding. 5. The learned DR on the other had strongly refuting the contention of the learned AR submitted that reasons for reopening were communicated to the assessee by the AO at the time of assessment proceeding. The learned DR also objected to the raising of the legal grounds as they were not raised before the CIT(A). He further submitted that in assessee's case no assessment has been made u/s 143(3) of the Act. The return was only processed u/s 143(1) of the Act, hence, there cannot be any change of opinion. He therefore justified the initiation of proceeding u/s 147 of the Act. 6. We have considered contention of the parties and perused the materials on record. We have also applied our mind to the decisions placed before us. The asses....

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....assessment order passed without communicating the reasons is legally unsustainable. In the facts of the present case there is no dispute that the assessee after complying to the notice u/s 148 has sought communication of reasons for reopening the assessment. This fact is very much clear from assessee's letter dtd. 15/11/11 filed before the AO, a copy of which was also submitted before us. It is the contention of the learned AR that reasons recorded for reopening the assessment were never communicated to the assessee before completing the assessment. In this context we had requested the learned DR to produce the assessment records to show whether reasons recorded were communicated to the assessee or not. The learned DR was fair enough to pro....