DY. COMMISSIONER OF INCOME TAX-1(1), RAIPUR, RAIPUR V. RAJENDRA KUMAR AGRAWAL, RAIPUR

ITA 323/RPR/2024

AI Insights

The case involves the Deputy Commissioner of Income Tax-1(1), Raipur, as the appellant, and Rajendra Kumar Agrawal, the respondent, concerning the reassessment of income for the assessment year 2011-12. The A.O had reopened the case based on information suggesting bogus purchase bills were used, leading to an addition of Rs.39,05,046 to the assessee's income. The CIT(Appeals) found the reassessment notice to be time-barred and the additions unjustified, a decision which the revenue challenged before the tribunal. The tribunal upheld the CIT(Appeals)' decision, emphasizing the procedural lapse by the A.O in not providing the 'reasons to believe' for reassessment to the assessee.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35770 (ITAT-RAIPUR)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 04-09-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 12-07-2024
• Other Referred Cases: GKN Driveshafts (India) Ltd. Vs. ITO & Ors., Paramjeet Narang Vs. ITO, Gajraj Giri Vs. ITO, Saraswati Garewal vs Income Tax Officer, CIT Vs Trends Electronics, CIT vs Videsh Sanchar Nigam Limited, Mahavir Moulds India P Limited vs ITO, PCIT vs Shodiman Investments (P) Limited, PCIT vs Meenakshi Overseas (P) Limited, Durga Manikanta Traders vs ITO, Bharat Bhushan Verma vs ITO, Mata Road Carriers vs DCIT, CIT Vs. Fomento Resorts & Hotels Ltd., Agarwal Metals and Alloys Vs. ACIT & Ors, Pr. CIT Vs. Jagat Talkies Distributors
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: S PRAVEEN KHANDELWAL; PRAVEEN GOYAL
• Keywords: Reassessment proceedings; Question of law; Corroborative evidences; Bogus purchase; Assessment record; Reason to believe; Bogus
• Section: 148; 143(3); 142(1); 64; 153; 22; 69C; 40A(3)

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 323/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2011-12 The Deputy Commissioner of Income Tax-1(1), Raipur (C.G.) .......अपीलाथȸ / Appellant बनाम / V/s. Rajendra Kumar Agrawal Agrawal Trading Co. H. No. 6, Gandhi Chowk, Neora (C.G.)-493 114 PAN: ACIPA5919L ……Ĥ×यथȸ / Respondent Assessee by : S/shri Praveen Khandelwal & Praveen Goyal, CAs Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 04.09.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 01.10.2024 2 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the revenue is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 17.05.2024, which in turn arises from the order passed by the A.O under Sec. 143(3) r.w.s.147 of the Income-tax Act, 1961 (in short ‘the Act’) dated 22.12.2018 for the assessment year 2011-12. The revenue has assailed the impugned order on the following grounds of appeal: “1. \"Whether on the facts and in the circumstance of the case, and in law, the Id. CIT(A) was justified in terming the notice u/s.148 of the Income Tax Act, 1961 as barred by limitation by stating that no new information was in the possession of the Assessing Officer to re-open the case even if there was sufficient material available on the record in the form of information from Commercial Tax Department of State Government to re-open the case?\" 2. \"Whether on the facts and in the circumstance of the case, and in law, the Id. CIT(A) was justified in deleting the addition of Rs.39,05,046/- made by the Assessing Officer on account of bogus purchase bills?\" 3. The order of Id. C1T(A) is not accordance with laws and facts of the case. 4. Any other ground which may be adduced at the time of hearing.” 2. Succinctly stated, the assessee who is engaged in the business of rice milling and trading had filed his return of income for A.Y. 2011-12 on 30.09.2011, declaring an income of Rs.6,70,950/-. Subsequently, the case 3 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 of the assessee was selected for scrutiny assessment and order u/s. 143(3) of the Act dated 24.02.2014 was passed determining the income of the assessee at Rs.7,70,950/-. 3. The A.O while framing the assessment observed that the assessee had taken bogus purchase bills from the following bogus/non-existent parties: Name of the concern who provides bogus purchase bill Amount of bogus purchase shown (Rs.) M/s. Vishal Enterprises Rs.1,55,000/- M/s. Goyal Jute Udyog Rs.37,50,046/- Total Rs.39,05,046/- Accordingly, the A.O after recording “reasons to believe” initiated proceedings u/s.147 of the Act. Notice u/s.148 of the Act dated 26.03.2018 was issued to the assessee. 4. As the assessee during the course of the reassessment proceedings had failed to substantiate the genuineness of the aforesaid purchase transactions on the basis of supporting documentary evidence, and had also not produced the parties for examination before the A.O, therefore, he held the entire amount of the impugned purchases of Rs.39,05,046/- as bogus and added the same to the income of the assessee that was originally assessed u/s.143(3) of the Act, dated 24.02.2014 at Rs.7,70,950/-. Accordingly, the A.O vide his order passed u/s. 143(3) 4 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 r.w.s. 147 of the Act, dated 22.12.2018 determined the income of the assessee at Rs.46,76,000/-. 5. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “3.2 First provision to section 147 provides that where an assessment under sub section (3) of section 143 has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of relevant assessment year, unless any income chargeable to tax has„ escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section l39 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. The assessing officer should be in the possession of new valid information that income has escaped assessment. In this case the AO stated that it was found that that the assessee has taken bogus purchase bill from the following bogus/non-existent concern. Name of the concern who provides bogus purchase bill Amount of bogus purchase shown (Rs.) M/s. Vishal Enterprises Rs.1,55,000/- M/s. Goyal Jute Udyog Rs.37,50,046/- Total Rs.39,05,046/- The source of this information or the validity of new material on which this information was based was not discussed anywhere in the assessment order. The original assessment order u/s 143(3) in this case dated 24/02/2014 was verified. It is seen that the appellant had submitted details of purchase of packing material i.e. packing material purchased from M/s Goyal Jute Udyog and M/s Vishal Enterprises during original assessment proceedings. It is seen from bills and vouchers that the appellant purchased 5 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 gunny bags worth Rs.39,37,550 from Goyal Jute Udyog and Rs.1,62,750 from Vishal Enterprises. This was verified by the AO during original assessment proceedings before making lumpsum addition of transportation and hamali expenses. Actual purchases were more than what was found by the AO in reassessment proceedings u/s.147. Hence it is concluded that no new information was in the possession of the Assessing Officer. In view of-he above facts of the case and legal provisions, no action could have been taken under section 147 after the expiry of four years from the end of relevant assessment year as the appellant had disclosed all details of purchase of packing materials during original assessment. In this scenario, the last date for issuance of notice u/s.148 of the Act should be 31/03/2016 - whereas the notice in the instant case was issued on 26/03/2018. Therefore, the same is barred by limitation and the notice issued u/s. 148 is invalid. As a result, ground no 1 is allowed. 4. Even though the appeal is allowed on technical grounds, it is imperative that all grounds raised by the appellant are adjudicated. Grounds 2 and 3 are raised against addition of Rs. 39,05,046/- u/s. 69C of the Act being 100 percent of expenditure on account of purchases made from alleged bogus firms. The assessing officer stated that 6 conditions specified by Hon'ble supreme court in case of Pr. CIT Vs Tejua Rohit Kumar Kapadia [2018] 94 taxmann.com 325 (SC) for purchases to be not treated as bogus were not satisfied by the assessee; (a) They are not supported by bills. (b) All payments were not made by account payee cheques. (c) The suppliers have not confirmed the transactions. (d) There is evidence to show that the purchase consideration has come back to the assessee in cash. (e) The sales out of purchases have not been accepted. (f) The suppliers have neither accounted for the purchase made by the assessee nor paid taxes thereon. 4.1 It is seen that the appellant had submitted bills and vouchers along with ledger during original assessment and reassessment proceedings which clearly shows that payment against purchases has been made by account payee cheque to Goyal Jute Udyog. In case of Vishal Enterprises the payments were Made in cash in compliance with the provisions of section 40A(3) of the Act. Confirmations of account from suppliers were also submitted. Even though the AO stated that bank account statement of the supplier/ bogus firm shows that the purchase considerations 6 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 have come back in cash within same day of transactions, no supporting evidence or entry in bank statement was discussed by the AO in assessment order nor confronted to the appellant. Regarding the condition whether sales out of purchases have been accepted, the packing materials were used to pack rice for sales. There is no finding whether more than necessary gunny bags were purchased by the appellant compared to sales and earlier years. Suppliers had issued invoices and confirmed the transactions, which means they have accounted it in books. So prima facie the appellant has satisfied all 6 conditions specified in the case of Tejua Rohit Kumar Kapadia (supra). The AO required the assessee to produce suppliers but in the absence of formal summons u/s.131, the appellant could not enforce their attendance. The assessing officer also required the appellant to produce the details of transportation. But packing materials were delivered by suppliers and purchases were made on CIF basis i.e. freight cost were incurred by the suppliers and the appellant has received the material at its factory premises, therefore, the appellant has not made any separate payment towards the transportation of the goods purchased from these suppliers. In view of above facts and circumstances of the case, gunny bag purchases made by the appellant appears to be genuine and there is nothing on record to prove otherwise. Therefore, grounds 2 and 3 are allowed. 5. Ground no 4 is consequential, hence no need of separate adjudication. In result, the appeal is allowed.” 6. The revenue being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the tribunal. 7. Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short ‘DR’) at the threshold submitted that the CIT(Appeals) had grossly erred in observing that no new information was in the possession of the A.O to re- open the case of the assessee. The Ld. DR submitted that there was sufficient material available with the A.O in the form of information from Commercial Tax Department of State Government which justified the 7 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 reopening of the case. It was submitted by the Ld. DR that as the assessee could not substantiate the authenticity of the purchase transactions with proper evidence, therefore, the A.O had rightly made an addition of the entire amount of such bogus purchases. 8. Shri Praveen Khandelwal, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold of hearing of the appeal had raised a preliminary objection as regards the validity of the jurisdiction that was assumed by the A.O for framing the impugned assessment vide order passed u/s.143(3) r.w.s. 147 of the Act, dated 22.12.2018. The Ld. AR submitted that though the assessee vide his letter dated 11.10.2018 had requested for a copy of “reasons to believe” that were recorded by the A.O for reopening his case, but the A.O without providing the same had proceeded with and framed the assessment vide his order u/s. 143(3) r.w.s.147 of the Act, dated 22.12.2018. The Ld. AR submitted that the copy of the “reasons to believe” had been made available to the assessee for the first time in the course of the present appellate proceedings before the tribunal, i.e. pursuant to the application that was filed by him on 26.08.2024. The Ld. AR in support of his aforesaid contention had filed an “affidavit” dated 03.09.2024 which, reads as under: 8 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 9. The Bench, in order to verify the correct factual position directed the Ld. DR to obtain a report from the A.O. The Ld. DR in compliance to the aforesaid direction of the bench had filed a report of the DCIT-1(1), Raipur, wherein it is stated by him as under: “As per the record available with this office, it is seen that assessee had asked for reason of reopening on 11.10.2018 during the proceedings u/s. 147 for A.Y.2011-12.” 9 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 The Ld. DR on being queried as to whether or not a copy of the “reasons to believe” were provided to the assessee prior to the framing of the assessment by the A.O vide his order u/s. 143(3) r.w.s 147 of the Act, dated 22.12.2018, failed to come forth with any reply. 10. The Ld. AR submitted that as the assessee despite a specific request for a copy of the “reasons to believe” was not provided the same by the A.O, thus he remained divested of his statutory right of objecting to the very basis on which his case was reopened u/s. 147 of the Act. The Ld. AR in support of his contention had relied on the following judicial pronouncements: (i) GKN Driveshafts (India) Limited Vs. ITO (2002) 259 ITR 19 (SC) (ii) Paramjeet Narang Vs. ITO, ITA Nos.22, 23 & 183/RPR/2017, dated 04.08.2022 (iii) Gajraj Giri Vs. ITO (2024) 158 taxmann.com 8 (Raipur-Trib) (iv) Saraswati Garewal vs Income Tax Officer [2024] 158 taxmann.com 37 (Raipur Tri.) (v) CIT Vs Trends Electronics [2015] 379 ITR 456 (Bombay) (vi) CIT vs Videsh Sanchar Nigam Limited [2012] 21 taxmann.com 53 (Bombay) (vii). Mahavir Moulds India P Limited vs ITO 3(1), Raipur, in ITA No. 85/RPR/2024 (Raipur Tri.) (viii) PCIT vs Shodiman Investments (P) Limited [2018] 93 taxmann.com 153 (Bombay) (ix) PCIT vs Meenakshi Overseas (P) Limited [2017] 395 ITR 677 (Delhi) 10 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 (x) Durga Manikanta Traders vs ITO, ITA No.59/RPR/2019 (Raipur Tri.) (xi). Bharat Bhushan Verma vs ITO 1(2), Raipur, ITA No. 236/RPR/2023 (Raipur Tri.) (xii) Mata Road Carriers vs DCIT, ITA No.79/RPR/2016 (Raipur Tri.) 11. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 12. As the Ld. AR by way of a preliminary objection had objected to the very assumption of jurisdiction by the A.O for framing the assessment vide his order passed u/s.143(3) r.w.s 147 of the Act, dated 22.12.2018, therefore, I shall first deal with the same. 13. The Ld. AR based on his preliminary objection has assailed before me the sustainability of the assessment framed by the A.O without making available a copy of the “reasons to believe” which the assessee had specifically requested for after duly complying with the notice u/s 148 of the Act. It is the claim of the Ld. AR that the assessee had vide his letter dated 11.10.2018, Page 16-17 of APB, inter alia, requested the A.O to make available a copy of the “reasons to believe” based on which his case was reopened u/s.147 of the Act. For the sake of clarity, the letter dated 11.10.2018 is culled out as under (relevant extract): 11 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 “The assessee has filed return of income against the notice issued u/s.148 of the Act vide acknowledgement no. 61290319240418 dated 25.04.2018, assessee has requested for copy of reason recorded u/s.148(2) of the Act, the same is not provided to the assessee. So, its kind request before your honor, kindly provide the copy of reason recorded so that objection on the same (if any) can be filed by the assessee. Further, being a tax compliant assessee, assessee is furnishing point wise reply to notice u/s 142(1) of the Act………….” 14. As is discernible from the record, it transpires that though the CIT(Appeals) had considered the assessee’s contention that he had filed a letter dated 11.10.2018 before the A.O requesting for a copy of the “reasons to believe” for reopening his case, but had not found favour with the same. The CIT(Appeals) had rejected the assesee’s claim that the A.O had grossly erred in law and facts of the case in assuming jurisdiction and framing the assessment u/s. 143(3) r.w.s. 147 of the Act, dated 22.12.2018 without making available to the assessee a copy of the “reasons to believe” based on which his concluded assessment was reopened for four reasons, viz. (i) that the assessee had requested for a copy of the “reasons to believe” after 6 months from the date of issue of notice u/s. 148 of the Act; (ii) that it was not clear as to whether or not the A.O had replied to the assessee’s letter dated 11.10.2018 requesting for a copy of “reasons to believe”; (iii) that as the assessee himself had in his letter dated, 11.10.2018 (supra) discussed the reasons based on which his case was reopened u/s. 147 of the Act, therefore, he was well aware about the same; and (iv) that even otherwise the A.O in his letters/SCN’s had 12 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 discussed the reasons based on which the concluded assessment of the assessee was reopened. However, the contention of the assessee was rejected by the CIT(Appeals) observing as under: “3. Ground no 1 raised by the appellant is that the notice issued u/s 148 of the Act is time barred and the assessment order passed u/s 147 r.w.s. 143(3) of the Act is bad in law. The appellant submitted that the assessment order has been passed without furnishing of copy of reasons recorded to the appellant even though the appellant requested for the same. Appellant filed letter dated 11.10.2018 before the AO, requesting for copy of reasons recorded for reopening assessment. This demand was made after lapse of more than 6 months from the date of issue of notice u/s 148. It is not clear whether the assessee received a reply for this letter. But in the same letter para7, the assessee himself had discussed the reason for reopening, i.e. purchase of packing material, which means the appellant was aware of the reasons for reopening. Moreover in the notices and the show cause issued by the AO, reason for reopening was thoroughly discussed. So the assessee was aware of reasons for reopening and sufficient opportunity was available for the appellant to explain his case. Hence this argument is rejected.” 15. I have thoughtfully considered the contentions advanced by the ld. authorized representatives of both the parties as regards the issue in hand, i.e. sustainability of the order passed by the A.O u/s. 143(3) r.w.s. 147 of the Act dated 22.12.2018 in the backdrop of the orders of the lower authorities. 16. Admittedly, it is a matter of fact borne from record that the assessee had complied with the notice u/s.148 of the Act, dated 26.03.2018, and had filed his return of income on 25.04.2018, Page 15 of APB. The assessee after filing his return of income in compliance to notice issued 13 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 u/s. 148 of the Act, had admittedly filed a letter dated 11.10.2018 with the A.O, wherein he had, inter alia, requested him to make available a copy of the “reasons to believe” based on which his concluded assessment was reopened. For the sake of clarity, the copy of the letter dated 11.10.2018, Page 16 of APB is culled out as under (relevant extract): “The assessee has filed return of income against the notice issued u/s.148 of the Act vide acknowledgement no. 61290319240418 dated 25.04.2018, assessee has requested for copy of reason recorded u/s.148(2) of the Act, the same is not provided to the assessee. So, its kind request before your honor, kindly provide the copy of reason recorded so that objection on the same (if any) can be filed by the assessee. Further, being a tax compliant assessee, assessee is furnishing point wise reply to notice u/s 142(1) of the Act………….” I find on a perusal of the record that the A.O in the course of the assessment proceedings, had failed to accede to the aforesaid request of the assessee and had not made available to him a copy of the “reasons to believe”, based on which, his concluded assessment was reopened. 17. I have given a thoughtful consideration to the observation of the CIT(Appeals), who had upheld the validity of the jurisdiction that was assumed by the A.O for framing the assessment vide order passed u/s. 147 r.w.s. 143(3) of the Act, dated 22.12.2018, despite the failure on the part of the A.O to make available a copy of the “reasons to believe” to the assessee who had in the course of the assessment proceedings specifically requested for the same. Apropos the CIT(Appeals)’s observation that no 14 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 failure could be attributed to the A.O for making available copy of the “reasons to believe” to the assessee for the reason that the latter had requested the same after 6 months from the date of issuance of notice u/s. 148 of the Act, dated 26.03.2018, I am unable to concur with the same. 18. At the threshold, I may herein observe that though the assessee had after filing his return of income in compliance to the notice u/s. 148 of the Act on 25.04.2018 applied for a copy of “reasons to believe” on 11.10.2018, but considering the fact that the A.O had framed the assessment vide his order u/s. 143(3) r.w.s. 147 of the Act, dated 22.12.2018 i.e. after lapse of a period more than 2 months from the date, on which, the assessee had made the aforesaid request, there was no justifiable reason for the A.O in not providing a copy of the same to the assessee. 19. As regards the CIT(Appeals)’s observation that nothing could be gathered from the record as to whether or not the A.O had replied to the assessee’s letter dated 11.10.2018, it would be relevant to point out that the A.O i.e. DCIT-1(1), Raipur had filed before me (through the Ld. DR) an email/letter wherein, he had confirmed that the assessee in the course of the assessment proceedings, had vide his aforesaid letter requested for a copy of the “reasons to believe”. Ostensibly, there is nothing discernible from the record which would reveal that a copy of the “reasons to believe” was made available by the A.O to the assessee before culmination of the 15 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 assessment proceedings. Rather, the assessee had filed before me an “affidavit”, dated 03.09.2024, wherein he had deposed that despite the fact that he had in the course of the assessment proceedings after filing his return of income in response to notice u/s. 148 of the Act on 25.04.2018, therein, vide letter dated 11.10.2018 had specifically requested for a copy of “reasons to believe” but the same were not made available to him, and the assessment order was passed on 22.12.2018. Apart from that, the assessee had deposed that it was only thereafter, pursuant to his letter dated 26.08.2024, i.e. in the course of the present proceedings before the Tribunal, that the A.O had made available a copy of the “reasons to believe” on 27.08.2024. I, thus, based on my aforesaid observations am of the view that the failure on the part of the A.O to make available a copy of the “reasons to believe” to the assessee in the course of the assessment proceedings can safely be gathered based on the aforesaid facts. In fact, the A.O/Ld. DR had not led any material/evidence to dislodge the aforesaid claim of the assessee. 20. As regards the observation of the CIT(Appeals) that as not only the A.O in his notices/SCNs discussed the reasons, based on which, the case of the assessee was reopened u/s. 147 of the Act, but also, as the assessee in his letter dated 11.10.2018 (supra) had discussed the same, therefore, the assessee cannot claim that he had remained unaware/oblivion as to why his case was reopened, I am unable to persuade myself to subscribe to 16 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 the same. I am of a firm conviction that the failure on the part of the A.O to make available a copy of the “reasons to believe”, which formed the basis for reopening of the assessee’s concluded assessment goes to the very root of the validity of the jurisdiction assumed by the A.O for framing the impugned assessment. The Hon’ble Apex Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO & Ors. (2003) 259 ITR 19 (SC), had observed that the assessee after obtaining a copy of the “reasons to believe” is vested with a statutory right to file his objections before the A.O, which the latter is required to dispose off on the basis of a speaking order. As in the case before me there has been a complete violation of the applicable principle of law by the A.O, who had despite a specific request by the assessee failed to communicate to him the “reasons to believe” that had formed the very basis for reopening of his concluded assessment u/s.147 of the Act. As stated by the Ld. AR, and rightly so, the assessee had remained divested of his statutory right of raising objection to the very basis on which his case was reopened u/s.147 of the Act. In my view, the failure of the A.O to make available a copy of the “reasons to believe” to the assessee, who had specifically requested for the same after filing his return of income in response to notice u/s.148 of the Act is nothing short of a brazen violation of the governing principles of law. Accordingly, I am unable to concur with the CIT(Appeals) that as the assessee was well conversant with the reason as to why his case was reopened u/s. 147 of 17 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 the Act, therefore, he could not thereafter carry a grievance that the A.O had failed in his statutory duty to make available a copy of the “reasons to believe”, based on which, proceedings u/s. 147 of the Act were initiated in his case. I am of the view that the CIT(Appeals) had absolutely lost sight of the fact that the assessee could have raised an objection to the reopening of his case only if a copy of the “reasons to believe” would have been made available to him. Also, in case the order passed by the A.O disposing off the objections raised by the assessee were not to be accepted by the latter, then he was vested with a statutory right to carry the matter by filing a writ petition before the Hon’ble High Court. The assessee could have exercised his aforesaid statutory right only if a a copy of the “reasons to believe” would have been supplied to him, and could not have proceeded with on the basis of his knowledge about the same. 21. I am of a firm conviction that the failure on the part of the A.O to make available copy of the “reasons to believe” to the assessee who after complying with the notice u/s. 148 of the Act had specifically requested for the same, therein goes to the very root of the validity of the jurisdiction assumed by the A.O for framing the impugned assessment u/s. 143(3) r.w.s. 147 of the Act, dated 22.12.2018. 22. I find that the Hon’ble High Court of Bombay in the case of CIT Vs. Trends Electronics (2015) 379 ITR 456 (Bom.), had observed that 18 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 where reasons for reopening of the assessment were not furnished to the assessee despite the same were sought for by the latter, the reassessment order being bad in law was liable to be quashed. For the sake of clarity, the observations of the Hon’ble High Court are culled out as under: “8. We find that the impugned order merely applies the decision of the Apex Court in GNK Driveshafts (India, Ltd. (supra). Further it also follows the decision of this Court in Videsh Sanchanr Nigam Ltd. (supra) in holding that an order passed in reassessment proceedings are bad in law in the absence of reasons recorded for issuing reopening notice under Section 148 of the Act being furnished to the assessee when sought for. It is axiomatic that power to reopen a completed assessment under the Act is an exceptional power and whenever revenue seeks to exercise such power, they must strictly comply with the prerequisite conditions viz. Reopening of reasons to indicate that the Assessing Officer had reason to believe that income chargeable to tax has escaped assessment which would warrant the reopening of an assessment. These recorded reasons as laid down by the Apex Court ,must be furnished to the assessee when sought for so as to enable the assessee to object to the same before the Assessing Officer. Thus in the absence of reasons being furnished, when sought for would make an order passed on reassessment bad in law. The recording of reasons (which has been done in this case) and furnishing of the same has to be strictly complied with as it is a jurisdictional issue. This requirement is very salutary as it not only ensures reopening notices are not lightly issued. Besides in case the same have been issued on some misunderstanding/misconception, the assessee is given an opportunity to point out that the reasons to believe as recorded in the reasons do not warrant reopening before the reassessment proceedings are commenced. The Assessing Officer disposes of these objections and if satisfied with the objections, then the impugned reopening notice under Section 148 of the Act is dropped/withdrawn otherwise it is proceeded with further. In issues such as this, i.e. where jurisdictional issue is involved the same must be strictly complied with by the authority concerned and no question of knowledge being attributed on the basis of implication can arise. We also do not appreciate the stand of the revenue, that the respondent- assessee had asked for reasons recorded only once and 19 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 therefore, seeking to justify non-furnishing of reasons. We expect the state to act more responsibly. 9. In view of the fact that the order of the Tribunal has only applied the settled position of law in allowing the respondent- assesse’s appeal. No substantial question of law arises for our consideration.” Further, I find that the Hon’ble High Court of Bombay earlier in the case of CIT Vs. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (Bom.) had approved the view taken by the Tribunal wherein the latter had followed its earlier judgment in the case of CIT Vs. Fomento Resorts & Hotels Ltd. ITA No.71 of 2006, dated 27.11.2006, and, had inter alia, held that where the reasons recorded for reopening of the assessment were not furnished to the assessee till completion of the assessment, the reassessment order could not be upheld. The Hon’ble High Court while concluding as herein above, had observed that the Special Leave Petition (SLP) that was filed by the revenue against its order in the case of CIT Vs. Fomento Resorts & Hotels Ltd. (supra) was dismissed by the Hon’ble Apex Court vide its order dated 16.07.2007. 23. Also, a similar view had been taken by the Hon’ble High Court of Bombay in the case of Agarwal Metals and Alloys Vs. ACIT & Ors (2012) 346 ITR 64 (Bom.) and the Hon’ble High Court of Delhi in the case of Pr. CIT Vs. Jagat Talkies Distributors (2017) 85 taxmann.com.189 (Del). 20 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 24. I further find that similar issue had been adjudicated by a division bench of the ITAT, Raipur in favour of the assessee in the case of Paramjeet Narang L/h. Shri Brij Mohan Narang Vs. ITO-2(2), Bilaspur, ITA No. 22 & 23/RPR/2017 & ITA No. 183/RPR/2017, dated 04.08.2022 wherein, the Tribunal had quashed the assessment framed by the A.O, observing as under: “9. Controversy involved in the present appeal lies in a narrow compass, i.e., sustainability of the assessment framed by the A.O without making available a copy of the “reasons to believe” to the assessee who after duly complying with the notice u/s 148 of the Act is stated to have specifically requested for the same. Before us, it is the claim of the Ld. AR that the assessee had vide a letter dated 30.10.2012, inter alia, requested the A.O to make available a copy of the “reasons to believe” on the basis of which his case was reopened u/s.147 of the Act. In order to fortify his aforesaid claim the Ld. AR had taken us through the aforesaid letter dated 30.10.2012 (supra), on the basis of which the assessee had requested for a copy of “reasons to believe”, Page 32 of APB, which reads as under: “To, The Income Tax Officer Date :30.10.2012 Ward-1(1), Bilaspur (C.G.) Assessee : Shri Brijmohan Narang C. G. Plaza, Bilaspur. Reference : Your notice under section 148 of the Income Tax Act, 1961 For assessment year 2009-10 Subject : COMPLIANCE Dear Sir, 1. The assessee has already filed the Return of income as per particulars given below 21 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 Date of filing :18.03.2021 Acknowledgement No. : 0131010772 Filed with : ITO, Ward-2(2), Bilaspur 2. Photocopy of the acknowledgement for filing the same is enclosed herewith. 3. Kindly treat the aforesaid return of income as filed in compliance to the notice under reference. 4. Your goodself is requested to kindly issue us certified copy of the reasons recorded and approval obtained, if any, for issuance of Notice under reference to enable us to raise our objections. Thanking you, Sd/- Yours faithfully V.K Khatri (Counsel to the assessee)” As per the assessment records, it transpires that the A.O had vide an order sheet entry made a reference of the aforesaid letter dated 30.10.2012 (supra) that was filed by the assessee’s Counsel viz., Shri V.K.Khatri, CA, which reads as under: “30.10.2012: A letter received in Dak counter from Shri V.K Khatri, CA and Counsel for the a; in her written reply the counsel of the assessee stated that the return of income filed on 18.03.2011 may be treated as return filed in compliance to notice u/s.148” 10. As the assessee had claimed that the A.O had despite specific request failed to make available a copy of the “reasons to believe” on the basis of which his case was reopened u/s.147 of the Act, therefore, in order to verify the veracity of his said claim we had called for the assessment records and perused the same. On a perusal of the records, we find that the assessee in the course of the assessment proceedings had specifically requested the A.O for a copy of the “reasons to believe” that formed the very basis for reopening of his case u/s.147 of the Act. However, as stated by the Ld. AR, and rightly so, it transpires that the A.O had failed to make available the copy of the aforesaid “reasons to believe” to the assessee prior to the culmination of the assessment proceedings. Nothing is either discernible from the assessment records nor brought to our notice by the Ld. DR which would prove to the contrary and therein, establish that the copy of the “reasons to 22 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 believe” were duly made available to the assessee prior to the framing of the assessment by the A.O vide his order passed u/s. 143(3) r.w.s.147 dated 29.03.2014. 11. After having given a thoughtful consideration to the issue in hand, we are of the considered view that the failure on the part of the A.O to make available to the assessee a copy of the “reasons to believe” which formed the basis for reopening of his case goes to the very root of the validity of jurisdiction that was assumed by him for framing the impugned assessment. We, say so, for the reason that as the assessee despite specific request for a copy of the “reasons to believe” was not provided with the same by the A.O, thus, he remained divested of his statutory right of objecting to the very basis on which his case was reopened under section 147 of the Act. As stated by the Ld. AR, and rightly so, as held by the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO & Ors. (2003) 259 ITR 19 (SC), the assessee after obtaining a copy of the “reasons to believe” is vested with a statutory right to file his objections before the A.O, which the latter is required to dispose off on the basis of a speaking order. As in the case before us there has been a complete violation of the applicable principle of law by the A.O, who had despite specific request by the assessee failed to communicate the “reasons to believe” that had formed the very basis for reopening of his assessment u/s.147 of the Act, therefore, the very assumption of jurisdiction by him and framing of the impugned assessment cannot be sustained and is liable to be struck down on the said count itself. Our aforesaid view is supported by the judgment of the Hon’ble High Court of Bombay in the case of Agarwal Metals and Alloys Vs. ACIT & Ors. (2012) 346 ITR 64 (Bom.). In its aforesaid order, the Hon’ble High Court had after taking cognizance of the fact that the A.O in the case before them had failed to communicate the “reasons to believe” on the basis of which the case of the assessee was reopened, quashed the assessment by treating the same as having been passed in a brazen violation of the governing principles of law. The relevant observations of the Hon’ble High Court are culled out as under: “4. On these admitted facts, it is evident that there has been a complete violation of the applicable principles of law by the Assessing Officer. The Assessing Officer was required to communicate the reasons for reopening the assessment which he has failed to do. The Assessing Officer despite the judgment of the Supreme Court in GKN Driveshafts (India) Ltd., [2003] 259 ITR 19 (SC) has failed to provide an opportunity to the assessee to submit his objections to the reopening of the assessment. In the affidavit-in-reply, it has been 23 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 submitted that the assessee was well aware of the reasons for the reopening of the assessment as the reasons were on the record for the assessment year 2007–08. This is clearly a specious explanation. According to counsel appearing on behalf of the Revenue, during the course of the assessment year 2007–08, it has been found that the petitioner has been engaged in under invoicing and it is on that basis that the assessment for the assessment year 2004–05 is sought to be reopened. Even if the submission of the learned counsel were to be correct, reasons have to be communicated to the petitioner. There has admittedly been no communication of reasons to the petitioner. In these circumstances, we are inclined to quash and set aside the impugned order of assessment which has been passed in a brazen violation of the governing principles of law. However, in order to obviate the bar of limitation, we intend to incorporate a protective stay in order to enable the Assessing Officer to proceed further in accordance with law.” Also, a similar view had been taken by the Hon’ble High Court of Delhi in the case of Pr. CIT Vs. Jagat Talkies Distributors (2017) 85 taxmann.com 189 (Del.). In its aforesaid order, the Hon’ble High Court relying on the judgment of the Hon’ble High Court of Bombay in the case of CIT Vs. Trend Electronics, ITA No.1867 of 2013, had held, that on account of the failure of the A.O to make available to the assessee a copy of the reasons for reopening of the assessment u/s.147 of the Act, the re-assessment proceedings would stand vitiated in law. Accordingly, as in the case before us, the A.O despite specific request of the assessee had failed to provide to him the copy of the reasons to believe on the basis of which his case was reopened u/s.147 of the Act, therefore, as per the aforesaid settled position of law the assessment framed by the him being devoid and bereft of valid assumption of jurisdiction cannot be sustained and is herein quashed.” 25. Apart from that, a similar view had been taken by the ITAT, Raipur in the case of Gajraj Giri Vs. ITO, ITA No.222/RPR/2023, dated 06.09.2023. The Tribunal following its earlier order passed in the case of Paramjeet Narang L/h. Shri Brij Mohan Narang Vs. ITO-2(2), Bilaspur 24 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 (supra), had observed that where the A.O had issued a reopening notice against the assessee, but failed to make available a copy of the “reasons to believe” that had formed the basis for reopening his case u/s. 147 of the Act, the impugned assessment being devoid of valid assumption of jurisdiction was liable to be quashed. Further, the aforesaid view was also reiterated by the ITAT, Raipur in the case of Saraswati Garewal Vs. ITO (2024) 158 taxmann.com 37 (Raipur). 26. I, thus, respectfully following the aforesaid judicial pronouncements am of the view, that as in the case before me the A.O had despite specific request of the assessee failed to provide to him a copy of the “reasons to believe” on the basis of which his case was reopened u/s.147 of the Act, therefore, as per the aforesaid settled position of law, the assessment framed by him being devoid and bereft of any valid assumption of jurisdiction cannot be sustained and is herein quashed. 27. As I have quashed the assessment for want of valid assumption of jurisdiction by the A.O u/s.147 of the Act, therefore, I refrain from adverting to the contentions based on which the revenue has assailed the order passed by the CIT(Appeals) which, having been rendered as merely academic in nature are left open. 25 DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal ITA No. 323/RPR/2024 28. In the result, appeal of the revenue is dismissed in terms of the aforesaid observations. Order pronounced in open court on 01st day of October, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 01st October, 2024. ****SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "