Alapati Kasi Subrayan, Duvva V. The Income Tax Officer, Ward-1, Tanuku

ITA 114/VIZ/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8866 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Reopening of assessment; Unexplained cash credit; Principle of natural justice; Validity of assessment; Reassessment proceedings; Set aside
• Section: 143(3); 142(1); 133A; 147; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO S . 113 - 116 /VIZ/ 201 8 ( / ASSESSMENT YEAR: 20 0 8 - 0 9 TO 2011 - 12 RESPECTIVELY ) ALAPATI KASI SUBRAYAN D.NO.2 - 51/2 NEAR CANAL ROAD DUVVA VS INCOME TAX OFFICER WARD - 1 TANUKU ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI , AR / RESPONDENT BY : SMT. SUMAN MALIK, AR / DATE OF HEARING : 20 . 1 2 . 2018 / DATE OF PRONOUNCEMENT : 21 . 1 2 .2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: TH E S E APPEAL S ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS ) [CIT(A)] - 12 , HYDERABAD VIDE APPEAL NO.10327/2017 - 18 DATED 06.03.2018 FOR THE A SSESSMENT Y EAR S(A.YS.) 2008 - 09 TO 2011 - 12 . SINCE THE FACTS INVOLVED IN ALL THESE APPEALS ARE IDENTICAL, THE APPEALS ARE CLUBBED, HEARD TOGETHER AND A COMMON ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AS UNDER. 2 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA 2. ALL THE APPEALS ARE RELATED TO THE ISSUE OF NON - COMMUNICATION OF REASONS RECORDED FOR REOPENING THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS ACT). THE ASSESSEE RAISED FOUR IDENTICAL GROUNDS IN ALL THE APPEALS WHICH READS AS UNDER : 1 . THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE FACTS AND ALSO THE LAW APPLICABLE TO THE FACTS OF THE CASE. 2. THE ASSESSING OFFICER DID NOT SUPPLY COPY OF THE R EASONS RECORDED FOR ISSUE OF NOTICE A'S 148 OF THE ACT AND CONSEQUENTLY THE ENTIRE REASSESSMENT PROCEEDINGS ARE LIABLE TO BE QUASHED 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 10,22,550/ - MADE BY THE ASSESSING OFFICER TOWARDS UNEXPLAINED CASH CREDITS A/S 68 OF THE ACT, 1961. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF APPEAL HEARING DURING THE APPEAL HEARING, THE LD.AR ARGUED ONLY ONE GROUND I.E. GROUND NO.2 AND THE REMAINING GROUNDS WERE NOT ARGUED. THEREFORE, GROUND NOS. 1,3 AND 4 ARE DISMISSED AS NOT PRESSED. 3. THE ONLY ISSUE IN T HIS APPEAL IS NON - COMMUNICATION OF REASONS TO THE ASSESSEE FOR REOPENING OF ASSESSMENT. IN THIS CASE, THE ASSESSEE HAS NOT FILED THE RETURNS OF INCOME FOR THE A.Y. 2008 - 09.2009 - 10,2010 - 11 AND 2011 - 12. A SURVEY U/S 133A WAS CONDUCTED IN THIS CASE AND DUR ING THE COURSE OF SURVEY CERTAIN INCRIMINATING MATERIAL WAS FOUND AND IMPOUNDED 3 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA BY THE AO. CONSEQUENTLY, THE AO ISSUED NOTICE U/S 148 AND THE ASSESSEE FILED THE RETURN OF INCOME ADMITTING TOTAL INCOME AS UNDER : A.Y. RETURNED INCOME (RS.) 2008 - 09 1,02,07 3/ - 2009 - 10 1,00,099/ - 2010 - 11 1,46,628/ - 2011 - 12 ( - )74,344/ - 4. SUBSEQUENTLY, THE AO ISSUED NOTICE U/S 142(1) , 143(2) AND COMPLETED THE ASSESSMENTS U/S 147 R.W.S. 143(3) OF THE A CT FOR THE A.YS 2008 - 09 TO 2011 - 12 AND ASSESSED THE TOTAL INCOME AS UNDER: A.Y. ASSESSED INCOME 2008 - 09 11,24,623/ - 2009 - 10 13,02,649/ - 2010 - 11 14,21,178/ - 2011 - 12 12,63,100/ - IT IS OBSERVED THAT T HERE WAS A TYPOGRAPHICAL ERROR IN THE DATE OF ORDER WHICH WAS TYPED AS 28.03.2015 INSTEAD OF 28.03.2016 . THE LD.DR EXPLAINED THAT THE CORRECT DATE OF PASSING THE ORDER WAS 28.03.2016 AND TAKEN THE SUPPORT OF THE DEMAND NOTICE WHICH WAS ISSUED ON 28.03.2016 . HENCE, WE ACCEPT THE CONTENTION OF THE LD.DR AND HOLD THAT THE ORDERS WERE PASSED U/S 143(3) ON 28.03. 2016. 4 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA 5. AGAINST THE ORDERS PASSED BY THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND CHALLENGED THE VALIDITY OF ASSESSMENT AND SUBMITTED DURING THE APPEAL PROCEEDINGS THAT THE AO DID NOT FURNISH THE COPY OF THE REASONS RECORDED FOR ISSUE OF NOTI CE U/S 148 IN SPITE OF THE ASSESSEES REQUEST AND ARGUED THAT THE ASSESSMENT MADE U/S 148 IS INVALID AND RELIED ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF SRI SARVARAYA SUGARS LTD., IN I.T.A. NOS.294,295,576/VIZ/2014 DATED 20.12.2017, BUT DID NOT SUC CEED BEFORE THE CIT(A). THE LD.CIT(A) OBSERVED THAT THE ASSESSEE HAS WRITTEN A LETTER ON 21.01.2016 AND 08.08.2016 TO THE AO REQUESTING TO FURNISH THE REASONS FOR ISSUE OF NOTICE U/S 148, WHICH WAS DULY REPLIED BY THE AO STATING THAT THE REASONS WERE COMM UNICATED TO THE LD.AR DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND WAS NOTED BY LD.AR , THUS VIEWED THAT THE AO COMPLIED WITH THE REQUEST OF THE ASSESSEE . SINCE, THE REASONS WERE COMMUNICATED TO THE LD.AR, THE LD.CIT(A) REJECTED THE CONTENTION OF THE ASS ESSEE THAT THE REASONS WERE NOT COMMUNICATED AND ACCORDINGLY DISMISSED THE APPEAL OF THE ASSESSEE ON THIS GROUND. 6. AGAINST THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. DURING THE APPEAL HEARING, THE LD.AR SUBMITTED THAT THE ASSESSEE HAS WRITTEN A LETTER TO THE AO REQUESTING FOR COMMUNICATION OF THE REASONS VIDE 5 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA LETTER DATED 21.01.2016 , B UT THE AO DID NOT COMMUNICATE THE REASONS , HENCE THE ASSESSMENT MADE U/S 143(3) R.W.S. 147 IS INVALID . THE LD.AR FURTHER SUBMITTED THAT IT IS MANDATORY ON THE PART OF THE AO TO SUPPLY THE COPY OF THE REASONS RECORDED AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF G KN DRIVESHAFTS (INDIA) LTD , [259 ITR 19] . THE LD.AR ARGUED THAT IN THE INSTANT CASE, THE AO DID NOT SUPPLY THE COPY OF THE REASONS, HENCE THE ASSESSMENT MADE U/S 147 R.W.S. 143(3) IS VOID - AB - INITIO AND REQUESTED TO SET ASIDE THE ORDERS OF THE LOWER AUTHORI TIES AND QUASH THE PROCEEDINGS. THE LD.AR FURTHER SUBMITTED THAT THOUGH THE LD.CIT(A) IN HIS ORDER STATED THAT THE AR OF THE ASSESSEE HAS NOTED THE REASONS DULY SIGNING THE ORDER SHEET, THE SAME MAY NOT BE EQUATED WITH THE COMMUNICATION OF COPY OF THE REAS ONS RECORDED BY THE AO. THE LD.AR ARGUED THAT IT IS MANDATORY REQUIREMENT AS PER THE DECISION OF HONBLE SUPREME COURT TO SUPPLY THE REASONS. BY NON - SUPPLY OF REASONS, THE ASSESSEE LOST THE OPPORTUNITY OF FILING THE OBJECTIONS, THUS ARGUED THAT THE ASSESS MENT MADE U/S 148 IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE, HENCE REQUESTED TO CANCEL THE ASSESSMENT. 6.1. THE LD.AR RELIED ON THE FOLLOWING DECISIONS : (A) HONBLE DELHI HIGH COURT IN THE CASE OF SABH INFRASTRUCTURE LTD. VS. ASST. COMMISSIONER OF IN COME TAX (2017) [398 ITR 0198 (DELHI)] 6 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA (B) HONBLE BOMBAY HIGH COURT IN THE CASE OF (I) CIT VS. TREND ELECTRONICS (2015) [379 ITR 0456 (BOM)] (II) CIT VS. IDBI LTD. (2016) 97 CCH 0021 MUM HC (III) CIT VS.VSNL (2012) 340 ITR 0066 7. ON THE OTHER HAND, THE LD.DR VEHEMENTLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND PLACED A COPY OF THE ORDER SHEET ENTRY DATED 22.02.2016, WHEREIN, IT WAS RECORDED THAT THE REASONS FOR REOPENING OF THE CASE U/S 148 WAS COMMUNICATED TO THE LD.AR AND ARGUED THAT THE REASONS WERE COMMUNICATED TO THE ASSESSEE THROUGH AR AND COMPLIED WITH THE STATUTORY REQUIREMENTS, HENCE THE ASSESSMENT MADE U/S 143(3) R.W.S. 147 IS VALID AND REQUIRED TO BE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATER IAL PLACED ON RECORD. IN THIS CASE, THE AO ISSUED NOTICE U/S 148 ON 27.02.2015 AND THE ASSESSEE FILED THE RETURN OF INCOME ON 19.03.2015. THEREAFTER THE ASSESSEE HAS ISSUED A LETTER REQUESTING FOR SUPPLY OF REASONS VIDE LETTER DATED 21.01.2016. THE LD.AR S ARGUMENT IS THAT THE AO DID NOT SUPPLY THE REASONS FOR REOPENING OF ASSESSMENT, HENCE THE ASSESSMENT MADE U/S 143(3) R.W.S. 147 IS INVALID. AS PER THE DECISION OF HONBLE SUPREME COURT, ON RECEIPT OF THE NOTICE U/S 148, THE ASSESSEE REQUIRED TO FILE THE RETURN OF 7 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA INCOME AND THEREAFTER THE ASSESSEE IS PERMITTED TO ASK FOR THE REASONS RECORDED FOR ISSUE OF NOTICE U/S 148 OF THE ACT. ONCE, THE AO RECEIVES REQUEST FROM THE ASSESSEE FOR SUPPLY OF REASONS, THE AO IS BOUND TO SUPPLY THE REASONS RECORDED FOR RE OPENING THE ASSESSMENT. IN THIS CASE, THE AO HAS NOT SUPPLIED THE COPY OF THE REASONS RECORDED FOR ISSUING NOTICE U/S 148, HOWEVER, DURING THE HEARING, THE REASONS RECORDED FOR ISSUE OF NOTICE U/S 148 WERE STATED TO BE COMMUNICATED TO THE AR WHO HAS NOTED THE REASONS, THEREFORE, THE AO IS UNDER THE IMPRESSION THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. (2003) [259 ITR 19) I S PROP ER LY COMPLIED WITH. IN SUPPORT THE LD.DR P L ACED ORDER SHEET COPY BEFORE US. WE HA VE GONE THROUGH THE ORDER SHEET COPY AND OBSERVED THAT IT IS NOT SIGNED BY THE AUTHORITY WHO HAS RECORDED THE ORDER SHEET. IT ALSO DOES NOT BEAR PAGE NUMBER OF ENTRY DATED 22.02.2016. S URPRISINGLY THE SAME LD. AR WHO STATED TO HAVE NOTED THE REASONS FOR REOPENING HAS WRITTEN A LETTER TO THE AO ON 06 . 10 . 2016 STATING THAT NO SUCH COPIES OF REASONS RECORDED WERE SUPPLIED TO HIM. THE ORDER SHEET IS A DOCUMENT OF DAY TO DAY PROCEEDINGS RECORDED BY THE ASSESSING OFFICER UNDER HIS SIGNATURE. T HE PARTIES WHO ARE PRESENT AT THE TIME OF HEARING I.E. AR OF THE ASSESSEE AS WELL AS THE OFFICER CONDUCTING THE HEARING AND RECORDING THE ORDER SHEET SIGN THE ORDER SHEET AFTER RECORDING THE PROCEEDINGS. IN THE 8 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA INSTANT CASE, THERE IS NO SIGNATURE OF THE OFFICER RECORDING THE ORDER SHEET AND HENCE IN THE ABSENCE OF SIGNATURE OF OFFICER RECORDING THE ORDER SHEET THE SAME CANNOT BE TAKEN AT FACE VALUE AND BE TREATED AS VALID EVIDENCE FOR COMMUNICATION OF REASONS UNLESS SUPPORTED BY ANY OTHER EVIDENCE. IN THE INSTANT CASE THE SAME AR WHO SUPPOSED TO HAVE NOTED THE REASONS DENIED HAVING SUPPLIED THE COPIES OF REASONS RECORDED VIDE HIS LETTER DATED 06 . 10 . 2016. AS PER THE DECIDED CASE LAWS, THE REASONS RECORDED REQUIRED TO BE FURNISHED TO T HE ASSESSEE AND IT IS NOT SUFFICIENT MERELY MADE KNOWN TO THE ASSESSEE. COMMUNICATION OF REASONS IS NOT A MERE FORMALITY OR ARRANGEMENT OR UNDERSTANDING BETWEEN THE LD.AR AND THE AO, BUT IT IS A LEGAL REQUIREMENT, WHERE THE REASONS RECORDED MUST BE COMMUNI CATED TO THE ASSESSEE AND THEN ONLY THE ASSESSEE WOULD COME TO KNOW THE REASONS RECORDED AND FURNISH OBJECTIONS IF ANY FOR REOPENING OF THE ASSESSMENT. AS PER THE DECISION OF HONBLE APEX COURT, COPY OF REASONS MUST BE SUPPLIED TO THE ASSESSEE AND THE A SSESSEE IS ALLOWED TO FILE OBJECTIONS WHICH REQUIRED TO BE DISPOSED OF BY SPEAKING ORDER. IN THE INSTANT CASE, THE REASONS RECORDED WERE NOT REACHED TO THE ASSESSEE, THEREBY THE ASSESSEE WAS DEPRIVED OF OPPORTUNITY FOR FILING THE OBJECTIONS AND THE SAME I S AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THEREFORE, WE HOLD THAT THE REASONS WERE NOT SUPPLIED TO THE ASSESSEE AS REQUIRED BY THE DECISION OF 9 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA HONBLE SUPREME COURT AND CAUSED PREJUDICE TO THE ASSESSEE. IT IS SETTLED ISSUE THAT NON COMMUNICATION OF REA SONS RENDERS THE ASSESSMENT AS INVALID. ON THE SIMILAR FACTS, WHERE THE REASONS WERE NOT RECORDED, THIS TRIBUNAL IN THE CASE OF SRI SARVARAYA SUGARS LTD. (SUPRA) HELD THAT NON COMMUNICATION OF REASONS RENDERS THE ASSESSMENT INVALID. FOR THE SAKE OF CLARI TY AND CONVENIENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THIS TRIBUNAL IN PARA NO.8 TO 10 WHICH READS AS UNDER : 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE ASSESSEE HAS FILED REPLY TO THE NOTICE U/S 148 AND REQ UESTED THE AO TO TREAT THE RETURN FILED ON VARIOUS DATES AS MENTIONED IN THE TABLE IN PARA 2 AS RETURNS IN RESPONSE TO THE NOTICE U/S 148 OF THE I.T.ACT AND ALSO REQUESTED TO FURNISH THE REASONS RECORDED FOR ISSUE OF NOTICE U/S 148. THE AO COMPLETED THE ASSESSMENT WITHOUT COMMUNICATING THE REASONS RECORDED. ON APPEAL THE LD.CIT(A) DISMISSED THE ASSESSEES APPEAL ON THE VALIDITY OF THE ASSESSMENT FOR NON COMMUNICATION OF THE REASONS STATING THAT THE ASSESSEE HAD RESPONDED TO THE NOTICE AND PARTICIPATED IN THE ASSESSMENT PROCEEDINGS. 9. THE AO HAS COMPLETED THE ASSESSMENT WITHOUT COMMUNICATING THE REASONS RECORDED FOR ISSUE OF NOTICE U/S 148, IN SPITE OF THE SPECIFIC REQUEST MADE BY THE ASSESSEE FOR FURNISHING THE REASONS. AS PER THE JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF M/S GKN DRIVE SHAFTS (INDIA) LTD. VS. ITO, IT IS OBLIGATORY ON THE PART OF AO TO COMMUNICATE THE REASONS ON FURNISHING THE RETURN OF INCOME. THE ASSESSEE IN RESPONSE TO THE NOTICE ISSUED U/S 148 SUBMITTED A LETTER TO THE AO TO TREAT THE RETURNS FILED EARLIER AS RETURNS IN RESPONSE TO THE NOTICE ISSUED U/S 148. THUS THE ASSESSEE HAS COMPLIED WITH THE MANDATE OF HONBLE SUPREME COURT JUDGEMENT CITED SUPRA BUT THE AO FAILED TO COMMUNICATE THE REASONS. THE ASSESSEE RELIED ON THE D ECISION OF HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF BERGER PAINTS INDIA LTD. VS. ACIT (SUPRA), WHEREIN HONBLE HIGH COURT HELD THAT THE ASSUMPTION OF JURISDICTION OF ASSESSING OFFICER U/S 147 DEPENDS UPON EXISTENCE OF REASONS FOLLOWED BY COMMUNICATION THEREOF TO THE ASSESSEE. IF THE NOTICE SERVED UNDER SECTION 148 IS CHALLENGED, THE AO CANNOT PROCEED WITH THE ASSESSMENT UNDER SECTION 147 UNLESS REASONS ARE COMMUNICATED. IN THE INSTANT CASE, THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE HAS COMP LIED WITH THE NOTICE U/S 148 AND THE AO HAS NOT FURNISHED THE REASONS RECORDED FOR ISSUANCE OF NOTICE U/S 148 DESPITE 10 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA THE REQUEST MADE BY THE ASSESSEE. THE REVENUE COULD NOT PLACE ANY EVIDENCE TO CONTROVERT THE ARGUMENT OF THE LD.AR THAT THE REASONS WERE N OT COMMUNICATED. THUS THE ASSESSEES CASE IS SQUARELY COVERED BY THE DECISIONS IN THE CASE OF BERGER PAINTS INDIA LTD. VS. ACIT (SUPRA) AND CIT VS. TREND ELECTRONICS (SUPRA). 9.1. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. TREND ELECTRONICS (SU PRA) FOLLOWING THE DECISION OF CIT VS. VIDESH SANCHAR NIGAM LTD AND APPLYING THE DECISION OF APEX COURT IN THE CASE OF GKN DRIVE SHAFTS (INDIA) LTD. VS. ITO HELD AS UNDER : 8. WE FIND THAT THE IMPUGNED ORDER MERELY APPLIES THE DECISION OF THE APEX COURT IN GKN DRIVESHAFTS (INDIA) LTD. (SUPRA). FURTHER IT ALSO FOLLOWS THE DECISION OF THIS COURT IN VIDESH SANCHAR NIGAM LTD. (SUPRA) IN HOLDING THAT AN ORDER PASSED IN REASSESSMENT PROCEEDINGS ARE BAD IN LAW IN THE ABSENCE OF REASONS RECORDED FOR ISSUING A RE OPENING 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 STR ICTLY COMPLY WITH THE PREREQUISITE CONDITIONS VIZ. REOPENING OF REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WHICH WOULD WARRANT THE REOPENING OF AN ASSESSMENT. 9.2. IN THE INSTANT CASE, THE AO HAD ISSUED NOTICE U/S 148 AND THE ASSESSEE HAS COMPLIED WITH THE NOTICE AND REQUESTED FOR REASONS. THE AO COMPLETED THE ASSESSMENT WITHOUT COMMUNICATING THE REASONS. THEREFORE, THE FACTS OF THE CASE ARE SIMILAR TO THAT OF THE DECISION OF HONBLE BOMBAY HIGH COURT RELIED UPON BY THE L D.AR CITED SUPRA. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT, WE HOLD THAT THE ASSESSMENT MADE U/S 147 R.W.S. 143(3) WITHOUT COMMUNICATING THE REASONS IS BAD IN LAW. ACCORDINGLY, THE ORDERS FRAMED U/S 147 R.W.S. 143(3) ARE QUASHED A ND THE APPEAL OF THE ASSESSEE IS ALLOWED. SINCE, WE HAVE QUASHED THE ASSESSMENT MADE U/S 143(3), WE CONSIDER IT IS NOT NECESSARY TO ADJUDICATE THE GROUNDS ON MERITS. 8.1. THE LD.AR RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SABH IN FRASTRUCTURE LTD. VS. ASST. COMMISSIONER OF INCOME TAX (2017) [398 ITR 0198 (DELHI)], WHEREIN, THE HONBLE HIGH COURT GIVEN THE GUIDELINES IN THE MATTERS REGARDING REOPENING OF ASSESSMENT. FOR READY REFERENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THE HONBLE DELHI HIGH 11 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA COURT IN THE CASE OF SABH INFRASTRUCTURE LTD. VS. ASST.COMMISSIONER OF INCOME TAX (SUPRA) IN PARA NO.19 WHICH READS AS UNDER : 19. BEFORE PARTING WITH THE CASE, THE COURT WOULD LIKE TO OBSERVE THAT ON A ROUTINE BASIS, A LARGE NUMBER OF WRIT PETITIONS ARE FILED CHALLENGING THE REOPENING OF ASSESSMENTS BY THE REVENUE UNDER SECTIONS 147 AND 148 OF THE ACT AND DESPITE NUMEROUS JUDGMENTS ON THIS ISSUE, THE SAME ERRORS ARE REPEATED BY THE CONCERNED REVENUE AUTHORITIES. IN THIS BACKGROUND, THE COURT WOULD LIKE THE REVENUE TO ADHERE TO THE FOLLOWING GUIDELINES IN MATTERS OF REOPENING OF ASSESSMENTS: (1) WHILE COMMUNICATING THE REASONS FOR REOPENING THE ASSESSMENT, THE COPY OF THE STANDARD FORM USED BY THE .AO FOR OBTAINING THE APPROVAL OF THE SUP ERIOR OFFICER SHOULD ITSELF BE PROVIDED TO THE ASSESSEE. THIS WOULD CONTAIN THE COMMENT OR ENDORSEMENT OF THE SUPERIOR OFFICER WITH HIS NAME, DESIGNATION AND DATE. IN OTHER WORDS, MERELY STALING THE REASONS IN A LETTER ADDRESSED BY THE AO TO THE ASSESS EE I S TO BE AVOIDED; 8.2. THE LD.AR ALSO RELIED ON THE DECISION OF CIT VS. TREND ELECTRONICS (2015) [379 ITR 0456 (BOM)] WHICH WAS DISCUSSED IN SARVARAYA SUGARS (SUPRA). 8.3. IN ADDITION TO THE ABOVE, THE LD.AR PLACED RELIANCE ON THE OBSERVATIONS AND DECISIONS OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. IDBI LTD. (2016) 97 CCH 0021 MUM HC VIDE PARA NO.4 AND 5 OF THE ORDER WHICH READS AS UNDER : (IV) MR. MALHOTRA, COUNSEL FOR THE REVENUE, SUBMITS THAT THE RESPONDENT ASSESSEE WAS AWARE OF THE RE ASONS FOR THE REASSESSMENTS. THUS, THERE WAS NO VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. IN THE ABOVE VIEW, IT IS SUBMITTED THAT THE QUESTION AS FRAMED BE ADMITTED FOR CONSIDERATION. (V) WE FIND THAT THE QUEST I ON AS FRAMED PROCEEDS ON THE BASIS THAT THE RESPONDENT ASSESSEE WAS AWARE OF THE REASONS FOR REASSESSMENT. THE ONLY BASIS FOR THE AFORESAID SUBMISSION IS THE SUBMISSION MADE BY THE REVENUE BEFORE THE TRIBUNAL THAT THE RESPONDENT ASSESSEE IS A PUBLIC SECTOR INSTITUTION WHO WAS AWARE THAT SEARCH ACTI ON HAS BEEN INIT I ATED ON CERTAIN LESSEES IN RESPECT OF TRANSACTIONS WITH 12 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA IDI I.E. RESPONDENT ASSESSEE. ON THE BASIS OF THE ABOVE, IT IS TO BE INFERRED THAT THE REASON FOR REASSESSMENT WAS KNOWN TO THE RESPONDENT ASSESSEE. THE SUPPLY OF REASON IN SUPPORT OF THE NOTICE FOR REOPENING OF AN ASSESSMENT IS A JURISDICTIONAL REQUIREMENT. THE REASONS RECORDED FORM THE BASIS TO EXAMINE WHETHER THE ASSESSING OFFICER HAD AT ALL APPLIED HIS MIND TO THE FACTS AND HAD REASONS TO BELIEVE THAT TAXABLE INCOME HAS ESCAPED RE ASSESSMENT. IT IS THESE REASONS, WHICH HAVE TO BE MADE AVAILABLE TO THE ASSESSEE AND IT COULD GIVE RISE TO A CHALLENGE TO THE REOPENING NOTICE. IT IS UNDISPUTED FACT THAT THE REASONS RECORDED FOR ISSUING REOPENING NOTICE WHERE NEVER COMMUNICATED TO THE R ESPONDENT ASSESSEE IN SPITE OF ITS REPEATED REQUESTS. THUS, THE GRIEVANCE OF THE REVENUE ON THE ABOVE COUNT IS UNSUSTAINABLE. 8.4. LD.AR ALSO RELIED ON THE DECISION OF CIT VS.VSNL (2012) 340 ITR 0066, WHEREIN, THE HONBLE BOMBAY HIGH COURT HELD THAT NON FURNISHING OF REASONS TO THE ASSESSEE RENDERS THE ASSESSMENT INVALID. 8.5. IN THE INSTANT CASE, THOUGH THE LD.DR ARGUED THAT THE ASSESSEE IS MADE KNOWN THE REASONS RECORDED BY AN ORDER SHEET ENTRY, THE ORDER SHEET IS DEFECTIVE IN AS MUCH AS IT DOES NOT BEAR THE SIGNATURE OF THE AO AND THE REASONS RECORDED WERE NOT SEPARATELY COMM UNICATED IN WRITING TO THE ASSESSEE. IN THE ABSENCE OF SIGNATURE OF THE AO, THE ORDER SHEET ENTRY DATED 22.02.2016 IS UNAUTHENTICATED AND CANNOT BE GIVEN MUCH WEIGHTAGE. AS PER THE DECISIONS CITED SUPRA, IT IS HELD BY THE HONBLE HIGH COURTS THAT THE REAS ONS REQUIRED TO BE COMMUNICATED TO THE ASSESSEE PROPERLY. THE DEPARTMENT COULD NOT PLACE ANY EVIDENCE OR ANY OTHER DECISION OF THE HIGHER COURT OR TRIBUNAL TO CONTROVERT THE SUBMISSIONS MADE BY THE LD.AR AND THE DECISIONS RELIED UPON BY THE LD.AR. THE DE PARTMENT COULD NOT PLACE ANY EVIDENCE TO ESTABLISH THAT THE REASONS WERE COMMUNICATED TO THE 13 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA ASSESSEE AND NO OTHER DECISION WAS BROUGHT BEFORE US TO CONTROVERT THE SUBMISSIONS OF THE LD.AR. THEREFORE, WE HOLD THAT THE AO HAS NOT COMMUNICATED THE REASONS FOR REOPENING OF ASSESSMENT AND THE CASE LAWS RELIED UP ON BY THE LD.AR ARE SQUARELY APPLICABLE TO ASSESSEES CASE . ACCORDINGLY, WE HOLD THAT THE ASSESSMENTS MADE U/S 147 R.W.S. 143(3) ARE I NVALID AND WE SET ASIDE THE ORDERS OF THE LD.CIT(A) AND QUASH THE ASSESSMENT ORDERS. 9. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER , 2018 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 21. 1 2 .2018 L.RAMA, SPS 14 I.T.A. NO S . 113 - 116 /VIZ/201 8 ALAPATI KASI SUBRAYAN, DUVVA / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE ALAPATI KASI SUBRAYAN , D.NO.2 - 51/2, NEAR CANAL ROAD, DUVVA 2 . / THE REVENUE INCOME TAX OFFICER, WARD - 1, TANUKU 3. THE PR. COMMISSIONER OF INCOME TAX, RAJAHMUNDRY 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 12, HYDERABAD 4 . , , / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM