M/S INDUSTRIAL DEVELOPMENT BANK OF INDIA, Mumbai V. THE DCIT RG 3(1), Mumbai

ITA 1391/MUM/2004

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9287 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 05-12-2012
• Assessment Year: 1993-1994
• Appeal Filed On: 05-03-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH VYAS; R SWAMINATHAN
• Assessee Lawyers: RUPINDER BRAR
• Keywords: Reopening of assessment; Depreciation; Principle of natural justice; Question of law; Reassessment proceedings
• Section: 32; 147; 148; 132; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO. 1391/M/2004 ASSESSMENT YEAR:1993-1994 INDUSTRIAL DEVELOPMENT BANK OF INDIA, TAXATION CELL, 3 RD FLOOR, IDBI TOWER, WTC COMPLEX, CUFFE PARADE, MUMBAI 400 005. PAN: AAAC11105 R VS. THE DEPUTY COMMISSIONER OF INCOME TAX, RANGE 3(1), 6 TH FLOOR, ROOM NO. 623, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. (APPELLANT) (RESPONDENT) I.T.A. NO. 1394/M/2004 ASSESSMENT YEAR:1993-1994 THE DEPUTY COMMISSIONER OF INCOME TAX, RANGE 3(1), 6 TH FLOOR, ROOM NO. 623, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. VS. INDUSTRIAL DEVELOPMENT BANK OF INDIA, TAXATION CELL, 3 RD FLOOR, IDBI TOWER, WTC COMPLEX, CUFFE PARADE, MUMBAI 400 005. PAN: AAAC11105 R (APPELLANT) (RESPONDENT) ASSESSEE BY : M/S. RUPINDER BRAR, CIT-DR REVENUE BY : SHRI DINESH VYAS & R. SWAMINATHAN DATE OF HEARING: 5.12.2012 DATE OF ORDER : 12.12.2012 O R D E R PER D. KARUNAKARA RAO, AM: THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE A ND THE REVENUE ARE AGAINST THE ORDER OF THE CIT(A)-XII, MUMBAI DATED 19. 12.2003 FOR THE ASSESSMENT YEAR 1993-1994. 2. BRIEFLY STATED THE RELEVANT FACTS OF THE CASE AR E THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE INCOME OF RS. 248.49 CR (ROUNDED OFF TO NEAREST LAKHS) AND THE SAME WAS SUBSEQUENTLY REVISED AND TH E TOTAL INCOME AS PER THE REVISED INCOME IS 259.71 CR. SCRUTINY ASSESSMENT W AS COMPLETED DETERMINING THE TAXABLE INCOME OF RS. 267.28 CR. VIDE THE ASSESSMEN T ORDER DATED 26.3.1996. THE 2 ASSESSEE IS A PUBLIC SECTOR FINANCIAL INSTITUTION ( PSFI) ENGAGED IN PROVIDING LONG TERM FINANCE TO INDUSTRIES FOR EXPANSION AND DIVERSIFICA TION. DURING THE YEAR, THE ASSESSEE ALSO ENGAGED IN THE BUSINESS OF LEASING OUT EQUIPME NTS AND ASSETS WITH AS MANY AS 25 PARTIES AND GUJARAT ELECTRICITY BOARD IS ONE OF SUCH PARTIES. THERE WAS A SEARCH ACTION U/S 132 OF THE ACT AND SURVEY ACTION U/S 133 (A) OF THE ACT IN ONE OF THE MAJOR LESSEES NAMELY M/S. WESTERN PACQUE INDIA LIMITED (W PIL) AND NOTICED VARIOUS IRREGULARITIES AND SUCH IRREGULARITY RELATES TO THE CLAIM OF DEPRECIATION ON THE LEASED ASSETS. THUS, THE AO INITIATED PROCEEDINGS U/S 147 R.W.S. 148 OF THE ACT AND ISSUED NOTICE U/S 148 DT 9.12.1996. THE REASSESSMENT WAS C OMPLETED DETERMINING THE TOTAL INCOME AT RS.272,48,51,396/-. AGGRIEVED WITH SUCH O RDER OF THE AO, ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) AND RAISED VARIOUS GRO UNDS. GROUND RELATING TO VALIDITY OF THE REASSESSMENT IS ONE OF THEM. THE SAID ISSUE WAS DISCUSSED IN PARA 2.3 OF THE IMPUGNED ORDER. IN THE REASSESSMENT PROCEEDINGS, TH E ASSESSEE MADE REPEATED REQUESTS TO THE AO ASKING FOR SUPPLY OF COPY OF TH E REASONS RECORDED BY THE AO BEFORE ISSUE OF NOTICE U/S 148 OF THE ACT. IN THIS REGARD, CIT (A) MADE REFERENCE IN HIS ORDER TO SAID REPEATED REQUESTS BUT HE DID NO T ADDRESS TO THIS PARTICULAR LINE OF ARGUMENT. CIT(A) DID NOT MENTION THE CONSEQUENCES O F NON SUPPLY OF THE REASONS. FINALLY, HE DISMISSED THE ASSESSEES OBJECTIONS REL ATING TO THE VALIDITY OF THE REASSESSMENT ON SOME OTHER GROUNDS. THUS, THE APPEA L OF THE ASSESSEE WAS PARTLY ALLOWED BY THE CIT(A). AGGRIEVED WITH THE ORDER O F THE CIT (A), BOTH THE ASSESSEE AS WELL AS THE REVENUE FILED THE PRESENT CROSS APPE ALS BEFORE US. WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE. ITA NO. 1391/M/2004 (AY: 1993-1994) (BY ASSESSEE) 3. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GRO UNDS WHICH READ AS UNDER: 1. THE LD CIT (A) ERRED IN JUSTIFYING THE REOPENING OF THE ASSESSMENT BY THE ASSESSING OFFICER U/S 147 BASED ON THE CONCLUSI ONS DRAWN BY THE AO ON MATTERS WHICH WERE NOT PUT FORTH BEFORE THE APPELLA NT. ALL THE FACTS RELEVANT FOR ASSESSMENT WERE FULLY AND TRULY DISCLOSED BY TH E APPELLANT BEFORE AO AT TIME OF ORIGINAL ASSESSMENT AND THE REOPENING OF TH E ASSESSMENT WAS NOT IN ACCORDANCE WITH THE LAW. THE HONBLE TRIBUNAL MAY HOLD REOPENING OF THE ASSESSMENT WAS BAD ON FACTS AND IN LAW. 3 2. THE LD CIT (A) ERRED IN CONFIRMING THE DISALLOWA NCE OF DEPRECIATION AMOUNTING TO RS. 18,75,09,465/-, CLAIMED BY THE APP ELLANT UNDER SECTION 32 OF THE ACT, IN RESPECT OF ASSETS GIVEN ON LEASE BY THE APPELLANT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1993- 94 AND HOLDING THEM AS PURE FINANCE TRANSACTIONS. THE HONBLE TRIBUNAL MA Y HOLD THAT THE APPELLANT IS ENTITLED TO DEPRECIATION IN RESPECT OF ASSETS GI VEN ON LEASE BY THE APPELLANT, AS CLAIMED U/S 32 OF THE ACT. 4. GROUND NO.1 RELATES TO VALIDITY OF THE REASSESSM ENT. SHRI DINESH VYAS, LD COUNSEL FOR THE ASSESSEE NARRATED THE ABOVE GIVEN F ACTS OF THE CASE AND BROUGHT OUR ATTENTION TO PAGE ONE OF THE PAPER BOOK AND READ OU T THE CHRONOLOGY OF MAJOR EVENTS AND MENTIONED THAT THE REASSESSMENT PROCEEDI NGS WERE INITIATED ON 9.12.1996 BEYOND FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR 1993-1994. FURTHER, REFERRING TO PAGE 3 OF THE PAPER BOOK IE ASSESSEES LETTER DATED 10.1. 1997, LD COUNSEL READ OUT THE ASSESSEES REQUEST, ASKING THE AO TO SUPPLY HIM A COPY OF THE REASONS RECORDED BY THE AO FOR REOPENING THE AS SESSMENT OF IDBI FOR THE ASSESSMENT YEAR 1993-94. FURTHER, BRINGING OUR ATT ENTION TO PAGE 4 OF THE PAPER BOOK IE ASSESSEES LETTER DATED 30.09.1998, THE LD COUNSEL READ OUT STATING THE REPEATED REQUESTS OF THE ASSESSEE FOR WANT OF COPY OF THE REASONS RECORDED BY THE AO. LD COUNSEL READ OUT FROM PAGE 5 OF THE PAPER BOOK IE ASSESSEES LETTER DATED 17.11.1998 ONCE AGAIN REQUESTING THE REVENUE FOR TH E SUPPLY OF THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. THUS, LD COUNSEL MADE HIS POINT VERY CLEARLY THAT THERE WERE REPEATED REQUESTS OF THE ASSESSEE TO THE AO FOR SUPPLYING A COPY OF THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT BY THE AO BEFORE ASSUMING THE JURISDICTION U/S 147 R.W.S. 148 OF THE ACT. FURTHER, LD COUNSEL MENTIONED THAT IT IS AN UNDISPUTED FACT THAT THE AS SESSING OFFICER DID NOT SUPPLY THE SAME TO THE ASSESSEE. IT IS A FACT THAT THE AO HAS NOT SUPPLIED THE SAME TO THE ASSESSEE EVEN BEFORE THE COMPLETION OF REASSESSMENT AND NOT EVEN BEFORE FIRST AND SECOND APPELLATE AUTHORITIES NAMELY CIT(A)/TRIBUNAL . 5. FURTHER, ON THE ISSUE OF RELATED LEGAL SUMMARY, LD COUNSEL MENTIONED THAT THE AO IS UNDER OBLIGATION TO SUPPLY THE COPY OF TH E REASONS TO THE ASSESSEE WHEN DEMANDED AND THE CONSEQUENCES OF THE FAILURE TO SUP PLY THE SAME ARE FATAL TO THE REASSESSMENT PROCEEDINGS. SRI VYAS RELIED ON VARIO US JUDGMENTS ON THIS ISSUE. TO 4 START WITH, LD COUNSEL RELIED ON THE JUDGMENT OF TH E HONBLE SUPREME COURT IN THE CASE OF G.K.N. DRIVESHAFTS (INDIA) LTD. VS. ITO [20 03] 259 ITR 19 FOR THE PROPOSITION THAT WHEN A NOTICE U/S 148 IS ISSUED, ON DEMAND, AO NEEDS TO SUPPLY THE COPY OF THE REASONS RECORDED AND AO IS BOUND TO FURNISH THE SAME WITHIN A REASONABLE TIME. ON RECEIPT OF THE REASONS, ASSESSEE IS ENTIT LED TO FILE THE OBJECTIONS AND THE AO IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPE AKING ORDER. REFERRING TO THE CONSEQUENCES OF FAILURE TO SUPPLY THE SAID REASONS, LD COUNSEL BROUGHT OUR ATTENTION TO THE DECISION OF HONBLE JURISDICTIONAL HIGH COUR T IN THE CASE OF CIT VS. FOMENTO RESORTS AND HOTELS LTD. IN IT APPEAL NO. 71 OF 2006 , DATED 27.11.2006 AND MENTIONED THAT GIVING OF REASONS GOT TO BE CONSIDER ED AS IMPLICIT IN SECTION 11 OF THE EXPENDITURE TAX ACT, 1987. FAILURE TO GIVE THE REA SONS RESULTS IN CANCELLING OF THE REASSESSMENT AND SUCH REASSESSMENT ORDER IS BAD IN LAW . LD COUNSEL READ OUT RELEVANT PARTS ALSO FROM THE RELEVANT ORDER OF THE TRIBUNAL VIDE ETA NO. 1 & 5/PN/2001, DATED 4.4.2006. SPECIAL LEAVE PETITION ( SLP) FILED AGAINST THE ORDER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . FOMENTO RESORTS AND HOTELS LTD (SUPRA) WAS DISMISSED BY THE HONBLE SUPREME COURT VIDE ORDER DATED 16.7.2007. FURTHER, REFERRING TO THE JURISDICTIONA L HIGH COURT JUDGMENT IN THE CASE OF CIT VS. VIDESH SANCHAR NIGAM LTD (340 ITR 66) (BOM), LD SR COUNSEL MENTIONED THAT WHEN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WERE NOT FURNISHED TO THE ASSESSEE AFTER THE COMPLETION OF THE ASSESSM ENT, THE REASSESSMENT ORDER COULD NOT BE UPHELD . FOR THE SIMILAR PROPOSITION, LD COUNSEL RELIED O N OTHER DECISION OF ITAT, HYDERABAD BENCH IN THE CASE OF S. PRASAD RAJU VS. DCIT [2005] 96 TTJ (HYD) 832, CALCUTTA BENCH DECISION IN THE CASE OF PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD VS. ACIT [2005] 96 TTJ (CAL) 834; MUMBAI BENCH DECI SION IN THE CASE M/S MAFATLAL FABRICS PVT. LTD VS. ITO VIDE ITA NO.341/M/2004 DATED 29.5.2006. FURTHER, LD COUNSEL RELIED ON THE THIRD MEMBER DECI SION IN THE CASE OF M/S. TELCO DADAJEE DHACKJEE LTD VS. DCIT, ITA NO.4613/MUM/2005, WHERE THE THIRD ME MBER HAS GIVEN FINDING IN PARA 6 AND MENTIONED THAT WHEN THE AO FAILED TO FURNISH THE COPY OF THE REASONS RECORDED FOR REOPENING OF THE A SSESSMENT DESPITE THE SPECIFIC REQUEST, THE REASSESSMENT ORDER IS LIABLE TO BE QUASHED AS NULL AND VOID . LD COUNSEL ALSO MENTIONED THAT THIS ASPECT OF QUASHING OF SUCH ORDER IS IN EXISTENCE 5 SINCE 1983, WHERE THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SIESTA STEEL CONSTRUCTION P. LTD. VS. SHIKARE (K.K) [1985] 154 ITR 547 HAS HELD THAT ASSESSING OFFICER IS BOUND TO FURNISH THE REASONS RECORDED FO R REOPENING THE ASSESSMENT. BY ALL THE ABOVE SUMMARY OF DECISIONS, LD COUNSEL MADE OUT HIS POINT BY STATING THAT THE ASSESSEE MADE VARIOUS REQUESTS FOR WANT OF A CO PY OF REASONS RECORDED BY THE AO BEFORE ASSUMING THE JURISDICTION U/S 147 R.W.S. 148 OF THE ACT AND THE AO IS UNDER OBLIGATION TO FURNISH THE SAME AND WHEN SUCH OBLIGATION HAS NOT DISCHARGED, THE ASSESSMENT MADE CONSEQUENT TO THE NOTICE U/S 14 8 BECOMES NULL AND VOID. THEREFORE, THE NOTICE ISSUED BY THE AO TO THE ASSES SEE ON 9.12.1996 AND ASSESSMENT MADE BY THE AO ON 26.3.1999 SHOULD BE DE CLARED NULL AND VOID . 6. PER CONTRA, MS. RUPINDER BRAR, LD CIT-DR MENTION ED THAT THE ASSESSEE IS AWARE OF THE REASONS FOR WHICH THE REASSESSMENT NOT ICE WAS ISSUED AND DULY SERVED THE SEARCH ACTION ON CERTAIN LESSEE ON THE TRANSACT ION INVOLVED IDBI, A PUBLIC SECTOR FINANCIAL INSTITUTION HAS ALERTED AND BROUGHT FORTH RELEVANT REASONS FOR REASSESSMENT. WHEN THE ASSESSEE IS AWARE OF THE SAID REASONS, THE RE IS NO VIOLATION TO THE PRINCIPLES OF NATURAL JUSTICE. IN FACT, THE AO HAS C OMPLIED WITH ALL THE PRINCIPLES OF NATURAL JUSTICE WHILE MAKING THE ADDITIONS AND THER EFORE, MERE FAILURE SUPPLY OF THE COPY OF THE REASONS RECORDED BY THE AO MUST NOT LEA D TO QUASHING OF THE REASSESSMENT ORDER. IN THIS REGARD, LD DR RELIED ON CERTAIN DECISIONS IE (I) MKR FROZEN FOOD EXPORTS LTD. VS. ITO [2010] 126 ITD 1 ( DEL); (II) CIT VS. NATIONAL TYRES & RUBBER CO. OF INDIA LTD. [2011] 202 TAXMAN 625 (KE R.) AND (III) SOCIEDADE DE FORMENTO INDUSTRIAL (P) LTD. VS. ACIT [2010] 235 CT R 322 (BOM.). 7. WE HAVE HEARD BOTH THE PARTIES ON THE PRELIMINAR Y ISSUE OF NON SUPPLY OF REASONS RECORDED U/S 148 OF THE ACT TO THE ASSESSEE IN RESPONSE TO REPEATED REQUESTS OF THE ASSESSEE AND THE CONSEQUENCE OF SUC H FAILURE OF THE AO. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE MADE REPEATED REQ UESTS FOR POSSESSING THE REASONS RECORDED BY THE AO AND IT IS ALSO UNDISPUTE D FACT THAT THE AO HAS NOT SUPPLIED THE SAID COPY OF THE DOCUMENTS CONTAINING THE REASONS RECORDED BY THE AO BEFORE ISSUE OF THE NOTICE U/S 148 OF ACT. IN THIS R EGARD, WE HAVE PERUSED THE CITED PAPERS OF THE PAPER BOOKS OF THE ASSESSEE AND THERE IS NO DISPUTE ON THESE ISSUES. 6 THEREFORE, THE ONLY ISSUE THAT IS RELEVANT FOR ADJU DICATION RELATES TO THE CONSEQUENCES OF THE FAILURE TO SUPPLY THE RELEVANT DOCUMENTS CONTAINING THE SAID REASONS RECORDED. IN THIS REGARD, WE HAVE PERUSED T HE RELATED JUDGMENTS AND THEIR SUMMARY/CONCLUSIONS AND THEY ARE EXTRACTED HERE FOR THE SAKE OF COMPLETENESS OF THIS ORDER. 1. IN THE CASE OF M/S. TELCO DADAJI DHACKJEE LTD VS. DCIT- ITA NO.4613/MUM/2005(TM), TRIBUNAL ADDRESSED TO THE QUE STION IE THE ORDER OF THE AO IS LIABLE TO BE QUASHED OR TO BE SE T ASIDE WHERE COPY OF THE REASONS RECORDED FOR TAKING ACTION U/S 147 WERE NOT PROVIDED TO THE ASSESSEE IN SPITE OF SPECIFIC REQUESTS? AND THE THIRD MEMBER GAVE HIS FINDING ON THE ABOVE QUESTION AND THE ANSWER IS AS UNDER: -FOR THE ABOVE POINT OF DIFFERENCE, THE TRIBUNAL H ELD THAT IN THE LIGHT OF THE BINDING JUDGMENT OF THE PANAJI BENCH OF THE HONBLE BOMBAY HIGH COURT (SUPRA) AND THE ORDER OF THE TRIBUNAL IN THE CASE OF VIDESH SANCHAR NIGAM LTD. (SUPRA) AND RESPECTFULLY FOLLOWI NG THE SAME, I HOLD THAT SINCE THE ASSESSING OFFICER DID NOT FURNISH TH E REASONS RECORDED FOR REOPENING THE ASSESSMENT TO THE ASSESSEE DESPITE SP ECIFIC REQUEST, THE REASSESSMENT ORDER IS LIABLE TO BE QUASHED AS NULL AND VOID. THE POINT OF DIFFERENCE NO.(II) IS ANSWERED ACCORDINGLY. 2. IN THE CASE OF SIESTA STEEL CONSTRUCTION P. LTD. VS. SHIKERA (K.K.), HONBLE BOMBAY HIGH COURT [1985] 154 ITR 547 HELD TH AT THE REASSESSMENT PROCEEDINGS ARE REQUIRED TO BE QUASHED WHEN THE AO DID NOT CARE TO FURNISH THE REASONS TO THE ASSESSEE AND RELEVANT PARAGRAPHS READ AS UNDER: .SHRI KHARI, LD COUNSEL APPEARING ON BEHALF OF THE PETITIONER, SUBMITTED THAT IN SPITE OF SEVERAL REMINDERS FROM T HE PETITIONER, RESPONDENT NO.1 HAS NOT CARED TO FURNISH THE REASON S, WHICH PROMPTED RESPONDENT NO.1 TO ISSUE NOTICE UNDER SECTION 148 O F THE ACT. ..THE INITIATION OF PROCEEDINGS BY RESPONDENT NO.1, THEREFORE, WAS CLEARLY WITHOUT JURISDICTION AND ARE REQUIRED T O BE QUASHED. 3. SIMILAR VIEW WAS TAKEN BY THE TRIBUNAL IN THE CA SE OF TATA INTERNATIONAL LTD. VS. DCIT VIDE ITA NOS. 3359 TO 33 61/MUM/2009. RELEVANT PARTS OF THE SAID DECISION READ AS FOLLOWS ,- 7 IN THE CASE OF CIT VS. VIDESH SANCHAR NIGAM LTD , THE HONBLE JURISDICTIONAL HIGH COURT HAS CONFIRMED THE ORDER O F THIS TRIBUNAL WHEREBY THE REASSESSMENT WAS HELD AS INVALID BECAUS E THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WERE NOT F URNISHED DESPITE REPEATED REQUESTS AND FURNISHED ONLY AFTER COMPLETI ON OF ASSESSMENT. THE HONBLE HIGH COURT HAS OBSERVED IN PARA TWO AS UNDER: 2. THE FINDING OF THE FACT RECORDED BY THE INCOME T AX APPELLATE TRIBUNAL IS THAT IN THE PRESENT CASE THE REASONS RE CORDED FOR REOPENING OF THE ASSESSMENT THROUGH REPEATEDLY ASKED BY THE A SSESSEE 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., INCOME TAX APPEAL NO.71 OF 20 06 DECIDED ON 27 TH NOVEMBER, 2006 HAS HELD THAT THOUGH THE REOPENING OF THE ASSESSMENT IS WITHIN THREE YEARS FROM THE END OF RE LEVANT ASSESSMENT YEAR, SINCE THE REASONS RECORDED FOR REOPENING OF T HE ASSESSMENT WERE NOT FURNISHED TO THE ASSESSEE TILL THE COMPLETION O F 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 FOMENTO RESORTS & HOTELS LTD HAS BEEN DISMISSED BY THE APEX COURT VIDE ORDER DATED 16 TH JULY, 2007. THUS, THE REASONS ARE REQUIRED TO FURNISH WITHIN A REASONABLE PERIOD OF TIME SO THAT THE ASSESSEE CAN RAISE THE OBJECTIONS AT THE PRELIMINARY STAGE OF PROCEEDINGS. IF THE REASONS ARE SUPPLIED D URING THE ASSESSMENT PROCEEDINGS, THAN FURNISHING THE REASONS SUBSEQUENT TO THE ASSESSMENT PROCEEDINGS WOULD ACHIEVE NO PURP OSE AND TANTAMOUNT TO DEPRIVE AND DENY THE ASSESSEE OF ITS RIGHT TO RAISE THE OBJECTIONS AGAINST THE VALIDITY OF NOTICE ISSUED UN DER SECTION 148. 4. JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. FOMENTO RESORTS AND HOTELS LTD., VIDE IT APPEAL NO.71 OF 20 06 (BOMBAY HIGH COURT), HAS TAKEN A CONSISTENT VIEW THAT THE RESULT ANT REASSESSMENT HAS TO BE QUASHED. .GIVING OF REASONS HAS GOT TO BE CONSIDERED AS I MPLICIT IN SECTION 11 OF THE EXPENDITURE TAX ACT, 1987. IT IS NOW WELL SE TTLED THAT GIVING REASONS IN SUPPORT OF AN ORDER IS PART OF COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. IN THE LIGHT OF THAT, NO FAULT COULD BE FOUND WITH T HE ORDER OF THE LD ITAT AND AS SUCH NO SUBSTANTIAL QUESTION OF LAW ARI SES AS WELL. 5. HONBLE TRIBUNAL OF HYDERABAD BENCH HAS ALSO HELD IN THE CASE OF S. PRASAD RAJU VS. DCIT [2005] 96 TTJ (HYD) 832 THA T,- 8 CONCLUSION: REASONS FOR REOPENING OF ASSESSMENT HA VING BEEN NOT DISCLOSED BY THE DEPARTMENT DESPITE SPECIFIC RE QUEST BY ASSESSEE, REOPENING WAS INVALID . 8. THEREFORE, THE ABOVE SUMMARY OF JUDGMENT OF JURI SDICTIONAL HIGH COURT OF BOMBAY AND THE OTHER DECISIONS OF THE TRIBUNAL ANSW ERS THE QUESTION IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CONSEQUENTLY, THE CONSEQUENCES OF FAILURE TO SUPPLY THE REASONS RECORDED U/S 148 OF THE ACT TO T HE ASSESSEE WHEN ASKED FOR, THE REASSESSMENT IS REQUIRED TO THE QUASHED. CONSIDERIN G THE UNDISPUTED FACTS OF REPEATED REQUESTS FOR SUPPLY OF REASONS BY THE ASSE SSEE AND THE AOS BLANKET FAILURE TO SUPPLY THE REASONS RECORDED U/S 148 OF THE ACT, THE IMPUGNED REASSESSMENT IS BAD IN LAW AND THE SAME IS REQUIRED TO BE QUASHED. ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED . 9. GROUND NO.2 RELATES TO THE DISALLOWANCE OF DEPRE CIATION IN RESPECT OF THE ASSETS GIVEN ON LEASE AMOUNTING TO RS. 18,75,09,465 /- U/S 32 OF THE ACT. IN THIS REGARD, BOTH THE PARTIES CONCURRED IN STATING THAT IN THE LIGHT OF THE ABOVE DECISION OF THE TRIBUNAL ON GROUND 1 IN FAVOUR OF THE ASSESSEE, THE ADJUDICATION ON THIS ISSUE BECOMES AN ACADEMIC EXERCISE. ACCORDINGLY, GROUND N O.2 IS DISMISSED AS ACADEMIC. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . I.T.A. NO. 1394/M/2004 (AY: 1993-1994) (BY REVENUE) 11. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1(A). ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD CIT (A) ERRED IN HOLDING THAT THERE WAS NO REASON FOR THE A SSESSING OFFICER TO HAVE DISALLOWED DEPRECIATION CLAIMED OF RS. 16,95,465/- IN RESPECT OF THE LEASE TO M/S. RELIANCE SILICONS LTD. 1(B). ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD CIT (A) ERRED IN NOT APPRECIATING THAT THE LEASE TRANSACTIO N WITH M/S. RELIANCE SILICONS LTD. IN ALL RESPECTS WERE SIMILAR TO THAT MADE WITH OTHER CONCERNS WHERE THE DISALLOWANCE OF DEPRECIATION HAS BEEN UPHELD. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A ) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED . 9 12. AT THE OUTSET, BOTH THE PARTIES HAVE MENTIONED THAT ADJUDICATION OF THE THESE GROUNDS IS MERE ACADEMIC EXERCISE CONSIDERING OUR DECISION ON GROUND NO.1 IN ASSESSEES APPEAL RELATING TO VALIDITY OF T HE REASSESSMENT. CONSIDERING OUR DECISION ON GROUND NO.1, WHICH IS I N FAVOUR OF THE ASSESSEE, WE ARE OF THE OPINION THAT ADJUDICATION OF ABOVE GR OUNDS BECOMES AN ACADEMIC EXERCISE. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED AS ACADEMIC. 13. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF DECEMBER, 2012. SD/- SD/- (D. MANMOHAN) (D. KARUNAKAR A RAO) VICE PRESIDENT ACCOUNTANT MEMBER DATE : 12 .12.2012 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR D, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI