Anjan Kumar Naha, Kolkata V. I.T.O., Ward - 44(1), Kolkata , Kolkata

ITA 2380/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5304 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-05-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 24-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RABIN CHOUDHURY CITSRDR
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Reopening of assessment; Business income; Tangible material; Procedural lapse; Assessment record; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 148; 139

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2379 - 2381 / KOL / 20 17 ASSESSMENT YEARS :2009-10 TO 2011-12 ANJAN KUMAR NAHA C/O D.J. SHAH & CO. KALYAN BHAVAN 2, ELGIN ROAD, KOLKATA-700020 [ PAN NO.ABTPN 2458 B ] V/S . INCOME TAX OFFICER, WARD-44(1), 3, GOVERNMENT PLACE WEST, KOLKATA- 700001 /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI MIRAJ D SHAH, ADVOCATE /BY RESPONDENT SHRI RABIN CHOUDHURY, ADDL. CIT-SR-DR /DATE OF HEARING 02-05-2019 /DATE OF PRONOUNCEMENT 15-05-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THESE THREE APPEAL(S) FOR ASSESSMENT YEAR(S) 2009-1 0 TO 2011-12 ARISE FROM THE COMMISSIONER OF INCOME TAX (APPEALS)-13 KO LKATAS ORDER(S) ALL DATED 28.08.2017 PASSED IN CASE NOS.165, 168 & 167/ CIT(A)-13/KOL/2014-15 U/S 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE(S) AS WELL AS PAP ER BOOK(S) STANDS PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT THE ASSESSEES FIRST AND FOREMOST SUBSTANTIVE GRIEVANCE IDENTICALLY PLEADED IN ALL TH E THREE INSTANT APPEAL(S) CHALLENGE CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION TAKING RECOURSE TO SEC. 148 R.W.S. 147 RE-OPENING GIVING RISE TO HIS I MPUGNED RE-ASSESSMENT(S). THE ASSESSEES CASE AS PER ITS PLEADINGS QUA THE FO RMER ISSUE IS THAT THE ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 2 ASSESSING OFFICER HAD ERRED IN INITIATED THE IMPUGN ED PROCEEDINGS WITHOUT FORMING ANY REASONABLE BELIEF OF HIS TAXABLE INCOM E HAVING ESCAPED ASSESSMENT. HIS LATTER ARGUMENT IS THAT THE ASSESSI NG OFFICER NEVER SUPPLIED COPY OF THE RE-OPENING REASONS DESPITE MANY REQUEST S. HE QUOTES HON'BLE APEX COURTS DECISION IN G.K. N. DRIVESHAFTS (INDIA) LTD. VS. ITO (2003) 259 ITR 19 (SC) THAT THE RE-ASSESSMENTS ARE VITIATED QUA THE INSTANT LEGAL DEFECT AS WELL. 3. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESSEE HAS NOT RAISED THE INSTANT LEGAL ISSUE BEFORE THE LOWER AUT HORITIES AND THEREFORE, THE SAME DESERVES TO BE DECLINED ON THIS PRECISE REASON ALONE. MR. SHAH TAKES US CIT(A)S DISCUSSION IN PAGE-5 CLEARLY MENTIONING TH E ASSESSEE TO HAVE CANVASSED HIS LEGAL PLEA TO THIS EFFECT. WE THEREFO RE DECLINE THE REVENUES FOREGOING TECHNICAL PLEA. 4. COMING TO THE ASSESSEES FORMER ARGUMENTS THAT T HE ASSESSING OFFICER HAD NOT FORMING ANY REASONABLE BELIEF BASED ON TANG IBLE MATERIAL THAT THERE HAD BEEN A CASE OF HIS TAXABLE INCOME HAVING ESCAPE D ASSESSMENT, WE FIND THAT THE CORRESPONDING DETAILED RE-OPENING REASONS TO THIS EFFECT READS AS FOLLOWS:- SHRI ANJAN KR. NAHA PAN: ABTPN 2458P A.Y: 2009-10 31/03/14. THE ASSESSEE IS AN INDIVIDUAL SUBMITTED H IS RETURN OF INCOME FOR THE A.Y 2009-10 IN ITR-4 ON 30/09/2009 DISCLOSING TOTAL INC OME AT RS.1,59,643/-.THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE IT ACT ON 26/12/2011 ON A TOTAL INCOME OF RS.1, 92,060/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF SMT. SHYAMA NAHA, WIFE OF SHRI ANJAN KUMAR NAHA, STATEMENT FROM BANK HAVE BEEN TAK EN. ON PERUSAL OF THE BANK STATEMENT IT HAS BEEN GATHERED THAT SHRI ANJAN KUMA R NAHA IS HAVING FOLLOWING BANK ACCOUNTS EITHER IN HIS NAME AND JOINTLY WITH HIS FA MILY MEMBERS WHEREIN THERE ARE HUGE TRANSACTIONS DURING THE F.Y 2008-09 RELEVANT T O AY 2009-10. SL.NO. NAME OF THE ACCOUNT HOLDER A/C NO. & NAME OF THE BA NK 1 ANJAN KUMAR NAHA & ABHIJIT NAHA 1183010103298, UN ITED BANK OF INDIA 2 ANJAN KUMAR NAHA & VIKRAMJIT NAHA 1183010102725 UNITED BANK OF INDIA 3 ANJAN KUMAR NAHA & SHYAMA NAHA 3007854636, CENTRA L BANK OF INDIA 4 ANJAN KUMAR NAHA 100271, UNITED BANK OF INDIA 5 ANJAN KUMAR NAHA 1183050010271, UNITED BANK OF INDIA ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 3 ON FURTHER PERUSAL, IT WAS GATHERED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y 2009-10, BANK STATEMENT WAS FUR NISHED BY THE ASSESSEE BEARING ACCOUNT NO. 32910097287 WITH STANDARD CHART ERED BANK WHICH WAS FOR THE PART PERIOD I.E. -01.04.2008 TO 22.11.2008 ONLY WHE REAS FOR THE REMAINING PERIOD BANK STATEMENT OF M/S HIMANI ENTERPRISE WAS ENCLOSE D BEARING ACCOUNT NO.32905029120 FOR SUPPRESSION OF TOTAL RECEIPTS AS WELL AS PAYMENT. ON PERUSAL OF RETURN OF INCOME FOR AY 2009-10, IT I S FOUND THAT THE ABOVE MENTIONED BANK ACCOUNTS HAVE NOT BEEN SHOWN IN HIS RETURN OF INCOME. I HAVE, THEREFORE, REASON TO BELIEVE THAT INCOME CH ARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE YEAR UNDER REFERENCE AND THE CAS E IS FIT FOR REOPENING U/S/. 147 OF THE IT ACT BY ISSUING NOTICE U/S. 148 OF THE INCOME TAX ACT. IN THIS CASE, APPROVAL OF LEARNED. JCIT, RANGE-41, KOLKATA IS REQUIRED AS ASSESSMENT HAS BEEN MADE FOR THE RELEVANT ASSESSMEN T YEAR U/S.143(3) AND 4 YEARS FROM THE END OF THE RELEVANT. AY HAS NOT BEEN ELAPS ED. PUT UP FOR KIND PERUSAL AND APPROVAL. THE ASSESSEE VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT THE ABOVE EXTRACTED RE-OPENING REASONS MAKE IT CLEAR TH AT THE ASSESSING OFFICER HAD NOT BEEN FORMED ANY BELIEF OF HIS TAXABLE INCOM E HAVING ESCAPED ASSESSMENT BASED ANY TANGIBLE MATERIAL. OUR ATTENTI ON IS INVITED TO THE ABOVE EXTRACTED PORTION THAT THE ASSESSING OFFICER HAD ME RELY OBSERVED THAT THE ASSESSEE HAD MADE HUGE TRANSACTIONS IN HIS BANK ACC OUNT(S) NOT SHOWN IN THE RESPECTIVE RETURNS. MR. CHOUDHURY, ON THE OTHER HAN D, VEHEMENTLY SUPPORTS THE ABOVE RE-OPENING REASONS THAT THE ASSESSEE HAD NOT DISCLOSED THE CORRESPONDING BANK ACCOUNTS IN THE RETURN. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS QUA THE INSTANT FORMER ISSUE. THERE IS HARDLY ANY DISPUTE T HAT THE ASSESSING OFFICER HAS RECORDED HIS RE-OPENING REASONS ON THE GROUND T HAT THE ASSESSEES BANK ACCOUNTS ALLEGEDLY NOT SHOWN IN THE RETURN HAD SEEN HUGE TRANSACTIONS. THERE IS ADMITTEDLY NO RECORD OF SUCH TRANSACTIONS OR SUM S INVOLVED THEREIN WHICH COULD BE TAKEN AS THE TAXPAYERS TAXABLE INCOME HAV ING ESCAPED ASSESSMENT. NOW COMES THE QUESTION AS TO WHETHER THE ASSESSING OFFICER COULD INITIATE IMPUGNED PROCEEDINGS ON THE ACCOUNT OF THE MERE FAC T THAT THE ASSESSEE HAD MADE TRANSACTIONS NOT DISCLOSED IN HIS RETURN, THIS TRIBUNALS DECISION IN ITA NO. 123 TO 125/LKW/2017 IN RAVINDRA DEO TYAGI VS. I NCOME TAX OFFICER DECIDED ON 30.11.2018 HOLDS THAT SUCH RE-OPENING RE ASONS IN ABSENCE OF ANY ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 4 TAXABLE INCOME HAVING ESCAPED ASSESSMENT DO NOT WIT HSTAND THE TEST OF LAW AS FOLLOWS:- 7. HEARD. THE FACTS ARE NOT DISPUTED. A BARE PERUSA L OF THE REASONS RECORDED FOR ISSUANCE OF NOTICE U/S/. 148 OF THE ACT, SHOWS THAT THE ONLY MATERIAL AVAILABLE BEFORE THE AO WAS THE AIR INFORMATION OF THE ASSESSEE HAVI NG DEPOSITED AN AMOUNT OF RS.11,18,886/- LAKHS IN HIS SAVINGS BANK ACCOUNT. T HE ASSESSEE WAS ISSUED A NOTICE U/S 148 OF THE ACT IN PURSUANCE TO THE AFORESAID RE ASONS. IN BIR BAHADUR SINGH SIJWALI VS. ITO, WARD-1, HALDWANI 53 TAXMAN.COM 36 6 (DEL.-TRIB), LIKE IN THE PRESENT CASE, THE REASONS RECORDED INDICATED THAT CASH DEPO SITS HAD BEEN MADE IN THE BANK ACCOUNT OF THE ASSESSEE. THE TRIBUNAL HELD THAT THE MERE FACTUM OF DEPOSITS HAVING BEEN MADE IN A BANK ACCOUNT DOES NOT INDICATE THAT THESE DEPOSITS CONSTITUTE AN INCOME WHICH HAS ESCAPED ASSESSMENT. IT WAS OBSERVE D THAT THE REASONS RECORDED DID NOT MAKE OUT A CASE THAT THE ASSESSEE WAS ENGAG ED IN SOME BUSINESS AND THE INCOME FROM SUCH A BUSINESS HAD NOT BEEN RETURNED B Y THE ASSESSEE. IN THE CASE AT HAND ALSO, THE REASONS RECORDED DO NOT CONTAIN ANY SUCH RECITAL. THE TRIBUNAL HELD THAT THE FACTUM PER SE, OF DEPOSITS IN THE BANK ACC OUNT OF THE ASSESSEE COULD NOT BE MADE THE BASIS FOR HOLDING THE VIEW THAT INCOME HAD ESCAPED ASSESSMENT, OVER- LOOKING THAT THE SOURCES OF THE DEPOSITS NEED NOT N ECESSARILY BE THE INCOME OF THE ASSESSEE; AND THAT AS SUCH, THE REASONS RECORDED WE RE NOT SUFFICIENT TO BELIEVE ESCAPEMENT OF INCOME; THAT RATHER, THEY WERE REASON S TO SUSPECT ESCAPEMENT OF INCOME, WHICH WAS NOT ENOUGH FOR ISSUANCE OF A NOTI CE U/S 148 OF THE ACT. 8. SIJWALI (SUPRA) HAS BEEN FOLLOWED IN SH. ASHW ANI KUMAR VS. ITO, ORDER DATED 23.02.2016, PASSED BY THE ITAT, AMRITSAR (SMC), IN ITA NO. 129(ASR)/2015, FOR A.Y. 2005-06 AND IN KRISHNA KUMAR TRIPATHI VS. ITO, OR DER DATED 31.7.2017, PASSED BY THE ITAT, AGRA (SMC), IN ITA NO. 87/AGRA/2016, FOR A.Y. 2011-12. 9. SIJWALI (SUPRA) WAS ALSO FOLLOWED IN SH. AMRI K SINGH VS. ITO, ORDER DATED 11.05.2016, PASSED BY THE ITAT, AMRITSAR (SMC) IN I TA NO.630(ASR)/2015, FOR A.Y. 2006-07, TO HOLD, INTERALIA AS FOLLOWS: 45. IN BIR BAHADUR SINGH SIJWALI (SUPRA), IT HAS BEEN HELD THAT WHERE THE AO ISSUED A NOTICE U/S 148 ON THE GROUND THAT THERE WA S AN ESCAPEMENT OF INCOME AND THE BELIEF REGARDING SUCH ESCAPEMENT OF INCOME WAS FORMED ON THE FALLACIOUS ASSUMPTION OF THE AO THAT BANK DEPOS ITS CONSTITUTED UNDISCLOSED INCOME, OVER-LOOKING THE FACT THAT THE SOURCE OF THE DEPOSITS NEED NOT NECESSARILY BE THE INCOME OF THE ASSESSEE, THE REASSESSMENT PROCEEDINGS CANNOT BE SUSTAINED. IN THE PRESENT CAS E, SIMILARLY, THE BASIS OF INITIATION OF THE ASSESSMENT PROCEEDINGS U/S 147 WA S THE INFORMATION WITH THE DEPARTMENT, OF THE DEPOSITS MADE BY THE ASSESSEE IN HIS BANK ACCOUNT. 46. BIR BAHADUR SINGH SIJWALI (SUPRA), MAKES REFE RENCE TO HINDUSAN LEVER LTD. VS. R.B. WADKAR, 268 ITR 332 (BOM.), TO HOLD THAT THE REASONS RECORDED FOR REOPENING THE ASSESSMENT ARE TO BE EXAMINED ON A STANDALONE BASIS AND NOTHING CAN BE ADDED TO THE REASONS. IT WAS ALSO OB SERVED THAT THE REASONS MUST POINT OUT TO AN INCOME ESCAPING ASSESSMENT AND NOT MERELY NEED OF AN ENQUIRY WHICH MAY RESULT IN DETECTION OF AN INCOME ESCAPING ASSESSMENT. IT WAS OBSERVED THAT IT IS NECESSARY THAT THERE MUST B E SOMETHING WHICH INDICATES, EVEN IF IT DOES NOT ESTABLISH, THE ESCAP EMENT OF INCOME FROM ASSESSMENT; THAT IT IS ONLY ON THAT BASIS THAT THE AO CAN FORM A PRIMA-FACIE BELIEF THAT AN INCOME HAS ESCAPED ASSESSMENT; THAT MERELY BECAUSE SOME FURTHER INVESTIGATIONS HAVE NOT BEEN CARRIED OUT, W HICH, IF MADE, COULD HAVE LED TO DETECTION OF AN INCOME ESCAPING ASSESSMENT, THIS CANNOT BE REASON ENOUGH TO HOLD THE VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT; AND THAT ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 5 THERE HAS TO BE SOME KIND OF CAUSE AND EFFECT OF RE LATIONSHIP BETWEEN THE REASONS RECORDED AND THE INCOME ESCAPING ASSESSMENT . THE OBSERVATIONS OF THE HONBLE SUPREME COURT IN THE CASE OF ITO VS. L AKHMANI MEWAL DAS, 103 ITR 437 (SC), WERE REPRODUCED, AS UNDER: THE REASONS FOR THE FORMATION OF THE BELIEF MUST H AVE RATIONAL CONNECTION WITH OR RELEVANT BEARING ON THE FORMATIO N OF THE BELIEF. RATIONAL CONNECTION POSTULATES THAT THERE MUST BE A DIRECT NEXUS OR LIVE LINK BETWEEN THE MATERIAL COMING TO THE NOTICE OF THE ITO AND THE FORMATION OF THIS BELIEF THAT THERE HAS BEEN ESCAPE MENT OF THE INCOME OF THE ASSESSEE FROM ASSESSMENT IN THE PARTICULAR Y EAR BECAUSE OF HIS FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FA CTS. IT IS NO DOUBT TRUE THAT THE COURT CANNOT GO INTO SUFFICIENCY OR ADEQUA CY OF THE MATERIAL AND SUBSTITUTE ITS OWN OPINION FOR THAT OF THE ITO ON THE POINT AS TO WHETHER ACTION SHOULD BE INITIATED FOR REOPENING AS SESSMENT. AT THE SAME TIME WE HAVE TO BEAR IN MIND THAT IT IS NOT AN Y AND EVERY MATERIAL, HOWSOEVER VAGUE AND INDEFINITE OR DISTANT , REMOTE AND FARFETCHED, WHICH WOULD WARRANT THE FORMATION OF TH E BELIEF RELATING TO ESCAPEMENT OF THE INCOME OF THE ASSESSEE FROM ASSES SMENT. 47. IT WAS FURTHER OBSERVED AS FOLLOWS: 8. LET US, IN THE LIGHT OF THIS LEGAL POSITION, RE VERT TO THE FACTS OF THE CASE BEFORE US. ALL THAT THE REASONS RECORDED FOR R EOPENING INDICATE IS THAT CASH DEPOSITS AGGREGATING TO RS.10,24,100/- HA VE BEEN MADE IN THE BANK ACCOUNT OF THE ASSESSEE, BUT THE MERE FACT THAT THESE DEPOSITS HAVE BEEN MADE IN A BANK ACCOUNT DOES NOT INDICATE THAT THESE DEPOSITS CONSTITUTE AN INCOME WHICH HAS ESCAP ED ASSESSMENT. THE REASONS RECORDED FOR REOPENING THE ASSESSMENT D O NOT MAKE OUT A CASE THAT THE ASSESSEE WAS ENGAGED IN SOME BUSINE SS AND THE INCOME FROM SUCH A BUSINESS HAS NOT BEEN RETURNED B Y THE ASSESSEE. AS WE DO NOT HAVE THE LIBERTY TO EXAMINE THESE REAS ONS ON THE BASIS OF ANY OTHER MATERIAL OR FACT, OTHER THAN THE FACTS SET OUT IN THE REASONS SO RECORDED, IT IS NOT OPEN TO US TO DEAL WITH THE QUESTION AS TO WHETHER THE ASSESSEE COULD BE SAID TO BE ENGAGED IN ANY BUSINESS; ALL THAT IS TO BE EXAMINED IS WHETHER THE FACT OF T HE DEPOSITS, PER SE, IN THE BANK ACCOUNT OF THE ASSESSEE COULD BE BASIS OF HOLDING THE VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT. THE ANSWER, IN OUR HUMBLE UNDERSTANDING, IS IN NEGATIVE. THE ASSESSING OFFICE R HAS OPINED THAT AN INCOME OF RS.10,24,100/- HAS ESCAPED ASSESSMENT OF INCOME BECAUSE THE ASSESSEE HAS RS.10,24,100/- IN HIS BANK ACCOUNT BUT THEN SUCH AN OPINION PROCEEDS ON THE FALLACIOUS ASS UMPTION THAT THE BANK DEPOSITS CONSTITUTE UNDISCLOSED INCOME, AND OV ERLOOKS THE FACT THAT THE SOURCES OF DEPOSIT NEED NOT NECESSARILY BE INCOME OF THE ASSESSEE. OF COURSE, IT MAY BE DESIRABLE, FROM THE POINT OF VIEW OF REVENUE AUTHORITIES, TO EXAMINE THE MATTER IN DETAI L, BUT THEN REASSESSMENT PROCEEDINGS CANNOT BE RESORTED TO ONLY TO EXAMINE THE FACTS OF A CASE, NO MATTER HOW DESIRABLE THAT BE, U NLESS THERE IS A REASON TO BELIEVE, RATHER THAN SUSPECT, THAT AN INC OME HAS ESCAPEMENT ASSESSMENT. 48.THE TRIBUNAL CONCLUDED THUS: BUT THEN IN THE CASE BEFORE US THE ONLY REASON FOR REASSESSMENT PROCEEDINGS WAS THE FACT OF DEPOSIT OF BANK ACCOUNT WHICH BY ITSELF DOES NOT LEAD TO INCOME BEING TAXED IN THE HANDS OF THE ASSESSEE. LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO SEVERAL OTHER JUDICIAL PRECEDENTS IN SUPPORT OF THE PROPOSITION T HAT AT THE STAGE OF ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 6 INITIATION OF REASSESSMENT PROCEEDINGS, ALL THAT IS TO BE SEEN IS EXISTENCE, RATHER THAN ADEQUACY, OF THE MATERIAL TO COME TO THE CONCLUSION THAT INCOME HAS ESCAPED ASSESSMENT. THER E CANNOT BE ANY, AND THERE IS NO, DOUBT ON THE CORRECTNESS OF T HIS PROPOSITION BUT THEN, AS WE HAVE ELABORATELY EXPLAINED EARLIER IN T HIS ORDER, THE MATERIAL MUST INDICATE INCOME ESCAPING ASSESSMENT R ATHER THAN DESIRABILITY OF FURTHER PROBE IN THE MATTER WHICH M AY OR MAY NOT LEAD TO INCOME ESCAPING THE ASSESSMENT, IN OUR HUMBLE UNDER STANDING, CANNOT BE DRAWN. 49. NOW, IN KEEPING WITH BIR BAHADUR SINGH SIJWALI (SUPRA), THIS INFORMATION CANNOT FORM A VALID BASIS FOR INITIATING ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE I.T. ACT. AS OBSERVED IN BIR BAHADUR SI NGH SIJWALI (SUPRA), THE MERE FACT THAT THE DEPOSITS HAD BEEN MADE IN THE BA NK ACCOUNT DOES NOT INDICATE THAT THESE DEPOSITS CONSTITUTE INCOME WHIC H HAS ESCAPED ASSESSMENT. 50.THUS, IT WAS A MERE SUSPICION OF THE AO, THAT PR OMPTED HIM TO INITIATE ASSESSMENT PROCEEDINGS UNDER SECTION 147, WHICH IS NEITHER COUNTENANCED, NOR SUSTAINABLE IN LAW. TOO, THE AO PROCEEDED ON TH E FALLACIOUS ASSUMPTION THAT THE BANK DEPOSITS CONSTITUTED UNDISCLOSED INCO ME, OVER-LOOKING THE FACT THAT THE SOURCE OF THE DEPOSITS NEED NOT NECESSARIL Y BE THE INCOME OF THE ASSESSEE. THAT BEING SO, IN KEEPING WITH BIR BAHAD UR SINGH SIJWALI (SUPRA), THE REASONS RECORDED TO INITIATE ASSESSMENT PROCEED INGS UNDER SECTION 147 OF THE ACT AND ALL PROCEEDINGS PURSUANT THERETO, CULMI NATING IN THE IMPUGNED ORDER, ARE CANCELLED. GROUND NO.2 IS, ACCORDINGLY, ACCEPTED. 10. SIJWALI (SUPRA) AND AMRIK SINGH (SUPRA) WER E FOLLOWED IN MUNNI DEVI VS. ITO, ORDER DATED15.09.2016, PASSED BY THE ITAT, DELHI (S MC), IN ITA NO.3534/DEL/2014, FOR A.Y. 2007-08 AND HARMEET SINGH VS. ITO, ORDER DATED 10.02.2017 PASSED BY THE ITAT, DELHI (SMC), IN ITA NO. 1939/DEL/2016 FOR A.Y . 2008-09. 11. NO DECISION CONTRARY TO THE ABOVE DECISIONS HAS BEEN CITED BEFORE ME. 12. IN VIEW OF THE ABOVE, FINDING MERIT IN THE GRIE VANCE RAISED BY THE ASSESSEE, THE REASONS RECORDED BY THE AO FOR ISSUANCE OF NOTICE U /S 148 OF THE ACT ARE HELD TO BE INVALID, BEING REASONS NOT SUFFICIENT TO FORM BELIE F OF ESCAPEMENT OF INCOME, BASED ON VAGUE INFORMATION. ALL PROCEEDINGS PURSUANT THERETO , INCLUDING NOTICE ISSUED UNDER SECTION 148 OF THE I.T. ACT, THE ASSESSMENT ORDER A ND THE IMPUGNED ORDER ARE THUS ANNULLED AND CANCELLED. NO OTHER ISSUE SURVIVES FOR ADJUDICATION, NOR WAS ANYTHING ELSE ARGUED. COUPLED WITH THIS, THE ASSESSING OFFICER HAD ALSO N OT SUPPLIED THE ASSESSEE HIS RE-OPENING REASONS. THIS CLINCHING FACTUAL POSI TION HAS NO WHERE BEEN REBUTTED AT THE REVENUES BEHEST EITHER IN THE LOWE R APPELLATE DISCUSSION, THE ASSESSING OFFICERS REMAND REPORT AS WELL AS THE IN STANT SECOND APPELLATE PROCEEDINGS. WE NOTICE IN THESE BACKDROPS OF FACT T HAT HON'BLE DELHI HIGH COURTS DECISION IN ITA NO.916/DEL/2015 IN PR.CIT VS. JAGAT TALKIES DISTRIBUTORS DECIDED ON 29.08.2017 HOLDS THAT THE RE-OPENING I N SUCH A CASE IS VITIATED AS UNDER:- ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 7 2. THE SHORT QUESTION SOUGHT TO BE URGED BY THE RE VENUE IN THESE APPEALS IS WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE ITAT COULD HAVE HELD THAT SINCE THE ASSESSEE WAS NOT GIVEN THE COPY OF THE RE ASONS FOR ISSUING NOTICE UNDER SECTION 148 OF THE ACT BY THE ASSESSING OFFICER, TH E WHOLE ASSESSMENT PROCEEDINGS AND THE RESULTANT ORDER OF ASSESSMENT PASSED UNDER SECTION 143 (3) READ WITH 148 OF THE ACT HAVE BECOME VITIATED?' BACKGROUND FACTS 3. THE BACKGROUND FACTS ARE THAT THE RESPONDENT-ASS ESSEE, A FIRM, WAS ENGAGED IN THE BUSINESS OF EXHIBITION OF FILMS. IT ALSO RECEIV ED RENTAL INCOME. FOR THE AYS IN QUESTION, NO RETURN OF INCOME WAS FILED BY THE ASSE SSEE UNDER SECTION 139 (I) OF THE ACT, ALTHOUGH THE ASSESSEE WAS A REGISTERED TAX PAY ER AND HAD BEEN FILING ITS RETURNS OF INCOME IN EARLIER YEARS. 4. THE CASE OF THE DEPARTMENT WAS THAT ON EXAMINATI ON OF THE ASSESSMENT RECORDS, IT WAS NOTICED THAT THE ASSESSEE HAD INCOME FROM LETTI NG OUT OF THE PROPERTY TO SYNDICATE BANK, VIJAYA BANK AND CANARA BANK. ON THE BASIS OF THE INFORMATION RECEIVED FROM THE SAID BANKS, IT WAS DISCOVERED THA T RENT HAD BEEN PAID TO THE ASSESSEE BY THEM AFTER DEDUCTION OF TAX AT SOURCE. NOTICE UNDER SECTION 148 5. ON 2ND SEPTEMBER 2005, THE ASSESSING OFFICER ('A O') RECORDED REASONS FOR REOPENING OF THE ASSESSMENT IN THE FILE. ON THE SAM E DATE, I.E. 2ND SEPTEMBER 2005, NOTICE WAS ISSUED TO THE ASSESSEE UNDER SECTION 148 OF THE ACT ASKING IT TO FILE THE RETURN OF INCOME WITHIN 30 DAYS. IT IS STATED THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 16TH DECEMBER 2005, AFTER A LAPSE OF MORE THAN 3 MONTHS. NOTICES WERE ISSUED UNDER SECTION 143 (2) AND 142 (I) OF THE ACT BY THE AO ALONG WITH A QUESTIONNAIRE. SEPARATE NOTICES WERE ISSUED FOR EAC H OF THE AY S. 6. AS FAR AS AY 1999-00 WAS CONCERNED, THE RETURN O F INCOME FILED BY THE ASSESSEE ON 31ST MARCH 2006 PURSUANT TO THE NOTICE UNDER SEC TION 148 OF THE ACT DISCLOSED FOR THE FIRST TIME, INCOME OF RS.2,61,677/-, WHICH INCL UDED INCOME FROM THE HOUSE PROPERTY AND BUSINESS INCOME FROM NOVELTY CINEMA. IT IS STATED THAT THE ASSESSEE FIRM, AT VARIOUS STA GES BEFORE THE AO IN THE REASSESSMENT PROCEEDINGS SOUGHT A NUMBER OF ADJOURN MENTS. ADMITTEDLY, ON 23RD JUNE 2006, A LETTER ADDRESSED TO THE AO BY THE ASSE SSEE SOUGHT SUPPLY OF THE REASONS FOR REOPENING OF THE ASSESSMENT UNDER SECTI ON 148 OF THE ACT. 7. ADMITTEDLY, FOR NONE OF THE AYS WERE REASONS FOR REOPENING FURNISHED BY THE AO TO THE ASSESSEE. SINCE THE ASSESSMENT WAS GETTING TIME BARRED ON 22ND DECEMBER 2006, THE AO ON 22ND DECEMBER 2006 PROCEEDED TO PAS S SEPARATE REASSESSMENT ORDERS IN RESPECT OF EACH OF THE ABOVE AY S, MAKING ADDITIONS OF THE INCOME FROM HOUSE PROPERTY. PROCEEDINGS BEFORE THE CIT(A) 8. AGGRIEVED BY THE ASSESSMENT ORDERS, THE ASSESSEE FILED SEPARATE APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ['CIT(A)'] . IN THE APPEALS, ONE OF THE PRINCIPAL CONTENTIONS RAISED BY THE ASSESSEE WAS RE GARDING FAILURE OF THE AO TO SUPPLY THE ASSESSEE REASONS FOR REOPENING OF THE AS SESSMENT. DURING THE PENDENCY OF THE APPELLATE PROCEEDINGS, A REMAND REPORT WAS C ALLED FOR BY THE CIT (A) FROM THE AO. THIS REMAND REPORT WAS SUBMITTED BY THE AO ON 1 3TH JULY 2007 AND A COPY THEREOF WAS PROVIDED TO THE ASSESSEE WHO FILED A RE SPONSE THERETO ON 4TH DECEMBER 2007. ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 8 9. THE CASE OF THE ASSESSEE WAS THAT THE AO HAD IGN ORED THE ASSESSEE'S REQUEST FOR BEING PROVIDED WITH THE COPY OF THE REASONS. IN TER MS OF THE JUDGMENT OF THE SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LIMITED V. ITO [20 03] 259 ITR 19 (SC), THE ENTIRE REASSESSMENT PROCEEDINGS STOOD VITIATED ON THAT SCO RE. 10. THE CIT (A), BY SEPARATE ORDERS DATED 7TH JANUA RY 2008, DISMISSED THE APPEALS. THE CIT (A) NOTED THAT THE ASSESSEE HAD MADE A REQU EST FOR BEING FURNISHED REASONS FOR REOPENING THE CASE UNDER SECTION 148 AF TER ALMOST A YEAR AFTER THE FIRST NOTICE WAS ISSUED AND DID NOT BOTHER TO FOLLOW UP T HIS REQUEST THEREAFTER. REPEATED ADJOURNMENTS WERE SOUGHT BY THE ASSESSEE AND THEREF ORE, REASONABLE OPPORTUNITY WAS GIVEN TO THE ASSESSEE. THE REMAND REPORT OF THE AO DATED 13TH JULY 2007 REFERRED TO TWO SEPARATE AND INDEPENDENT FACTS - (I ) THAT THE ASSESSEE HAD FAILED TO FILE THE RETURN OF INCOME FOR THE AY 1998-99 AND TH E OTHER AYS IN QUESTION AND; (II) THE EXISTING ASSESSMENT RECORDS SHOWED THAT THE ASS ESSEE WAS IN RECEIPT OF RENTAL INCOME FROM HOUSE PROPERTY AND ALSO HAD BUSINESS IN COME FROM EXHIBITION OF FILMS. THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT ALSO PROVED THESE FACTS. 11. SECONDLY, THE CIT (A) HELD THAT THE ASSESSEE'S PLEA THAT THE NOTICE UNDER SECTION 148 WAS ON THE BASIS OF 'REASONS TO SUSPECT' AND NO T 'REASONS TO BELIEVE' WAS WITHOUT MERIT. FURTHER, THE CIT (A) HELD THAT SINCE SUFFICI ENT OPPORTUNITY HAD BEEN VITIATED BY THE ASSESSEE BEFORE THE AO, THE FAILURE TO FURNISH THE REASONS TO REOPEN COULD NOT BE SAID TO BE FATAL TO THE ASSESSMENT PROCEEDINGS. IT WAS NOT AS IF THE ASSESSEE WAS UNAWARE OF THE REASONS FOR REOPENING THE ASSESSMENT . THE AO'S REMAND REPORT DID ENCLOSE A COPY OF THE REASONS. IT IS OBSERVED BY TH E CIT (A) THAT, NO DOUBT, THE AO OUGHT TO HAVE ENSURED THAT THE REASONS FOR ISSUING THE NOTICE UNDER SECTION 148 WAS COMMUNICATED FORMALLY AND ALSO IMMEDIATELY UPON THE REQUEST OF THE ASSESSEE MADE IN THE LETTER DATED 23RD AUGUST 2006, BUT IT W AS ALSO A MATTER OF RECORD THAT THE ASSESSEE DID NOT PRESS NOR CONVEY ITS GRIEVANCE TO ANY SUPERIOR AUTHORITY DURING THE ASSESSMENT PROCEEDINGS, WHICH WOULD HAVE BEEN THE L OGICAL COURSE OF ACTION HAD IT GENUINELY FELT AGGRIEVED. 12. THE CIT (A) ALSO PROCEEDED TO DISTINGUISH THE I TAT'S EARLIER DECISION FOR THE AY 1995-96 IN THE ASSESSEE'S OWN CASE WHERE, FOR THE V ERY SAME REASON, THE ASSESSMENT ORDER WAS QUASHED. 13. AS FAR AS THE PREVIOUS ORDER FOR THE AY 1995-96 WAS CONCERNED, THE CIT (A) HELD THAT THE ASSESSEE HAD IN FACT NEVER MADE A REQUEST FOR BEING FURNISHED THE REASONS FOR REOPENING OF THE ASSESSMENT. THE LETTER OF THE ASSESSEE TO THE AO RELIED UPON BEFORE THE ITAT IN FACT MADE NO SUCH REQUEST. IT WA S ACCORDINGLY CONTENDED THAT SINCE THE ITAT WAS MISLEAD, THE ORDER OF THE ITAT F OR THE AY 1995-96 WAS NOT APPLICABLE. THE CIT (A) ALSO DISTINGUISHED THE DECI SION OF THE SUPREME COURT IN GKN DRIVESHAFTS (SUPRA) AND HELD THAT THE MERE NON-FURN ISHING OF REASONS FOR REOPENING THE ASSESSMENT WOULD NOT RESULT IN ENTIRE REASSESSM ENT PROCEEDINGS BEING INVALIDATED. IT WAS HELD THAT IN THE PRESENT CASE T HE ASSESSEE HAD, DESPITE HAVING TAXABLE INCOME, FAILED TO FILE RETURNS AS STATUTORI LY MANDATED UNDER SECTION 139(I) OF THE ACT. THE REASONS FOR THE NOTICE UNDER SECTION 1 48 OF THE ACT WAS ALWAYS IN THE KNOWLEDGE OF THE ASSESSEE. THE LAPSE IN NOT PROVIDI NG THE REASONS WAS 'PROCEDURAL' AND WOULD NOT RENDER THE ENTIRE REASSESSMENT PROCEE DINGS INVALID. IMPUGNED ORDER OF THE IT AT 14. WHEN THE MATTER TRAVELLED AT THE INSTANCE OF TH E ASSESSEE TO THE ITAT, A REFERENCE WAS MADE BY THE ASSESSEE TO THE DECISION OF THIS COURT IN HARYANA ACRYLIC ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 9 MANUFACTURING COMPANY V. THE COMMISSIONER OF INCOME TAX IV [2009] 308 ITR 38 (DEL) AND THAT OF THE BOMBAY HIGH COURT IN CIT V. F OMENTO RESORTS AND HOTELS LIMITED (DECISION DATED 27TH NOVEMBER 2006 IN ITA N O. 7112006). IT WAS HELD THAT THE DECISION OF THIS COURT IN HARYANA ACRYLIC (SUPR A) WAS BINDING ON THE REVENUE. THE FAILURE TO SUPPLY THE REASONS UNDER SECTION 148 OF THE ACT DESPITE REQUESTS WAS HELD TO HAVE VITIATED THE ENTIRE REASSESSMENT PROCE EDINGS. SUBMISSIONS OF COUNSEL FOR THE REVENUE 15. MR. ZOHEB HOSSAIN, LEARNED SENIOR STANDING COUN SEL FOR THE REVENUE, SUBMITTED THAT EVEN IN GKN DRIVESHAFTS (SUPRA) THE SUPREME CO URT DID NOT INVALIDATE THE ENTIRE ASSESSMENT PROCEEDING BUT ONLY PERMITTED THE ASSESS EE TO AGAIN AVAIL OF AN OPPORTUNITY OF TILING ITS OBJECTIONS TO THE REOPENI NG OF THE ASSESSMENT. THE REASSESSMENT PROCEEDINGS WERE KEPT IN ABEYANCE TILL THIS PROCEDURE WAS COMPLETED. IT IS ACCORDINGLY SUBMITTED THAT, IN THE PRESENT CA SE ALSO, IF THE COURT IS OF THE VIEW THAT PROCEDURE OUTLINED IN GKN DRIVESHAFT (SUPRA) W AS NOT COMPLETED AND THAT THE REASSESSMENT PROCEEDINGS COULD NOT HAVE CONTINUED, THE COURT CAN DIRECT THE ENTIRE PROCEEDINGS TO RECOMMENCE FROM THAT STAGE AND GIVE A TIME-BOUND DIRECTION FOR COMPLETING OF THE PROCEDURE INVOLVING CONSIDERATION OF THE ASSESSEE'S OBJECTIONS TO THE REOPENING OF THE ASSESSMENT. 16. WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, MR. HOSSAIN SUBMITTED THAT THE PRESENT CASE IS DISTINGUISHABLE FROM THE DECISIONS IN GKN DRIVESHAFTS (SUPRA) AND HARYANA ACRYLIC (SUPRA). THIS WAS A CASE WHERE NO R ETURN WAS FILED BY THE ASSESSEE FOR THE AY IN QUESTION DESPITE HAVING BOTH BUSINESS INCOME AS WELL AS INCOME FROM HOUSE PROPERTY. THEREFORE, THE AA WAS JUSTIFIED IN HAVING REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. HE REFERRED TO THE D ECISION IN CIT V. P.C. CHEMICALS (2013) 359 ITR 129 WHICH IN TURN REFERRE D TO THE DECISION OF THE SUPREME COURT IN INCOME TAX OFFICER V. M. PIRAI CHOODI (201 1) 334 ITR 262 (SC). MR. HOSSAIN ALSO RELIED ON THE DECISION OF THE SUPREME , COURT IN CIT, SHILLONG V. JAI PRAKASH SINGH(L996) 3 SCC 525 WHERE IT WAS HELD THAT MERE F AILURE TO PRODUCE A WITNESS FOR CROSS-EXAMINATION WOULD NOT VITIATE THE ENTIRE ASSE SSMENT PROCEEDINGS. ONE MORE OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO GO BEFORE THE AO FOR THAT PURPOSE. SUBMISSIONS ON BEHALF OF THE ASSESSEE 17. MR. YK. KAPUR, LEARNED COUNSEL FOR THE ASSESSEE , ON THE OTHER HAND RELIED ON THE PASSAGES IN GKN DRIVESHAFT (INDIA) LIMITED V. ITO ( SUPRA), HARYANA ACRYLIC MANUFACTURING COMPANY V. THE COMMISSIONER OF INCOME TAX (SUPRA) AND THE DECISIONS OF THE BOMBAY HIGH COURT COMMISSIONER OF INCOME TAX V. TREND ELECTRONICS MANU/MH/2724/2015 AND CIT V. FOMENTO RE SORTS AND HOTELS LIMITED (SUPRA). 18. MR. KAPUR SUBMITTED THAT THE LAW WAS WELL SETTL ED THAT A FAILURE TO SUPPLY REASONS UNDER SECTION 148 OF THE ACT WOULD VITIATE THE ENTI RE REASSESSMENT PROCEEDINGS. ANALYSIS AND REASONS 19. THE ABOVE SUBMISSIONS HAVE BEEN CONSIDERED. IN GKN DRIVESHAFT (INDIA) LIMITED V. ITO (SUPRA), THE SUPREME COURT HIGHLIGHTED THE P ROCEDURE THAT OUGHT TO BE FOLLOWED WHEN THE ASSESSMENT IS PROPOSED TO BE REOP ENED UNDER SECTION 148 OF THE ACT. IT EXPLAINED THAT 'THE PROPER COURSE OF ACTION FOR THE NOTICE TO FILE RETURN AND IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICES. TH E ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. UN RE6EIP T OF REASONS, THE ASSESSEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE A ND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER.' ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 10 20. IT APPEARS THAT IN THE ABOVE CASE, THE REASONS WERE FURNISHED ONLY DURING THE COURSE OF THE PROCEEDINGS IN THE SUPREME COURT. PRI OR THERETO NO SUCH PROCEDURE HAD BEEN DEVISED REGARDING RAISING OF OBJECTIONS TO THE REOPENING AND THE DISPOSAL OF SUCH OBJECTIONS BY THE AO BY A SPEAKING ORDER EVEN PRIOR TO THE COMMENCEMENT OF THE REASSESSMENT PROCEEDINGS. ON THE FACTS OF THAT CASE, THE SUPREME COURT IT WAS DIRECTED THAT 'THE ASSESSING OFFICER HAS TO DISPOSE OF THE OBJECTIONS IF FILED, BY PASSING A SPEAKING ORDER, BEFORE PROCEEDING WITH TH E ASSESSMENT, IN RESPECT OF THE ABOVESAID FIVE ASSESSMENT ORDERS.' 21. THE ABOVE DECISION IN GKN DRIVESHAFT (INDIA) LI MITED V. ITO (SUPRA) WAS DATED 25TH NOVEMBER 2002. AFTER THIS DATE THE LAW IS PRES UMED T'! HAVE BEEN WITHIN THE KNOWLEDGE OF ALL THE REVENUE OFFICIALS. THE FAILURE THEREAFTER BY THE AO TO PROVIDE THE ASSESSEE THE REASONS FOR REOPENING THE ASSESSMENT C OULD NOT BE TREATED AS A MERE PROCEDURAL LAPSE. IT WOULD NOT IN ALL CASES BE OPEN TO THE REVENUE TO SIMPLY SEEK TO OVERCOME THIS LAPSE BY OFFERING THAT THE AO WILL CO NSIDER THE ASSESSEE'S OBJECTIONS AND PASS A FRESH REASONED ORDER THEREON. THIS WILL DEPEND ON THE FACTS AND CIRCUMSTANCES OF EACH CASE. IF THE LAPSE IS DISCOVE RED WITHIN A SHORT TIME AND THE OFFER TO RECTIFY THE APSE IS MADE SOON THEREAFTER, NO PREJUDICE COULD BE SAID TO BE CAUSED EITHER TO THE ASSESSEE OR THE REVENUE. WHERE , HOWEVER, THE REVENUE CONTESTS THE POSITION AT EVERY STAGE AND OFFERS TO CONSIDER THE OBJECTIONS SEVERAL YEARS AFTER IT SHOULD HAVE IN THE FIRST PLACE, THE REQUEST TO START THE PROCEEDINGS DE NOVO MAY NEITHER BE FAIR NOR EFFICACIOUS. 22. IN THE PRESENT CASE THE ASSESSMENTS OF AY S 199 9-2000 ONWARDS FOR FIVE YEARS ARE SOUGHT TO BE REOPENED. THE OFFER TO CONSIDER TH E ASSESSEE'S OBJECTIONS TO THE REOPENING AND PASS AN ORDER THEREON IS BEING MADE A FTER NEARLY TWO DECADES. HAVING CONTESTED THESE PROCEEDINGS FOR ALL THESE YE ARS THE REVENUE IS NOT FAIR IN MAKING THIS OFFER AFTER ALL THESE YEARS. CONSEQUENT LY, THIS COURT IS UNABLE TO ACCEPT THE SUBMISSIONS OF MR. HOSSAIN THAT IN THE PRESENT CASE INVOLVING THE REOPENING OF ASSESSMENTS FOR AYS 1999-2000 TO 2004-05 THE PROCEE DINGS IN TERMS OF THE DECISION IN GKN DRIVESHAFT (INDIA) LIMITED V. ITO (SUPRA) SH OULD RESUME DE NOVO BEFORE THE AO. 23. THE REVENUE DOES NOT DISPUTE THAT THERE WAS A F AILURE TO FURNISH THE REASONS FOR REOPENING OF THE ASSESSMENT. THEREFORE, THERE WAS A CLEAR VIOLATION OF THE PROCEDURE LAID DOWN BY THE SUPREME COURT IN GKN DRIVESHAFT (I NDIA) LIMITED V. ITA (SUPRA). THE DECISION OF THIS COURT IN HARYANA ACRYLIC MANUFACTU RING COMPANY V. THE COMMISSIONER OF INCOME TAX (SUPRA) REITERATES THAT THE IT IS MANDATORY FOR THE AO TO SUPPLY REASONS FOR REOPENING THE ASSESSMENT AND THI S HAS TO BE DONE WITHIN A REASONABLE TIME. IT WAS FURTHER OBSERVED BY THIS CO URT AS UNDER:- ' .... A NOTICE UNDER SECTION 148 WITHOUT THE COMMU NICATION OF THE REASONS THEREFORE IS MEANINGLESS INASMUCH AS THE ASSESSING OFFICER IS BOUND TO FURNISH THE REASONS WITHIN A REASONABLE TIME. IN A CASE, WHERE THE NOTICE HAS BEEN ISSUED WITHIN THE SAID PERIOD OF SIX YEARS, BU T THE REASONS HAVE NOT FURNISHED WITHIN THAT PERIOD, IN OUR VIEW, ANY PROC EEDINGS PURSUANT THERETO WOULD BE HIT BY THE BAR OF LIMITATION INASMUCH AS T HE ISSUANCE OF THE NOTICE AND THE COMMUNICATION AND FURNISHING OF REASONS GO HAND-IN-HAND. THE EXPRESSION WITHIN A REASONABLE PERIOD OF TIME AS US ED BY THE SUPREME COURT IN GKN DRIVESHAFT (INDIA) LIMITED (SUPRA) CANNOT BE STRETCHED TO SUCH AN EXTENT THAT IT EXTENDS EVEN BEYOND THE SIX YEARS ST IPULATED IN SECTION 149.' 24. MR. HOSSAIN SOUGHT TO DISTINGUISH THE DECISION IN HARYANA ACRYLIC MANUFACTURING COMPANY V. THE COMMISSIONER OF INCOME TAX (SUPRA) O N THE GROUND THAT THE ASSESSEE IN THAT CASE HAD FILED ITS RETURN WHICH WA S SCRUTINIZED AND AN ORDER WAS ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 11 PASSED IN THE FIRST INSTANCE UNDER SECTION 143(3) O F THE ACT WHEREAS IN THE PRESENT CASE THE ASSESSEE HAS NOT FILED RETURN AT ALL. IN T HE CONSIDERED VIEW OF THIS COURT, THIS IS NOT A DISTINGUISHING FACTOR. THE COURT IS UNABLE TO DISCERN ANY REASON WHY THE AO FAILED TO FURNISH THE REASONS FOR REOPENING THE ASS ESSMENT TO THE ASSESSEE. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD MADE A REQUEST IN WRITING FOR THE REASONS IN RESPECT OF EACH OF THE AY S IN QUESTION. MERELY BECAUSE THE ASSESSEE DID NOT REPEAT THE REQUEST CANNOT MEAN THAT THE ASSESSEE WAIVED ITS RI GHT TO BE PROVIDED THE REASONS. THE PROVISO TO SECTION 292 BB (I) OF THE ACT MAKES IT CLEAR THAT THERE IS NO ESTOPPEL AGAINST AN ASSESSEE ON ACCOUNT OF PARTICIPATING IN THE PROCEEDINGS AS LONG AS IT HAS RAISED AN OBJECTION IN WRITING REGARDING THE FAILUR E BY THE AO TO FOLLOW THE PRESCRIBED PROCEDURE. 25. THE COURT IS ALSO OF THE VIEW THAT NO COMPARISO N CAN BE DRAWN WITH A SITUATION WHERE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS A N OPPORTUNITY TO EXAMINE A WITNESS IS DENIED. THAT WAS THE SITUATION IN INCOME TAX OFFICER V. M. PIRAI CHOODI (SUPRA). THERE THE SUPREME COURT WAS OF THE VIEW TH AT IF THERE WAS A FAILURE BY THE AO TO PROVIDE THE ASSESSEE AN OPPORTUNITY OF CROSS- EXAMINATION OF A WITNESS, THE ASSESSEE COULD HAVE GONE IN APPEAL. IN THAT CASE IT WAS FOUND THAT 'THE ASSESSEE HAD FAILED TO AVAIL STATUTORY REMEDY.' HERE THERE I S NO FAILURE BY THE ASSESSEE TO RAISE OBJECTIONS AT EVERY STAGE OF PROCEEDINGS. 26. THE DECISION IN CIT V. P.C. CHEMICALS (SUPRA) I S ALSO NOT OF HELP TO THE REVENUE. THOSE APPEALS OF THE REVENUE WERE DISMISSED BY THIS COURT. 27. THE DECISIONS OF BOMBAY HIGH COURT IN CIT V. TR END ELECTRONICS (SUPRA) AND CIT V. VIDESH SANCHAR NIGAM LIMITED MANULMH1I805/20 II SUPPORT THE CASE OF THE ASSESSEE. IN THE LAST MENTIONED DECISION, THE BOMBA Y HIGH COURT HELD AS UNDER: 'IT IS AXIOMATIC THAT POWER TO REOPEN A COMPLETED A SSESSMENT UNDER THE ACT IS AN EXCEPTIONAL POWER AND WHENEVER REVENUE SEEKS TO EXE RCISE SUCH POWER, THEY MUST STRICTLY COMPLY WITH THE PREREQUISITE CONDITIONS VI Z., REOPENING OF REASONS TO INDICATE THAT THE ASSESSING OFFICER HAD REASON TO BELIEVE TH AT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WHICH WOULD WARRANT THE REOPENIN G OF AN ASSESSMENT. THESE RECORDED REASONS AS LAID DOWN BY THE APEX COURT MUS T BE FURNISHED TO THE ASSESSEE WHEN SOUGHT FOR SO AS TO ENABLE THE ASSESSEE TO OBJ ECT 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 L AW. THE RECORDING OF REASONS (WHICH HAS BEEN DONE IN THIS CASE) AND FURNISHING O F THE SAME HAS TO BE STRICTLY COMPLIED WITH AS IT IS A JURISDICTIONAL ISSUE. THIS REQUIREMENT IS VERY SALUTARY AS IT NOT ANY ENSURES REOPENING NOTICES ARE NOT LIGHTLY ISSUE D. 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 BELIEV E AS RECORDED IN THE REASONS DO NOT WARRANT REOPENING BEFORE THE REASSESSMENT PROCEEDIN GS ARE COMMENCED. THE ASSESSING OFFICER DISPOSES OF THESE OBJECTIONS AND IF SATISFIED WITH THE OBJECTIONS, THEN THE IMPUGNED REOPENING NOTICE UNDER SECTION 14 8 OF THE ACT IS DROPPED/WITHDRAWN OTHERWISE IT IS PROCEEDED WITH FU RTHER. IN ISSUES SUCH AS THIS I.E. WHERE JURISDICTIONAL ISSUE IS INVOLVED THE SAME MUS T BE STRICTLY COMPLIED WITH BY THE AUTHORITY CONCERNED AND NO QUESTION OF KNOWLEDGE BE ING ATTRIBUTED ON THE BASIS FO IMPLICATION CAN ARRIVE. WE ALSO DO NOT APPRECIATE T HE STAND OF THE REVENUE, THAT THE RESPONDENT-ASSESSEE HAD ASKED FOR REASONS RECORDED ONLY ONCE AND THEREFORE, SEEKING TO JUSTIFY NON-FURNISHING OF REASONS. WE EX PECT THE STATE TO ACT MORE RESPONSIBLY. CONCLUSION. 28. THE COURT RESPECTFULLY CONCURS WITH THE ABOVE V IEW OF THE BOMB ASSESSMENT YEAR HIGH COURT AND HOLDS THAT IN THE PRESENT CASE THE ITAT WAS RIGHT IN COMING TO ITA NO.2379-2381/KOL/2017 A.YS. 09-1 0 TO 11-12 ANJAN KR. NAHA VS. ITO, WD-44(1), KOL. PAGE 12 THE CONCLUSION THAT ON ACCOUNT OF FAILURE BY THE A O TO FURNISH REASONS FOR REOPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE ACT TO T HE ASSESSEE, THE REASSESSMENT PROCEEDINGS STOOD VITIATED I LAW. 6. WE ADOPT THE ABOVE TWIN DETAILED REASONING MUTATIS MUTANDIS TO ANNUL THE IMPUGNED RE-OPENING / RE-ASSESSMENT PROCEEDINGS U/S 148 R.W.S. 147 OF THE ACT. THE ASSESSEES IDENTICAL FORMER LEGAL GROU ND RAISED IN THESE THREE APPEALS IS ACCEPTED. HIS ALL OTHER SUBSTANTIVE GROU NDS ON MERITS ARE RENDERED INFRUCTUOUS. 7. THESE THREE ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 15/ 05/2019 SD/- SD/- ( ) (( ) (DR.A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S )- 15 / 05 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-ANJAN KR. NAHA, C/O D.J. SHAH & CO KALYAN BHAVAN, 2 ELGIN ROAD, KOLKAT-20 2. /REVENUE-ITO WARD-44(1), 3, GOVERNMENT PLACE WEST, KOLKATA-700001 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. 8 ((4, 4, / DR, ITAT, KOLKATA 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ 4,