TRENDS ELECTRONICS, MUMBAI V. ITO 24(1)(2), MUMBAI

ITA 901/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92824 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 13-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 04-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Reopening of assessment; Principle of natural justice; Difference of opinion; Validity of assessment; Reassessment proceedings
• Section: 143(3); 148; 11

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JM AND SHRI D. KARUNAKAR A RAO, AM ./ I.T.A. NO.901 /MUM/2013 ( / ASSESSMENT YEAR : 2007-08 M/S TRENDS ELECTRONICS, 156, VEERA DALWAI INDUSTRIAL ESTATE, S V ROAD, JOGESHWARI (WEST), MUMBAI -400 102. / VS. INCOME TAX OFFICER, WARD 24(1)(2), MUMBAI. ./ PAN : AACFT4877A ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI VIJAY MEHTA RESPONDENT BY SHRI NEIL PHILIP (D.R) / DATE OF HEARING : 13-05-2015 / DATE OF PRONOUNCEMENT : 10-06-2015 [ !' / O R D E R PER VIJAY PAL RAO, J.M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 06-11-2012 OF LD. CIT(A)- 34, MUMBAI PERTAINING TO A.Y. 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADDITION OF RS. 4757658/- ON ACCOUNT OF ALLEGED NON GENUINE PURCHASES FROM MIS SONOTRON TRADING CO. P LTD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN RELYING UPON THE STATEMENT OF PARTNERS OF THE APPELLANT FIRM INS PITE OF THE FACT THAT THE SAID STATEMENTS HAVE BEEN RETRACTED BY THE DEPO NENT AS THE SAME IS NOT CORRECTLY RECORDED. ITA 901/M/13 2 3. THE ORDER MADE UNDER SECTION 143(3) RWS 147 OF T HE ACT IS BAD IN LAW IN AS MUCH AS REASON RECORDED BY THE ASSESSING OFFI CER BEFORE ISSUING NOTICE UNDER SECTION 148 OF THE ACT HAS NOT BEEN PR OVIDED TO THE APPELLANT BEFORE MAKING SAID ORDER UNDER SECTION 14 3(3) RWS 147 OF THE ACT. 4. THE ORDER MADE UNDER SECTION 250 OF THE ACT BY C OMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING ORDER MADE UNDER SE CTION 143 (3) RWS 147 OF THE ACT IS ILLEGAL, BAD-IN-LAW, ULTRA VIRUS AND WITHOUT ALLOWING REASONABLE OPPORTUNITY OF THE HEARING, AND WITHOUT APPRECIATING THE FACTS, SUBMISSION AND EVIDENCES IN THEIR PROPER PER SPECTIVE AND WITHOUT PASSING SAID ORDER WITHIN REASONABLE TIME AFTER THE LAST DATE OF HEARING IS LIABLE TO BE ANNULLED. 5. THE LEARNED ASSESSING OFFICER ERRED IN CHARGING INTEREST UNDER SECTION 234A, 2348, 234 C AND 2340 OF THE ACT. 3. SINCE THE ASSESSEE HAS RAISED THE ISSUE OF VALIDITY OF REASSESSMENT U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 WHICH GOES TO THE ROOT OF THE MATTER, THEREFORE, WE FIRST TAKE UP GROUND NO. 3 OF THE ASSESSEES APPEAL FOR ADJUDICATION. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSMENT WAS REOPENED BY ISSUING NOTICE U/S 148 OF THE ACT O N 26-3-2010. IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT, THE ASSESSEE FILE D A LETTER DATED 28-4-2010 AND REQUESTED THE A.O. TO FURNISH THE REASONS FOR R EOPENING. HE HAS FURTHER POINTED OUT THAT BY THIS LETTER THE ASSESSEE REQUES TED THE REASONS FOR REOPENING FOR BOTH THE ASSESSMENT YEARS I.E. 2007-0 8 AND 2008-09. THE A.O. HAS COMPLETED THE REASSESSMENT U/S 143(3) R.W.S. 14 7 WITHOUT FURNISHING THE REASONS FOR REOPENING TO THE ASSESSEE. THE LD. COU NSEL HAS INVITED OUR ATTENTION TO THE ORDER OF THE TRIBUNAL DATED 25-5-2 013 IN ASSESSEES OWN CASE FOR A.Y. 2008-09 IN ITA NO. 902 OF 2013 AND SUBMITT ED THAT THE REASSESSMENT HAS BEEN QUASHED BY THE TRIBUNAL ON THE GROUND THAT THE A.O. HAS NOT FURNISHED THE REASONS RECORDED FOR REOPENING OF ASS ESSMENT BEFORE PASSING THE REASSESSMENT ORDER. THUS, THE LD. COUNSEL HAS SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER O F THE TRIBUNAL IN ASSESSEES ITA 901/M/13 3 OWN CASE. HE HAS ALSO RELIED UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GHANSHYAM K. KHABRANI VS. ACIT & ORS [2012] 346 ITR 443 (BOM). 5. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT THE ASSESSEE HAS MADE A REQUEST VIDE ITS LETTER DATED 28-4-2010 FOR FURNISHING THE REASONS RECORDED BY THE A.O. FOR REOPENING OF THE ASSESSMEN T PRIOR TO FILING OF THE RETURN OF INCOME. THE LD. D.R. FURTHER SUBMITTED T HAT THE ASSESSEE IN THE SAID LETTER HAS ALSO REQUESTED FOR 15 DAYS TIME TO FILE THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THE LD. D.R. HAS POINTED OUT THAT THE A.O. HAS CONSIDERED THE REQUEST OF THE ASSESSEE AND VIDE LETTER DATED 29- 4-2010 ASKED THE ASSESSEE TO FILE THE RETURN OF INC OME WITHIN A PERIOD OF THREE DAYS FROM THE RECEIPT OF THE SAID LETTER. FURTHER, IT WAS INTIMATED BY THE A.O. TO THE ASSESSEE THAT THE REQUEST FOR PROVIDING REAS ONS FOR REOPENING THE ASSESSMENT WILL BE ENTERTAINED AND THE REASONS WILL BE COMMUNICATED ONLY AFTER THE FILING OF THE RETURN OF INCOME FOR THE AF ORESAID YEAR. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS NOT MADE ANY REQUES T FOR FURNISHING OF THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AF TER FILING THE RETURN OF INCOME WHICH IS A MANDATORY CONDITION AND THEREFORE THE ASSESSEE CANNOT TAKE A PLEA FOR QUASHING OF THE ASSESSMENT FOR NON- FURNISHING THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS MATERIAL PLACED ON RECORD. AT THE OUTSET, WE NOTE THAT AN IDENTICAL IS SUE HAS BEEN CONSIDERED AND DECIDED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL I N ASSESSEES OWN CASE FOR A.Y. 2008-09 VIDE ORDER DATED 25-3-2013 IN PARA 7 T O 17 ARE AS UNDER:- 8. THERE IS NO DISPUTE TO THE FACT THAT ASSESSEE FI LED ITS RETURN OF INCOME U/S.139 OF THE ACT ON 29.9.2008 DECLARING TOTAL INCOME OF R S.7,67,171. THE SAID RETURN WAS PROCESSED U/S.143(1) OF THE ACT ACCEPTING THE I NCOME RETURNED. IT IS OBSERVED THAT THERE WAS A SURVEY ACTION U/S.133A OF THE ACT ON THE ASSESSEES PREMISES AND ON THAT BASIS, THE AO ISSUED NOTICE U/ S.148 OF THE ACT DT.26.3.2010, ITA 901/M/13 4 WHICH WAS SERVED ON THE ASSESSEE ON 29.3.2010. ON P ERUSAL OF THE ORDER OF LD CIT(A), WE OBSERVE THAT THE AO RECORDED THE REASONS U/S.148(2) R.W.S 147 OF THE ACT BEFORE ISSUING NOTICE TO THE ASSESSEE U/S.148 O F THE ACT. WE OBSERVE FROM PAGE 33 OF PB THAT ASSESSEE VIDE ITS LETTER DATED 2 8.4.2010 ASKED THE AO TO FURNISH THE REASONS RECORDED FOR REOPENING OF ASSES SMENT. THE AO VIDE ITS LETTER DATED 29.4.2010, COPY PLACED AT PAGE 34 OF PB ASKED THE ASSESSEE TO FILE RETURN OF INCOME AND IN RESPECT OF REASONS STATED AS UNDER : AS REGARDS TO YOUR REQUEST FOR PROVIDING REASONS F OR REOPENING OF ASSESSMENTS, THE SAME WILL BE COMMUNICATED ONLY AFT ER FILING OF RETURNS OF INCOME FOR THE AFORESAID YEAR. 9. WE OBSERVE THAT ASSESSEE VIDE ITS LETTER DATED 7 .5.2010 STATED TO THE AO THAT THE RETURN FILED U/S.139 ON 29.9.2008 MAY PLEASED B E TREATED AS FILED U/S.148 OF THE ACT. THEREFORE, IT IS EVIDENT THAT ASSESSEE SUB MITTED THAT THE RETURN ORIGINALLY FILED U/S.139 OF THE ACT BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S.148 OF THE ACT. THERE IS NO DISPUTE TO THE FACT THAT AFTER FILING THE SAID LETTER DATED 7.5.2010, IT HAS TO BE CONSIDERED AS RETURN F ILED BY THE ASSESSEE IN RESPONSE TO ISSUE OF NOTICE U/S.148 OF THE ACT. HOWEVER, THE AO DID NOT FURNISH COPY OF REASONS RECORDED TO THE ASSESSEE. 10. THE HONBLE APEX COURT IN THE CASE OF GKN DRIV ESHAFTS (INDIA) LTD. V. INCOME-TAX OFFICER,259 ITR 19(SC) HAS HELD AS UNDER : WHEN A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961, IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICEE IS TO FILE THE RETURN AND, IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING THE NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHI N A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLED TO F ILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DIS POSE OF THE SAME BY PASSING A SPEAKING ORDER. 11. FOLLOWING THE SAID DECISION OF HONBLE APEX COU RT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. (SUPRA), ITAT HYDERABAD BE NCH IN THE CASE OF S.PRASAD RAJU VS DCIT, 96 TTJ 832 HAS HELD AS UNDER: REASONS FOR REOPENING OF ASSESSMENT HAVING BEEN NO T DISCLOSED BY THE DEPARTMENT DESPITE SPECIFIC REQUEST BY THE ASSESSEE , REOPENING WAS INVALID 12. THE HONBLE JURISDICTIONAL HIGH COURT (PANAJI B ENCH) IN THE CASE OF FOMENTO RESORTS AND HOTELS LTD (SUPRA) VIDE ITS ORD ER DATED 27.11.2006 HAS HELD THAT GIVING REASONS IN SUPPORT OF AN ORDER IS PART OF COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. SINCE THE REASONS WE RE NOT GIVEN BEFORE MAKING THE ASSESSMENT ORDER, THE HONBLE HIGH COURT CONFIRMED THE ORDER OF ITAT AND DISMISSED THE APPEAL FILED BY THE DEPARTMENT. WE OB SERVE THAT SIMILAR ISSUE ITA 901/M/13 5 CAME BEFORE THE ITAT IN THE CASE OF VIDESH SANCHAR NIGAM LTD (SUPRA) AND THE TRIBUNAL CONSIDERED THE FOLLOWING ISSUE BEFORE IT: WHETHER THE SUPPLY OF THE REASONS TO THE ASSESSEE BY THE ASSESSING OFFICER AFTER THE COMPLETION OF THE ASSESSMENT MAKE S THE ASSESSMENT BAD IN LAW, AS THE REASSESSMENT IS TO BE HELD AS INVALI D. 12.1 THE TRIBUNAL AFTER CONSIDERING THE DECISION O F HONBLE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD (SUPRA) AND VAR IOUS OTHER DECISIONS OF HONBLE HIGH COURTS AND ITAT HAS HELD VIDE PARAS 16 & 17 AS UNDER: 16. THUS IN VIEW OF THE ABOVE DISCUSSION AND IN VI EW OF THE BINDING PRECEDENTS, RESPECTFULLY APPLYING THESE PROPOSITION S TO THE FACTS OF THE CASE AND AS THE ASSESSING OFFICER HAS NOT FURNISHED THE REASONS TO THE ASSESSEE BEFORE CONCLUDING THE ASSESSMENT PROCEEDIN GS, MUCH LESS WITHIN THE REASONABLE PERIOD OF TIME AS MANDATED BY THE HONBLE SUPREME COURT WE HAVE NO OTHER ALTERNATIVE BUT TO H OLD THAT THE PROCEEDINGS ARE NULL AND VOID. 17. AS WE HAVE HELD THAT THE REOPENING IS BAD IN LAW FOR THE REASON OF NONFURNISHING OF REASO NS RECORDED, WE DO NOT GO INTO ALL OTHER ARGUMENTS RAISED IN THIS CASE ON THE ISSUE OF REOPENING AS THEY WOULD BE ACADEMIC IN NATURE. 13. WE OBSERVE THAT THE DEPARTMENT FILED APPEAL AGA INST THE SAID ORDER OF THE TRIBUNAL BEFORE THE HONBLE HIGH COURT AND HONBLE HIGH COURT VIDE ITS ORDER DATED 20.7.2011 REPORTED AT 340 ITR 66 (BOM) HAS CO NFIRMED THE ORDER OF THE TRIBUNAL AND DISMISSED THE APPEAL OF THE DEPARTMENT ON THE GROUND THAT REASONS RECORDED FOR REOPENING OF ASSESSMENT WERE NOT FURNI SHED TO THE ASSESSEE TILL THE COMPLETION OF ASSESSMENT, THE REASSESSMENT ORDER CA NNOT BE UPHELD. 14. SIMILAR ISSUE AGAIN CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN THE CASE OF TELCO DADAJEE DHACKJEE LIMITED (SUPRA) AND ON ACCOUNT OF DIFFERENCE OF OPINION BETWEEN THE MEMBERS OF DIVISION BENCH, ONE OF THE QUESTIONS REFERRED TO THE THIRD MEMBER WAS AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ORDER OF THE AO IS LIABLE TO BE QUASHED OR TO BE SET ASIDE W HERE COPY OF THE REASONS RECORDED FOR TAKING ACTION U/S.147 WERE NOT PROVIDED TO THE ASSESSEE IN SPITE OF SPECIFIC REQUESTS? 15. THE HONBLE THIRD MEMBER VIDE PARAS 2 TO 6 HAS HELD THAT SINCE THE AO DID NOT FURNISH THE REASONS RECORDED FOR REOPENING OF A SSESSMENT TO THE ASSESSEE DESPITE SPECIFIC REQUESTS, THE REASSESSMENT ORDER I S LIABLE TO BE QUASHED AS NULL AND VOID. WE CONSIDER IT PRUDENT TO REPRODUCE PARAS 2 TO 6 OF THE SAID ORDER OF THE THIRD MEMBER WHICH ARE AS UNDER: ITA 901/M/13 6 2. THE FACTS HAVE BEEN NARRATED IN CONSIDERABLE DE TAIL IN THE ORDERS OF THE LD MEMBERS AND I DO NOT PROPOSE TO REPEAT THEM EXCEPT WHERE IT IS ABSOLUTELY ESSENTIAL. IN MY OPINION, QUESTION NO.(I I) IS MORE FUNDAMENTAL TO THE DISPUTE BEFORE ME AND REQUIRES T O BE RESOLVED FIRST. THERE IS NO DISPUTE THAT THE COPY OF THE REASONS RE CORDED FOR ISSUING NOTICE UNDER SECTION 148 WERE NOT PROVIDED TO THE A SSESSEE DESPITE SPECIFIC REQUEST. IN THIS SITUATION, IT SEEMS TO ME THAT THE ONLY COURSE OPEN TO IS TO QUASH THE REASSESSMENT PROCEEDINGS. T HE CONTENTION OF THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE WAS THAT THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF G.K.DRIVESHAFTS (INDIA ) LTD. VS. ITO (2003) 259 ITR 19 (SC) ONLY LAYS DOWN A PROCEDURE O R A COURSE OF ACTION TO BE ADOPTED BY THE ASSESSING OFFICER AND I F THE REASONS FOR REOPENING THE ASSESSMENT ARE NOT SUPPLIED TO THE AS SESSEE DESPITE THE ASSESSEES REQUEST, THE ASSESSMENT ITSELF CANNOT BE QUASHED OR HELD AB INITIO VOID. HE INVITED MY ATTENTION TO THE FOLLOWI NG ORDERS / JUDGMENTS WHERE THIS POINT AROSE BUT DESPITE THE SAME THE REA SSESSMENTS ORDERS WERE MERELY SET ASIDE FOR BEING REDONE AFTER SUPPLY ING THE REASONS TO THE ASSESSEE: (1) DATAMATICS LTD. VS. ACIT (2008) 110 ITD 24 (MU M) (2) SMT KAMLESH SHARMA VS. ITO (2006) 287 ITR 337 (DEL) (3) AREVA T&D INDIA LTD. VS. ACIT (2007) 294 ITR 2 33 (MAD) (4) CIT VS. JAI PRAKASH SINGH (1996) 219 ITR 737 (S C) (5) ITO VS. SMT GURINDER KAUR (2006) 102 ITD 189 (DEL) (6) S NARAYA NAPPA & ORS VS. CIT (1967) 63 ITR 219 (SC) 3. THE LEARNED COUNSEL F OR THE ASSESSEE STRONGLY RELIED ON THE JUDGMENT OF THE HONBLE BOMB AY HIGH COURT IN CIT VS. FOMENTO RESORTS AND HOTELS LTD. IN TAX APPE AL NO.71 OF 2006 DATED 27.11.2006 (COPY FILED), IN WHICH IT WAS HELD THAT GIVING OF REASONS MUST BE CONSIDERED AS IMPLICIT IN SECTION 11 OF THE EXPENDITURE TAX ACT, 1987 AND IF IT IS NOT DONE AND THE RULES OF NATURAL JUSTICE ARE VIOLATED, THE ASSESSMENT MUST BE QUASHED, MY ATTENTION WAS ALSO D RAWN TO THE ORDER OF THE TRIBUNAL IN THE AFORESAID CASE IN ETA NO: 1 & 5/PN/2001 DATED 04.04.2006. IT WAS ALSO SUBMITTED THAT THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT (PANAJI BENCH) HAS BEEN CONFIRMED BY THE SUPREME COURT BY DISMISSING THE SPECIAL LEAVE PETITION FILE D BY THE CIT BY ORDER DATED 16.07.2007. THE COPY OF THE ORDER OF THE SUPR EME COURT HAS ALSO BEEN FILED. THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT (SUPRA) WAS SOUGHT TO BE DISTINGUISHED BY THE LEARNED SENIO R DR BY SUBMITTING THAT IT WAS RENDERED UNDER A DIFFERENT ENACTMENT WH ICH DID NOT PROVIDE FOR FURNISHING OF REASONS FOR REOPENING THE ASSESSM ENT TO THE ASSESSEE AND SINCE THE BOMBAY HIGH COURT HAS REFERRED TO FUR NISHING OF REASONS FOR PASSING AN ORDER, IT IS DISTINGUISHABLE ALSO ON THE GROUND THAT SECTION 148 NOTICE IS NOT AN ORDER AND FAILURE TO FURNISH R EASONS RECORDED FOR ITA 901/M/13 7 ISSUE OF A NOTICE UNDER SECTION 148 OF THE INCOME T AX ACT IS NOT FATAL TO THE VALIDITY OF THE REOPENING. 4. I HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSIO NS. IT IS TRUE THAT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD (SUPRA) THE SUPREME COURT HAS NOT HELD THAT THAT NON-FURNISHING OF THE REASONS FO R REOPENING THE ASSESSMENT AFFECTS THE VALIDITY OF THE NOTICE UNDER SECTION 148 AND WHAT HAS BEEN HELD THEREIN IS THAT IN SUCH A CASE THE RE ASSESSMENT ORDER SHOULD BE SET ASIDE AND THE PROCEEDINGS SHOULD BE RESTORED TO THE ASSESSING OFFICER WITH A DIRECTION TO HIM TO FURNISH THE REAS ONS TO THE ASSESSEE, HEAR THE ASSESSEES OBJECTIONS AND PASS AN ORDER ON THE OBJECTIONS AND THEN PROCEED TO COMPLETE THE REASSESSMENT ORDER. HO WEVER, IN THE CASE OF FOMENTO RESORTS AND HOTELS LTD., WHICH AROSE UND ER THE EXPENDITURE TAX ACT, THE TRIBUNAL HELD THAT IF THE REASONS FOR REOPENING THE EXPENDITURE TAX ASSESSMENT UNDER SECTION 11 OF THE EXPENDITURE TAX ACT ARE NOT FURNISHED, THE REASSESSMENT IS WITHOUT JURI SDICTION AND IS LIABLE TO BE QUASHED. IN THIS ORDER THE TRIBUNAL HAS REFERRED TO THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA ) LTD. (SUPRA) AND ALSO TO THE JUDGMENT OF THE HONBLE BOMBAY HIGH COU RT IN THE CASE OF DEVJI RAVJI PATEL VS. BALASUBRAMANIAM AND OTHERS (1 994) 210 1TR 925 (BOM). SECTION 11 OF THE EXPENDITURE TAX ACT PROVID ES FOR CHARGEABLE EXPENDITURE ESCAPING ASSESSMENT. IT DOES NOT EXPRES SLY PROVIDE FOR RECORDING OF REASONS BEFORE ISSUING THE NOTICE OF R EASSESSMENT. SECTION 148(2) OF THE INCOME TAX ACT EXPRESSLY STATES THAT BEFORE ISSUING A NOTICE OF REASSESSMENT THE ASSESSING OFFICER SHALL RECORD HIS REASONS FOR DOING SO. I DO NOT THINK THAT THERE IS ANY MATERIAL DIFFERENCE BETWEEN THE TWO PROVISIONS BECAUSE IT HAS BEEN HELD BY THE PANA JI BENCH OF THE HONBLE BOMBAY HIGH COURT IN THE JUDGMENT CITED SUP RA THAT GIVING OF REASONS IN SUPPORT OF AN ORDER IS PART OF COMPLYING WITH THE RULES OF NATURAL JUSTICE AND, THEREFORE, NO FAULT CAN BE FOU ND WITH THE ORDER OF THE TRIBUNAL HOLDING THAT THE NOTICE ISSUED UNDER SECTI ON 11 OF THE EXPENDITURE TAX ACT WITHOUT RECORDING REASONS IS IN VALID. SECTION 148(2) OF THE INCOME TAX ACT ONLY MAKES IT EXPLICIT WHAT WAS ALREADY IMPLICIT IN THE SECTION. THE JUDGMENT OF THE HONBL E BOMBAY HIGH COURT HAS BECOME FINAL, THE SUPREME COURT HAVING DISMISSE D THE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AGAINST THE SAME. IN ADDITION TO THE ABOVE, A DIVISION BENCH OF THE TRIBUNAL IN MUMB AI HAS HELD IN ITS ORDER DATED 30.10.2009 IN ITA NO: 7626/MUM/2004 IN THE CASE OF VIDESH SANCHAR NIGAM LTD. VS. JCIT, THAT IF THE ASS ESSING OFFICER HAS NOT FURNISHED THE REASONS FOR REOPENING THE ASSESSM ENT UNDER SECTION 148, THE ENTIRE PROCEEDINGS ARE NULL AND VOID. IN C OMING TO THIS CONCLUSION THE TRIBUNAL HAS REFERRED TO THE JUDGMEN T OF THE PANAJI BENCH OF THE BOMBAY HIGH COURT IN CIT VS. FOMENTO RESORTS AND HOTELS LTD. (SUPRA) IN PARAGRAPH 14.9 OF ITS ORDER. IN THIS ORD ER THE TRIBUNAL HAS ALSO REFERRED TO THE ORDER OF THE DELHI BENCH OF THE TRI BUNAL IN THE CASE OF ITA 901/M/13 8 ITO VS. SMT GURINDER KAUR (SUPRA) CITED BY THE LEAR NED SENIOR DR BEFORE ME AND HAS POINTED OUT THAT THE ORDER OF THE DELHI BENCH OF THE TRIBUNAL IS NOT IN CONSONANCE WITH THE VIEW TAKEN B Y THE DELHI HIGH COURT IN THE CASE OF NEW BANK OF INDIA LTD. VS. ITO (1982) 136 ITR 679 (DEL). THERE IS THUS AN ORDER OF A DIVISION BENCH O F THE TRIBUNAL IN MUMBAI WHICH SUPPORTS THE ASSESSEES CONTENTION THA T IF THE REASONS FOR REOPENING THE ASSESSMENT ARE NOT FURNISHED TO THE A SSESSEE, THAT IS FATAL TO THE VALIDITY OF NOTICE OF REOPENING ISSUED UNDER SE CTION 148 OF THE INCOME TAX ACT. 5 THE LEARNED SENIOR DR DREW MY ATTENTION TO TWO JU DGMENTS OF THE HONBLE BOMBAY HIGH COURT BEING (A) ALLANA COLD STO RAGE LTD. VS. ITO (2006) 287 ITR 1 (BOM); AND (B) AJANTA PHARMA LTD. VS. ACIT (2007) 295 ITR 218 (BOM). L HAVE RESPECTFULLY GONE THROUGH THESE TWO JUDGMENTS. IN THE CASE OF AJANTA PHARMA LTD. (SUPRA ), THE FACTS SHOW THAT THE REASONS FOR REOPENING THE ASSESSMENT WERE SUPPL IED TO THE ASSESSEE BUT THE ASSESSEES OBJECTIONS WERE NOT PROPERLY CON SIDERED BY THE ASSESSING OFFICER. THE HONBLE HIGH COURT, THEREFOR E, SET ASIDE THE REASSESSMENT PROCEEDINGS AND DIRECTED THE ASSESSING OFFICER TO DISPOSE OFF THE OBJECTIONS OF THE ASSESSEE BY FOLLOWING THE DUE PROCEDURE OF LAW IN CONFORMITY WITH THE JUDGMENT OF THE SUPREME COUR T IN THE CASE OF GKN DRIVESHAFTS (INDIA LTD (SUPRA). IN THE CASE OF ALLANA COLD STORAGE LTD (SUPRA) ALSO, AS PARAGRAPH 3 OF THE JUDGMENT WO ULD SHOW, THE REASONS FOR REOPENING THE THE ASSESSMENT WERE SUPPLIED TO T HE ASSESSEE BUT ONLY ON 21.03.2006 WHEN THE ASSESSMENT WAS ABOUT TO GET BARRED BY TIME. THE ASSESSEE FILED THEIR OBJECTIONS TO THE REASONS ON 2 3.03.2006 AND REQUESTED FOR PERSONAL HEARING. BUT THE ASSESSING O FFICER STRAIGHTAWAY PASSED THE REASSESSMENT ORDER INCLUDING THE DECISIO N ON THE OBJECTIONS FILED BY THE ASSESSEE. THUS BOTH THE CASES CITED BY THE LEARNED SENIOR DR ARE CASES RECORDED FOR REOPENING THE ASSESSMENT WER E NEVER SUPPLIED TO THE ASSESSEE. THE FACTS BEING DIFFERENT, THE CITED JUDGMENTS ARE NOT. APPLICABLE. 6. IN THE LIGHT OF THE BINDING JUDGMENT OF THE PANA JI BENCH OF THE HONBLE BOMBAY HIGH COURT (SUPRA) AND THE ORDER OF THE TRIBUNAL IN THE CASE OF VIDESH SANCHAR NIGAM LTD. (SUPRA) AND RESPE CTFULLY FOLLOWING THE SAME, I HOLD THAT SINCE THE ASSESSING OFFICER D ID NOT FURNISH THE REASONS RECORDED FOR REOPENING THE ASSESSMENT TO TH E ASSESSEE DESPITE SPECIFIC REQUEST, THE REASSESSMENT ORDER IS LIABLE TO BE QUASHED AS NULL AND VOID. THE POINT OF DIFFERENCE NO: II) IS ANSWER ED ACCORDINGLY. 16. WE OBSERVE THAT THE TRIBUNAL BY ITS ORDER DATED 29.6.2010 GAVE EFFECT TO THE ORDER OF THIRD MEMBER AND IN ACCORDANCE WITH THE MA JORITY VIEW, HELD THAT ASSESSMENT ORDER PASSED BY THE AO IS ILLEGAL AND VO ID AB NITIO. THEREFORE, THE ASSESSMENT WAS QUASHED. ITA 901/M/13 9 17. IN THE CASE BEFORE US, AS MENTIONED HEREINABOVE , WE OBSERVE THAT ASSESSEE VIDE ITS LETTER DATED 28.4.2010 MADE A SPECIFIC REQ UEST TO THE AO TO FURNISH REASONS RECORDED FOR REOPENING OF ASSESSMENT. WE OB SERVE THAT AO VIDE HIS LETTER DATED 29.4.2010 ASKED THE ASSESSEE TO FURNIS H RETURN OF INCOME AND THEREAFTER REASONS FOR REOPENING OF ASSESSMENT WILL BE COMMUNICATED TO THE ASSESSEE. WE OBSERVE THAT THE AO DID NOT FURNISH TH E COPY OF THE REASONS RECORDED TILL COMPLETION OF ASSESSMENT MADE ON 30.1 2.2010. WE OBSERVE THAT ASSESSEE ALSO TOOK A GROUND BEFORE LD CIT(A) DISPUT ING THE VALIDITY OF ASSESSMENT ORDER ON THE GROUND OF NON-FURNISHING OF REASONS RECORDED BY THE AO, BUT LD CIT(A) IN THE IMPUGNED ORDER STATED THE REASONS RECORDED BY THE AO. HE HAS NOT DISPUTED THE FACT THAT NO COPY OF TH E REASONS RECORDED WERE FURNISHED TO THE ASSESSEE, WHICH IS NECESSARY BEFOR E THE ASSESSMENT IS COMPLETED. WE HOLD THAT IN VIEW OF THE DECISION OF THE TRIBUNAL IN THE CASE OF TELCO DADAJEE DHACKJEE LIMITED (SUPRA) AND THE DECI SIONS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF FOMENTO RE SORTS AND HOTELS LTD (SUPRA) AND FOLLOWED IN THE CASE OF VIDESH SANCHAR NIGAM LT D., (SUPRA), THE REASSESSMENT ORDER PASSED BY THE AO U/S.143(3) R.W. S 147 OF THE ACT DATED 30.12.2010 IS BAD IN LAW AS THE AO HAD NOT FURNISHE D COPY OF THE REASONS RECORDED DESPITE SPECIFIC REQUEST MADE BY THE ASSES SEE BEFORE HE COMPLETED THE ASSESSMENT. HENCE, THE ASSESSMENT ORDER IS QUASHED AS NULL AND VOID BY ALLOWING GROUND NOS.6 & 7 OF APPEAL TAKEN BY ASSESS EE. 7. WE FIND THAT THERE IS NO CHANGE OF FACTS AND CIR CUMSTANCES FOR THE YEAR UNDER CONSIDERATION AND RATHER THE FACTS RELEVANT T O THE ISSUE ARE IDENTICAL FOR BOTH THE YEARS. ACCORDINGLY, RESPECTFULLY FOLLOWING THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, THE REASSESSMENT ORDER PASS ED U/S 143(3) R.W.S. 147 OF THE ACT IS QUASHED AS NOT VALID. 8. SINCE THE REASSESSMENT IS QUASHED, THEREFORE, TH E OTHER ISSUES BECOME INFRUCTUOUS AND NEED NO ADJUDICATION. ITA 901/M/13 10 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE,, 2015. !' # $% &! ' 10-06-2015 . ( ) SD/- SD/- (D. KARUNAKARA RAO) (VIJAY PAL RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER $ 4 MUMBAI ; &! DATED 10-06-2015 [ .5../ R.K R.KR.K R.K. , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 6 () / THE CIT(A) 34, MUMBAI 4. 6 / CIT- -24 MUMBAI 5. 9:( 55;< , ;< , $ 4 / DR, ITAT, MUMBAI E BENCH 6. (>? @ / GUARD FILE. ' / BY ORDER, 9 5 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 4 / ITAT, MUMBAI