MINIMEX MARKETING PVT. LTD., RAIPUR,RAIPUR V. INCOME TAX OFFICER-3(1), RAIPUR, RAIPUR

ITA 200/RPR/2024

AI Insights

The case involves Minimex Marketing Private Limited, which appealed against the order of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center, Delhi. The appeal was directed against the reassessment order for the assessment year 2012-13, where the Assessing Officer had added Rs. 25,00,000 as unexplained cash credit under section 68 of the Income-tax Act, 1961. The Tribunal examined whether the reassessment was validly initiated and whether the assessee was provided adequate opportunity to contest the reassessment. The Tribunal found procedural lapses in the reassessment process, particularly the non-provision of 'reasons to believe' for reopening the assessment, leading to the quashing of the reassessment order.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35802 (ITAT-RAIPUR)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-11-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 10-05-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: R.B DOSHI
• Keywords: Reassessment proceedings; Question of law; Unexplained cash credit; Reopening of assessment; Principle of natural justice; Search and seizure; Accommodation entries; Source of fund; Assessment record; Reason to believe
• Section: 148; 143(3); 64; 48; 68; 208; 22; 133(6)

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No.200/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2012-13 Minimex Marketing Private Limited Behind Pilli Building, Fafadih, Raipur- (C.G.)-492 009 PAN: AAFCM6535Q .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer-3(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri R.B Doshi, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 28.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 04.12.2024 2 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee company is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 15.03.2024, which in turn arises from the order passed by the A.O under Sec. 143(3) r.w.s. 147 of the Income-tax Act, 1961 (in short ‘the Act’) dated 31.12.2018 for the assessment year 2012-13. The assessee company has assailed the impugned order on the following grounds of appeal: “1. In the facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming addition of Rs.25,00,000/-made by AO on account of share application money/share premium received by the appellant invoking sec. 68. Addition made by AO and confirmed by Ld. CIT(A) is arbitrary, baseless and not justified. 2. The reassessment order passed by AO and confirmed by Ld. CIT(A) is illegal, ab initio void inasmuch as no valid notice u/s 148 was served as per provisions of sec. 282. 3. The re-assessment order passed by AO and confirmed by Ld. CIT(A) is illegal inasmuch as the AO completed assessment without providing copy of reasons recorded for re-opening. The assessment order is liable to be quashed. 4 Without prejudice to above grounds, the reassessment order passed by AO and confirmed by Ld. CIT(A) is illegal inasmuch as the same is passed without providing due and proper opportunity of hearing to the appellant and without following the principles of natural justice. 5. The appellant reserves the right to amend, modify or add any of the grounds of appeal.” 3 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 2. Succinctly stated, the assessee company which is engaged in the business of trading of electrical, instrumentation & automation spares and accessories, had e-filed its return of income for A.Y.2012-13 on 29.08.2012, declaring an income of Rs.49,170/-. Subsequently, the A.O based on information that the assessee had taken accommodation entry from Kolkata based shell companies, viz. (i) Rimjhim Sales Agency: Rs.10,00,000/-; (ii) Muskan Distributors Pvt. Ltd.: Rs.10,00,000/-; and (iii) Shubh Labh Prints Pvt. Ltd.: Rs.5,00,000/-, initiated proceedings u/s. 147 of the Act. Notice u/s. 148 of the Act, dated 27.03.2018 was issued by the A.O. 3. During the course of the assessment proceedings, the A.O observed that the assessee company had during the year under consideration received share capital/premium of Rs.25,00,000/- from the following three parties/concerns: Name of the person/concern from whom fund was received Date Amount (in Rs.) Rimjhim Sales Agency 19.03.2012 10,00,000/- Muskan Distributors Pvt. Ltd. 20.03.2012 10,00,000/- Shubh Labh Prints Pvt. Ltd. 23.03.2012 5,00,000 4 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 As the assessee company could not substantiate the authenticity of its claim of having received genuine share capital/premium from the aforesaid investor companies to the satisfaction of the A.O, therefore, the latter vide his order passed u/s.143(3) r.w.s. 147 of the Act, dated 31.12.2018 determined its income at Rs.25,49,170/-. 4. Aggrieved, the assessee company carried the matter in appeal before the CIT(Appeals), but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “6. DECISION: 6.1. Ground No.1 relate to making an addition of Rs. 25,00,000/- as unexplained money in the form of cash credits. The AO stated that the appellant was a beneficiary of accommodation entry in the form of share capital and premium. The AO held that the above share capital and premium is nothing but appellant's own money routed through the entry operators and brought back as share capital and premium. Therefore, the above share capital and premium was treated as unexplained money in the form of unexplained cash credits by the AO. 6.1.1 The appellant submitted that it had filed documents of audit report of AY 2012-13, extracts of bank statement, ITR of AY 2012- 13, acknowledgement of AY 2012-13 and company master data in respect of three entities from whom share capital and premium was received. The appellant itself accepted that master data of Subh Labh Prints P.Ltd was not submitted before the AO. The appellant submitted that it had furnished details of investors, full postal address, ITR and Bank statement before the AO. Thus, identity was Total 25,00,000/- 5 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 established. The appellant also submitted that the money was received from the three entities through banking channel and therefore, genuineness of the transaction is established and also submitted that the investors are assessed to tax and thus their creditworthiness is also established. In view of the above, the appellant stated that the burden cast u/s.68 of the Act was discharged by it. The appellant also placed reliance on various decisions, which have been brought out supra. The appellant requested to delete the addition made by the AO. 6.1.2 I have gone through the addition made by the AO and the submissions of the appellant. It is seen that the AO got specific information in possession that during the FY 2011-12 relevant to AY 2012-13, the appellant had obtained accommodation entry from Kolkata based shell company. The appellant had received share capital and premium from (a) Rimjhim Sales Agency Pvt.Ltd 1000 shares for Rs. 10,00,000/-, (b) Muskan Distributors Pvt.Ltd-1000 shares for Rs. 10,00,000/- and (c) Shubh Labh Prints Pvt Ltd 500 shares for Rs.5,00,000/-. It is seen from the assessment order and submissions of the appellant that the appellant filed documents in respect of two entities i.e. Rimjnim Sales Agency Pvt.Ltd ano ivuskan Distributors Pvt.Ltd during the course of scrutiny proceedings. The details of Shubh Labh Prints Pvt.Ltd was furnished during the course of appeal proceedings but not produced before the AO. The AO made detailed enquiries with regard to modus operandi of the entry operators, routing of cash through banks etc in the assessment order. It is also seen that the AO issued notices u/s 133(6) of the Act, dated 11.12.2018, which were returned back by the postal authorities with remarks 'not known'. The AO also deputed his Inspector to inquire the whereabouts of these concerns but he also reported that none of them exists on real sense at the addresses given in their bank accounts and their returns of income. Further it is seen from the assessment order that the incomes declared by the above three entities who have invested in the appellant's company were found to be either Nil income or declared loss for the AYs 2011-12 and 2012-13. 6.1.2.1 It is also noticed that a search and seizure action u/s132 of the Act was conducted at Raipur in Singhal Group of Companies on 31.08.2017 and consequential survey action was also conducted at Kolkata and statement of Shri Vinod Kumar Jajoo, Kolkata was 6 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 recorded by the ADIT(Inv), Raipur on 05.10.2017. Shri Vinod Kumar Jajoo was also summoned by the DDIT(Inv), Unit-1(3), Kolkata and his statement was again recorded on 29.1.2017. In the statement, Mr. Vinod Kumar Jajoo accepted that he was controlling a number of companies, their dummy directors and bank accounts to provide accommodation entries to various beneficiaries companies in lieu of commission. The list of companies which Mr. Vinod Kumar Jajoo is controlled were mentioned in the assessment order. It is further seen that Mr. Vinod Kumar Jajoo identified the appellant M/s. Minimex Marketing Private Limited as one of the beneficiaries and he also identified the bank account No.397001010229494 maintained with Union Bank of India, 134/4, M.G.Road, Kolkata in the name of Muskan Distributors Pvt.Ltd through which the appellant had obtained accommodation entry of Rs.25 lakhs during FY 2011-12 relevant to AY 2012-13. The appellant also taken accommodation entries of Rs.10 lakhs and Rs.5 lakhs from Rimjhim Sales Agency Pvt.Ltd and Shubh Labh Prints Pvt. respectively in the form of share capital and premium. Their financials are also not sound to invest in the appellant's company with high premium, when their Incomes are minimal or loss. Mr. Vinod Kumar Jajoo before the Investigation Wing narrated the story of taking cash from beneficiaries i.e. appellant and then routed through identified bank accounts of his managed and operated concerns and ultimately gave accommodation entries to the appellant in the form of share capital and premium. Thus, it can be said that the investment made by the above three companies are dummies, which are managed and controlled by Mr. Vinod Kumar Jajoo and all the concerns are of no means. Further, the companies are not in existence, as the notices u/s. 133(5) of the Act issued by the A were retuned back as not known' and the AO independently got field enquiries conducted with respect to the identity and creditworthiness of the investor companies, and to examine the genuineness of the transaction. Enquiries made by the Inspector revealed that none of the companies exists on real sense. It is clear that the appellant failed to prove the identity, genuineness and creditworthiness of the above three entities who have invested in the appellant's company in the form of share capital and premium. 7 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 6.1.2.2 Reliance is placed on the decision of Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax (Central)-1 Vs. NRA Iron & Steel (P.) Ltd. [2019] 103 taxmann.com 48 (SC), wherein it was held that if the assessee is not provide a satisfactory explanation of the nature and source of the investments able to on made, then it is open to the revenue to hold that it is the income of the assessee, and there would be no further burden on the revenue to show that the income is from any particular source. In the instant case the appellant though filed documents like ITR, full address in support of its claim, subsequently, it was established that the companies which have invested in the appellant's company are dummies and are non-existent. So the onus is on the appellant to prove the credits in its books of account, which it has failed to discharge. Thus, the appellant had failed to discharge the onus by cogent evidence either of the credit worthiness of the so-called investor- companies, or genuineness of the transaction. 6.1.2.3 As per settled law, the initial onus is on the Appellant to establish by cogent evidence the genuineness of the transaction, and credit-worthiness of the investors under Section 68 of the Act. The appellant is expected to establish to the satisfaction of the Assessing Officer. CIT v. Precision Finance (P.) Ltd. [1995] 82 Taxman 31/[1994] 208 ITR 465 (Cal.):  Proof of Identity of the creditors;  Capacity of creditors to advance money, and  Genuineness of transaction 6.1.2.4 In the land mark decision of Hon'ble Supreme Court in the case of Kale Khan Mohammed Hanif Vs. CIT [1963] 50 ITR 1 (SC) and Roshan D Hatti Vs. CIT [1977] 107 ITR 938 (SC), the Hon'ble Supreme Court has laid down that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the Assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold that it is the income of the assessee, and 8 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 there would be no further burden on the revenue to show that the income is from any particular source. 6.1.2.5 In the instant case, the AO made an independent and detailed enquiry including deputing his Inspector to verify the creditworthiness of the parties, the source of funds invested and the genuineness of the transactions. The field report revealed that the three entities were non- existent. Thus, the appellant failed to discharge its onus of proving the credits in the form of share capital and premium from the above three entities in its books of account. Considering the facts and circumstances of the case and following the decisions cited supra the action of the AO in treating the entire share capital and premium of Rs.25 lakhs as unexplained cash credit is upheld and Ground No. 1 is dismissed. 6.2. Ground Nos 2, 3 & 4 relate to service of notice u/s. 148 of the Act, assessment completed without providing copy of reasons recorded for re-opening and order passed without affording due and proper opportunity of hearing. I have gone through the order of the Assessing Officer and the submissions of the appellant. It is seen from the assessment order that the AO issued notice u/s.148 of the Act dated 27.03.2018 after obtaining necessary approval from the Pr.CIT-1, Raipur. The appellant in response to notice u/s 148 of the Act filed a letter dated 17.04.2018. The contents of the letter dated 17.04.2018 was reproduced by the AO in the assessment order, for the sake of convenience again reproduced below: respected sir. pl. clarify the meaning of \"a return in the prescribed for the assessment year 2012-13” as mentioned in the notice no. itba/ast/s/148/2017-18/1009474084(1) dated 27/03/2018. yours faithfully bhavesh h shah director mobile [phone] Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 6.2.1 This itself proves that the appellant was in knowledge of receipt of notice u/s, 148 of the Act issued by the AU. With regard to copy of reasons recorded to re- opening, it is seen from the assessment order that the appellant though acknowledged the notice u/s.148 of the Act, has failed to respond to the notice u/s. 148 of the Act and to the subsequent notices issued by the AO and never raised the issue of copy of reasons recorded for re-opening of assessment during scrutiny proceedings before the AO. With regard to affording due and proper opportunity of hearing, it is seen from the assessment order that the AO has given ample opportunities to the appellant to file its submissions. However, the appellant failed to utilize the opportunities given by the AO. The appellant responded to the notice issued on 03.12.2018 to comply by 07.12.2018. The appellant responded to this notice on 18.12.2018 i.e. at the fag end of the time barring date i.e. 31.12.2018. The issues raised by the appellant on the above are afterthought and misconception. Hence, grounds raised in this regard are dismissed. 7. Ground No.5 is general and routine. 8. In the result, the appeal is dismissed.” 5. The assessee company, being aggrieved with the order of the CIT(Appeals), has carried the matter in appeal before the Tribunal. 6. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 7. Shri R.B. Doshi, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold of hearing of the appeal has assailed the validity of the jurisdiction that was assumed by the A.O for framing of the assessment vide his order passed u/s. 143(3) r.w.s. 147 of the Act, dated 10 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 31.12.2018. Elaborating on his contention, the Ld. AR submitted that as the A.O despite specific request made by the assessee after effective compliance of the notice u/s. 148 of the Act had failed to make available a copy of the “reasons to believe”, based on which, proceedings u/s. 147 of the Act were initiated in his case, therefore, the assessment so framed by him is liable to be struck down on the said count itself. The Ld. AR had drawn my attention to the letter dated 18.12.2018 that was filed by the assessee company with the A.O, Page 54 of APB wherein it had specifically requested for making available a copy of the “reasons to believe”. For the sake of clarity, the contents of the aforesaid letter dated 18.12.2018 is culled out as under: 11 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 8. The Ld. AR, to support his aforesaid contention, that in a case where the assessee who had though complied with the notice u/s. 148 of the Act was thereafter despite specific request not been provided a copy of the “reasons to believe” based on which the proceedings u/s. 147 of the Act were initiated, then the assessment so framed cannot be sustained and was liable to be struck down on the said count itself had relied on the order of the ITAT, Raipur in the case of Anupriya Narang, L/h. Late Brij Mohan Narang, ITA No.166/RPR/2019, dated 30.11.2022, Page No. 273 to 284 of APB. 9. Per contra, Dr. Priyanka Patel, Ld. Sr. DR relied on the orders of the lower authorities. 10. As the Ld. AR has assailed the validity of the jurisdiction that was assumed by the A.O for framing of the assessment without making available a copy of the “reasons to believe”, which admittedly formed the very foundation qua the aforesaid proceedings, therefore, the Ld. Sr. DR was directed to produce the assessment record and obtain a report of the A.O on the aforesaid aspect. As per the direction of the Tribunal, the Ld. Sr. DR had placed on record two reports of the A.O, i.e. ITO-3(1), Raipur dated 30.09.2024 & 27.11.2024. The A.O in his report dated 27.11.2024 had referred to the contents of his earlier report dated 30.09.2024. I find on a careful perusal of the report dated 30.09.2024, that the A.O had 12 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 stated that on going through the records no such communication was found available regarding the details of providing the copy of reasons recorded as well as the information based upon which the case was reopened. For the sake of clarity, the report of the A.O dated 30.09.2024 is culled out as under: 13 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 14 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 15 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 11. I have given thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both the parties qua the issue involved in the present appeal i.e. the validity of the jurisdiction that was assumed by the A.O for framing the assessment without making available a copy of “reasons to believe”, based on which, the proceedings u/s. 147 of the Act were initiated against the assessee company u/s. 147 of the Act. At this stage, I find that the issue involved in the present appeal is squarely covered by the order of the ITAT, Raipur in the case of DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal, ITA No.323/RPR/2024, dated 01.10.2024, wherein the Tribunal had held as under: “17. I have given a thoughtful consideration to the observation of the CIT(Appeals), who had upheld the validity of the jurisdiction that was assumed by the A.O for framing the assessment vide order passed u/s. 147 r.w.s. 143(3) of the Act, dated 22.12.2018, despite the failure on the part of the A.O to make available a copy of the “reasons to believe” to the assessee who had in the course of the assessment proceedings specifically requested for the same. Apropos the CIT(Appeals)’s observation that no failure could be attributed to the A.O for making available copy of the “reasons to believe” to the assessee for the reason that the latter had requested the same after 6 months from the date of issuance of notice u/s. 148 of the Act, dated 26.03.2018, I am unable to concur with the same. 18. At the threshold, I may herein observe that though the assessee had after filing his return of income in compliance to the notice u/s. 148 of the Act on 25.04.2018 applied for a copy of “reasons to believe” on 11.10.2018, but considering the fact that the A.O had framed the assessment vide his order u/s. 143(3) r.w.s. 147 of the Act, dated 22.12.2018 i.e. after lapse of a period more than 2 months from the date, on which, the assessee had made the aforesaid request, there was no justifiable reason for the A.O in not providing a copy of the same to the assessee. 16 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 19. As regards the CIT(Appeals)’s observation that nothing could be gathered from the record as to whether or not the A.O had replied to the assessee’s letter dated 11.10.2018, it would be relevant to point out that the A.O i.e. DCIT-1(1), Raipur had filed before me (through the Ld. DR) an email/letter wherein, he had confirmed that the assessee in the course of the assessment proceedings, had vide his aforesaid letter requested for a copy of the “reasons to believe”. Ostensibly, there is nothing discernible from the record which would reveal that a copy of the “reasons to believe” was made available by the A.O to the assessee before culmination of the assessment proceedings. Rather, the assessee had filed before me an “affidavit”, dated 03.09.2024, wherein he had deposed that despite the fact that he had in the course of the assessment proceedings after filing his return of income in response to notice u/s. 148 of the Act on 25.04.2018, therein, vide letter dated 11.10.2018 had specifically requested for a copy of “reasons to believe” but the same were not made available to him, and the assessment order was passed on 22.12.2018. Apart from that, the assessee had deposed that it was only thereafter, pursuant to his letter dated 26.08.2024, i.e. in the course of the present proceedings before the Tribunal, that the A.O had made available a copy of the “reasons to believe” on 27.08.2024. I, thus, based on my aforesaid observations am of the view that the failure on the part of the A.O to make available a copy of the “reasons to believe” to the assessee in the course of the assessment proceedings can safely be gathered based on the aforesaid facts. In fact, the A.O/Ld. DR had not led any material/evidence to dislodge the aforesaid claim of the assessee. 20. As regards the observation of the CIT(Appeals) that as not only the A.O in his notices/SCNs discussed the reasons, based on which, the case of the assessee was reopened u/s. 147 of the Act, but also, as the assessee in his letter dated 11.10.2018 (supra) had discussed the same, therefore, the assessee cannot claim that he had remained unaware/oblivion as to why his case was reopened, I am unable to persuade myself to subscribe to the same. I am of a firm conviction that the failure on the part of the A.O to make available a copy of the “reasons to believe”, which formed the basis for reopening of the assessee’s concluded assessment goes to the very root of the validity of the jurisdiction assumed by the A.O for framing the impugned assessment. The Hon’ble Apex Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO & Ors. (2003) 259 ITR 19 (SC), had observed that the assessee after obtaining a copy of the “reasons to believe” is vested with a statutory right to file his objections before the A.O, which the latter is required to dispose off on the basis of a speaking order. As in the case before me there has been a complete violation of the applicable principle of law by the A.O, 17 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 who had despite a specific request by the assessee failed to communicate to him the “reasons to believe” that had formed the very basis for reopening of his concluded assessment u/s.147 of the Act. As stated by the Ld. AR, and rightly so, the assessee had remained divested of his statutory right of raising objection to the very basis on which his case was reopened u/s.147 of the Act. In my view, the failure of the A.O to make available a copy of the “reasons to believe” to the assessee, who had specifically requested for the same after filing his return of income in response to notice u/s.148 of the Act is nothing short of a brazen violation of the governing principles of law. Accordingly, I am unable to concur with the CIT(Appeals) that as the assessee was well conversant with the reason as to why his case was reopened u/s. 147 of the Act, therefore, he could not thereafter carry a grievance that the A.O had failed in his statutory duty to make available a copy of the “reasons to believe”, based on which, proceedings u/s. 147 of the Act were initiated in his case. I am of the view that the CIT(Appeals) had absolutely lost sight of the fact that the assessee could have raised an objection to the reopening of his case only if a copy of the “reasons to believe” would have been made available to him. Also, in case the order passed by the A.O disposing off the objections raised by the assessee were not to be accepted by the latter, then he was vested with a statutory right to carry the matter by filing a writ petition before the Hon’ble High Court. The assessee could have exercised his aforesaid statutory right only if a a copy of the “reasons to believe” would have been supplied to him, and could not have proceeded with on the basis of his knowledge about the same. 21. I am of a firm conviction that the failure on the part of the A.O to make available copy of the “reasons to believe” to the assessee who after complying with the notice u/s. 148 of the Act had specifically requested for the same, therein goes to the very root of the validity of the jurisdiction assumed by the A.O for framing the impugned assessment u/s. 143(3) r.w.s. 147 of the Act, dated 22.12.2018. 22. I find that the Hon’ble High Court of Bombay in the case of CIT Vs. Trends Electronics (2015) 379 ITR 456 (Bom.), had observed that where reasons for reopening of the assessment were not furnished to the assessee despite the same were sought for by the latter, the reassessment order being bad in law was liable to be quashed. For the sake of clarity, the observations of the Hon’ble High Court are culled out as under: “8. We find that the impugned order merely applies the decision of the Apex Court in GNK Driveshafts (India, Ltd. (supra). Further it also follows the decision of this Court in Videsh 18 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 Sanchanr Nigam Ltd. (supra) in holding that an order passed in reassessment proceedings are bad in law in the absence of reasons recorded for issuing reopening notice under Section 148 of the Act being furnished to the assessee when sought for. It is axiomatic that power to reopen a completed assessment under the Act is an exceptional power and whenever revenue seeks to exercise such power, they must strictly comply with the prerequisite conditions viz. Reopening of reasons to indicate that the Assessing Officer had reason to believe that income chargeable to tax has escaped assessment which would warrant the reopening of an assessment. These recorded reasons as laid down by the Apex Court ,must be furnished to the assessee when sought for so as to enable the assessee to object to the same before the Assessing Officer. Thus in the absence of reasons being furnished, when sought for would make an order passed on reassessment bad in law. The recording of reasons (which has been done in this case) and furnishing of the same has to be strictly complied with as it is a jurisdictional issue. This requirement is very salutary as it not only ensures reopening notices are not lightly issued. Besides in case the same have been issued on some misunderstanding/misconception, the assessee is given an opportunity to point out that the reasons to believe as recorded in the reasons do not warrant reopening before the reassessment proceedings are commenced. The Assessing Officer disposes of these objections and if satisfied with the objections, then the impugned reopening notice under Section 148 of the Act is dropped/withdrawn otherwise it is proceeded with further. In issues such as this, i.e. where jurisdictional issue is involved the same must be strictly complied with by the authority concerned and no question of knowledge being attributed on the basis of implication can arise. We also do not appreciate the stand of the revenue, that the respondent- assessee had asked for reasons recorded only once and therefore, seeking to justify non-furnishing of reasons. We expect the state to act more responsibly. 9. In view of the fact that the order of the Tribunal has only applied the settled position of law in allowing the respondent- assesse’s appeal. No substantial question of law arises for our consideration.” Further, I find that the Hon’ble High Court of Bombay earlier in the case of CIT Vs. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (Bom.) had approved the view taken by the Tribunal wherein the latter had followed its earlier judgment in the case of CIT Vs. Fomento Resorts & Hotels Ltd. ITA No.71 of 2006, dated 27.11.2006, and, had inter alia, held that where the 19 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 reasons recorded for reopening of the assessment were not furnished to the assessee till completion of the assessment, the reassessment order could not be upheld. The Hon’ble High Court while concluding as herein above, had observed that the Special Leave Petition (SLP) that was filed by the revenue against its order in the case of CIT Vs. Fomento Resorts & Hotels Ltd. (supra) was dismissed by the Hon’ble Apex Court vide its order dated 16.07.2007. 23. Also, a similar view had been taken by the Hon’ble High Court of Bombay in the case of Agarwal Metals and Alloys Vs. ACIT & Ors (2012) 346 ITR 64 (Bom.) and the Hon’ble High Court of Delhi in the case of Pr. CIT Vs. Jagat Talkies Distributors (2017) 85 taxmann.com.189 (Del). 24. I further find that similar issue had been adjudicated by a division bench of the ITAT, Raipur in favour of the assessee in the case of Paramjeet Narang L/h. Shri Brij Mohan Narang Vs. ITO-2(2), Bilaspur, ITA No. 22 & 23/RPR/2017 & ITA No. 183/RPR/2017, dated 04.08.2022 wherein, the Tribunal had quashed the assessment framed by the A.O, observing as under: “9. Controversy involved in the present appeal lies in a narrow compass, i.e., sustainability of the assessment framed by the A.O without making available a copy of the “reasons to believe” to the assessee who after duly complying with the notice u/s 148 of the Act is stated to have specifically requested for the same. Before us, it is the claim of the Ld. AR that the assessee had vide a letter dated 30.10.2012, inter alia, requested the A.O to make available a copy of the “reasons to believe” on the basis of which his case was reopened u/s.147 of the Act. In order to fortify his aforesaid claim the Ld. AR had taken us through the aforesaid letter dated 30.10.2012 (supra), on the basis of which the assessee had requested for a copy of “reasons to believe”, Page 32 of APB, which reads as under: “To, The Income Tax Officer Date :30.10.2012 Ward-1(1), Bilaspur (C.G.) Assessee : Shri Brijmohan Narang C. G. Plaza, Bilaspur. Reference : Your notice under section 148 of the Income Tax Act, 1961 For assessment year 2009-10 20 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 Subject : COMPLIANCE Dear Sir, 1. The assessee has already filed the Return of income as per particulars given below Date of filing :18.03.2021 Acknowledgement No. : 0131010772 Filed with : ITO, Ward-2(2), Bilaspur 2. Photocopy of the acknowledgement for filing the same is enclosed herewith. 3. Kindly treat the aforesaid return of income as filed in compliance to the notice under reference. 4. Your goodself is requested to kindly issue us certified copy of the reasons recorded and approval obtained, if any, for issuance of Notice under reference to enable us to raise our objections. Thanking you, Sd/- Yours faithfully V.K Khatri (Counsel to the assessee)” As per the assessment records, it transpires that the A.O had vide an order sheet entry made a reference of the aforesaid letter dated 30.10.2012 (supra) that was filed by the assessee’s Counsel viz., Shri V.K.Khatri, CA, which reads as under: “30.10.2012: A letter received in Dak counter from Shri V.K Khatri, CA and Counsel for the a; in her written reply the counsel of the assessee stated that the return of income filed on 18.03.2011 may be treated as return filed in compliance to notice u/s.148” 10. As the assessee had claimed that the A.O had despite specific request failed to make available a copy of the “reasons to believe” on the basis of which his case was reopened u/s.147 of the Act, therefore, in order to verify the veracity of his said claim we had called for the assessment records and perused the same. On a perusal of the records, we find that the assessee in the course of the assessment proceedings had specifically requested the A.O for a copy of the “reasons to believe” that formed the very basis for 21 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 reopening of his case u/s.147 of the Act. However, as stated by the Ld. AR, and rightly so, it transpires that the A.O had failed to make available the copy of the aforesaid “reasons to believe” to the assessee prior to the culmination of the assessment proceedings. Nothing is either discernible from the assessment records nor brought to our notice by the Ld. DR which would prove to the contrary and therein, establish that the copy of the “reasons to believe” were duly made available to the assessee prior to the framing of the assessment by the A.O vide his order passed u/s. 143(3) r.w.s.147 dated 29.03.2014. 11. After having given a thoughtful consideration to the issue in hand, we are of the considered view that the failure on the part of the A.O to make available to the assessee a copy of the “reasons to believe” which formed the basis for reopening of his case goes to the very root of the validity of jurisdiction that was assumed by him for framing the impugned assessment. We, say so, for the reason that as the assessee despite specific request for a copy of the “reasons to believe” was not provided with the same by the A.O, thus, he remained divested of his statutory right of objecting to the very basis on which his case was reopened under section 147 of the Act. As stated by the Ld. AR, and rightly so, as held by the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO & Ors. (2003) 259 ITR 19 (SC), the assessee after obtaining a copy of the “reasons to believe” is vested with a statutory right to file his objections before the A.O, which the latter is required to dispose off on the basis of a speaking order. As in the case before us there has been a complete violation of the applicable principle of law by the A.O, who had despite specific request by the assessee failed to communicate the “reasons to believe” that had formed the very basis for reopening of his assessment u/s.147 of the Act, therefore, the very assumption of jurisdiction by him and framing of the impugned assessment cannot be sustained and is liable to be struck down on the said count itself. Our aforesaid view is supported by the judgment of the Hon’ble High Court of Bombay in the case of Agarwal Metals and Alloys Vs. ACIT & Ors. (2012) 346 ITR 64 (Bom.). In its aforesaid order, the Hon’ble High Court had after taking cognizance of the fact that the A.O in the case before them had failed to communicate the “reasons to believe” on the basis of which the case of the assessee was reopened, quashed the assessment by treating the same as having been passed in a brazen violation of the governing principles of law. The relevant observations of the Hon’ble High Court are culled out as under: “4. On these admitted facts, it is evident that there has been a complete violation of the applicable principles of law by the Assessing Officer. The Assessing Officer was 22 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 required to communicate the reasons for reopening the assessment which he has failed to do. The Assessing Officer despite the judgment of the Supreme Court in GKN Driveshafts (India) Ltd., [2003] 259 ITR 19 (SC) has failed to provide an opportunity to the assessee to submit his objections to the reopening of the assessment. In the affidavit-in-reply, it has been submitted that the assessee was well aware of the reasons for the reopening of the assessment as the reasons were on the record for the assessment year 2007–08. This is clearly a specious explanation. According to counsel appearing on behalf of the Revenue, during the course of the assessment year 2007–08, it has been found that the petitioner has been engaged in under invoicing and it is on that basis that the assessment for the assessment year 2004–05 is sought to be reopened. Even if the submission of the learned counsel were to be correct, reasons have to be communicated to the petitioner. There has admittedly been no communication of reasons to the petitioner. In these circumstances, we are inclined to quash and set aside the impugned order of assessment which has been passed in a brazen violation of the governing principles of law. However, in order to obviate the bar of limitation, we intend to incorporate a protective stay in order to enable the Assessing Officer to proceed further in accordance with law.” Also, a similar view had been taken by the Hon’ble High Court of Delhi in the case of Pr. CIT Vs. Jagat Talkies Distributors (2017) 85 taxmann.com 189 (Del.). In its aforesaid order, the Hon’ble High Court relying on the judgment of the Hon’ble High Court of Bombay in the case of CIT Vs. Trend Electronics, ITA No.1867 of 2013, had held, that on account of the failure of the A.O to make available to the assessee a copy of the reasons for reopening of the assessment u/s.147 of the Act, the re-assessment proceedings would stand vitiated in law. Accordingly, as in the case before us, the A.O despite specific request of the assessee had failed to provide to him the copy of the reasons to believe on the basis of which his case was reopened u/s.147 of the Act, therefore, as per the aforesaid settled position of law the assessment framed by the him being devoid and bereft of valid assumption of jurisdiction cannot be sustained and is herein quashed.” 25. Apart from that, a similar view had been taken by the ITAT, Raipur in the case of Gajraj Giri Vs. ITO, ITA No.222/RPR/2023, dated 06.09.2023. The Tribunal following 23 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 its earlier order passed in the case of Paramjeet Narang L/h. Shri Brij Mohan Narang Vs. ITO-2(2), Bilaspur (supra), had observed that where the A.O had issued a reopening notice against the assessee, but failed to make available a copy of the “reasons to believe” that had formed the basis for reopening his case u/s. 147 of the Act, the impugned assessment being devoid of valid assumption of jurisdiction was liable to be quashed. Further, the aforesaid view was also reiterated by the ITAT, Raipur in the case of Saraswati Garewal Vs. ITO (2024) 158 taxmann.com 37 (Raipur). 26. I, thus, respectfully following the aforesaid judicial pronouncements am of the view, that as in the case before me the A.O had despite specific request of the assessee failed to provide to him a copy of the “reasons to believe” on the basis of which his case was reopened u/s.147 of the Act, therefore, as per the aforesaid settled position of law, the assessment framed by him being devoid and bereft of any valid assumption of jurisdiction cannot be sustained and is herein quashed. 27. As I have quashed the assessment for want of valid assumption of jurisdiction by the A.O u/s.147 of the Act, therefore, I refrain from adverting to the contentions based on which the revenue has assailed the order passed by the CIT(Appeals) which, having been rendered as merely academic in nature are left open. 28. In the result, appeal of the revenue is dismissed in terms of the aforesaid observations.” As the facts and issue involved in the present appeal remains the same as were there before me in the aforementioned case i.e. DCIT-1(1), Raipur (C.G.) Vs. Rajendra Kumar Agrawal (supra), therefore, I follow the same. Accordingly, I quash the assessment framed by the A.O u/s.143(3) r.w.s. 147 of the Act, dated 31.12.2018 for want of valid assumption of jurisdiction. Thus, the Grounds of appeal Nos.2, 3 & 4 raised by the assessee company are allowed in terms of the aforesaid observations. 24 Minimex Marketing Pvt. Ltd. Vs. ITO-3(1), Raipur ITA No.200/RPR/2024 12. As I have quashed the assessment framed by the A.O vide his order passed u/s.143(3) r.w.s. 147 of the Act, dated 31.12.2018 for want of valid assumption of jurisdiction, therefore, I refrain from adverting to the contentions as regards the merits of the case, which, thus are left open. Thus, the Ground of appeal No.1 raised by the assessee company is disposed off in terms of the aforesaid observations. 13. In the result, appeal of the assessee company is allowed in terms of the aforesaid observations. Order pronounced in the open court on 04th day of December, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 04th December, 2024. ***SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "