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Darshan Kumar Gupta, New Delhi vs. Income Tax Officer - (Income Tax Appellate Tribunal) (18 Jan 2023)

Assessing Officer is bound to supply reasons of reopening of assessment


Direct Taxation

In present case, the assessment was reopened under Section 147 of the Income-tax Act, 1961 and an assessment under Section 143(3) read with Section 147 of the Act was framed vide order. The Assessing Officer assessed income at Rs. 27,30,548 after making addition of Rs. 22,71,048 in respect of capital gain. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who after considering the submissions dismissed the appeal of the assessee. Now the assessee is in appeal before this Tribunal.

The assessee submitted that the reopening of the assessment is invalid and is contrary to the judicial pronouncements. He contended that despite request for supply of the reasons recorded for reopening of the assessment, the Assessing Officer did not supply the reasons. He submitted that the basis of reopening is ill founded.

As per the assessment order the case was reopened on the basis of the information relating to purchase of DDA flat at Dwarka in auction conducted by the learned Receiver appointed by the Hon'ble High Court during the financial year 2010-11. Verification of source of acquisition was the basis for reopening of the assessee. The assessee had stated that the investment was made out of the sale-consideration of two properties which he had sold.

Assessing Officer was required to supply reasons of reopening of assessment. The assessee has a legal right to file objections against the re-opening of assessment. Non supply of reasons deprived the assessee from this valuable legal right to raise objection against the reasons for reopening of assessment. The issue relates to the assessment year 2011-12 and it would be too late to restore the matter for supply of reasons to the assessee. The Assessing Officer ought to have supplied the reasons. The reopening of assessment is not justified in the facts and circumstances of the present case.

Since the action of Assessing Officer is contrary to ratio laid down by the Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & others, wherein it was clarified that when a notice under Section 148 of the Act is issued, the proper course for the noticee is to file return and if so desires, to seek reason for issuing notices. The Assessing officer is bound to furnish reasons within a reasonable time. Undisputedly, in the present case the reasons were not furnished to the assessee. Therefore, he could not file any objection. Impugned order is set aside. Appeal of assessee is allowed.


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