The Tax Publishers2019 TaxPub(DT) 4784 (Del-Trib)

INCOME TAX ACT, 1961

Section 148

Where assessee was not furnished reason for reopening the assessment by AO along with reassessment notice under section 148, the order of reassessment could not be upheld and the matter was remanded back to AO with the directions to first decide the objection of assessee after giving adequate opportunity of being heard to assessee.

Reassessment - Reason for issuing reassessment notice not furnished to assessee - Validity -

During the course of search operation in the case of a group concern, it was established that the said company had floated paper companies for providing accommodation entries. Statement under section 134(4) was recorded and it was admitted that one of his group of companies which had received commission from various companies including assessee company was providing bogus entries to these companies, as no work was actually executed on payment of commission by these companies. Assessee-company was issued reassessment notice, which was assailed by it contending that reasons for reopening the assessment were not furnished by AO whereas it was the duty of the AO to furnish the same along with the notice under section 148. Held: When a notice under section 148 is issued, the proper course of action for the assessee is to file return and if he so desires, to seek reasons for issuing notices and AO is bound to furnish reasons within a reasonable time. On receipt of reasons, assessee is entitled to file objections to issuance of notice and AO is bound to dispose of the same by passing a speaking order. Therefore, in the interest of justice, matter was remanded back to AO with the directions to first decide the objection of assessee after giving adequate opportunity of being heard to assessee.

Followed:GKN Driveshafts (India) Ltd. v. ITO & Ors. (2003) 259 ITR 19 (SC) : 2003 TaxPub(DT) 0734 (SC) GKN. Driveshafts (India) Ltd. v. ITO & Ors. (2002) 257 ITR 702 (Del) : 2002 TaxPub(DT) 1131 (Del-HC)

REFERRED :

FAVOUR : In assessee's favour by way of remand

A.Y. :



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