INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Non-providing of reasons recorded under section 148(2) -

AO received information from DGIT(Inv.) that assessee was beneficiary of hawala purchase transactions from nine hawala parties and accordingly the case of assessee was reopened under section 147 by issuing notice under section 148. Assessee pleaded AO to supply the reasons recorded under section 148(2). AO did not provide the copy of the reasons recorded under section 148(2). However, the same was reproduced in assessment order thereby denying the opportunity to file a objections against the re-assessment proceedings and finally framing of assessment under section 143(3) read with section 147 by making addition on account of profit element in the bogus purchases @12.50%. Held: The requirement of supply of reasons under section 148 when assessee had specifically requested for the same after complying with notice under section 148 was sine qua non and goes to the root of the jurisdiction of AO. Assessment framed without supplying reasons recorded under section 148 deprived assessee from filing the objections to the said reopening. Therefore, assessment framed by AO without supplying reasons was without jurisdiction and could not be sustained.

Followed:GKN Driveshafts (India) Ltd. v. ITO &Ors. (2003) 259 ITR 19 (SC) : 2003 TaxPub(DT) 0734 (SC) CIT v. IDBI Ltd. [ITA No. 494 of 2014] : 2016 TaxPub(DT) 5113 (Bom-HC) CIT v. Trend Electronics [ITA No. 1867 of 2013] : 2015 TaxPub(DT) 3759 (Bom-HC) CIT v. Videsh Sanchar Nigam Ltd. (2011) 340 ITR 66 (Bom) : 2012 TaxPub(DT) 0676 (Bom-HC) CIT v. Fomento Resorts &Hotels Ltd. [ITA No. 71 of 2006] : 2012 TaxPub(DT) 2613 (Bom-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2009-10

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