The following important judgement is available for download at itatonline.org.
Synopsys International Limited vs. DDIT (ITAT Bangalore)
S. 147: Non-supply of recorded reasons before passing reassessment order renders the reopening void. Subsequent supply does not validate reassessment order
The AO issued a notice u/s 147 to reopen the assessment. Though the assessee filed a ROI and requested for a copy of the recorded reasons, the same were not furnished to it. The AO passed a reassessment order and thereafter supplied the assessee with a copy of the recorded reasons. In appeal before the Tribunal, the assessee claimed that as the recorded reasons had not been furnished to it before passing the reassessment order, the reassessment order was void. HELD by the Tribunal allowing the appeal:
In GKN Driveshafts 259 ITR 19 (SC) it was held that the AO is bound to furnish the reasons recorded for reopening the assessment within a reasonable time so that the assessee can file its objections thereto. Even as per the rules of natural justice, the assessee is entitled to know the basis on which the AO has formed an opinion that income has escaped assessment. There is no justifiable reason for the AO to deprive the assessee of the recorded reasons. If the reasons are not furnished to the assessee during the assessment proceedings, then the subsequent furnishing of the reasons after completion of assessment proceedings serves no purpose and amounts to the assessee being denied its right to raise objections to the validity of the reopening proceedings. A reassessment order passed without furnishing the recorded reasons is not sustainable in law. The furnishing of reasons after completion of assessment does not make good the defect/invalidity with which the initiation of proceedings u/s 147/148 is tainted (K V Venkataswamy Reddy (Bang) (attached), Tata International Ltd (ITAT Bom) & Videsh Sanchar Nigam Ltd 340 ITR 66 (Bom) (SLP dismissed) followed)
Regards,
Editor,
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