Ajay Kumar Bajaj Vs ITO (ITAT Raipur)
Reopening Quashed for Non-Supply of Material Relied Upon in Reasons: ITAT Raipur
Summary: The Raipur Bench (SMC) of the Income Tax Appellate Tribunal (ITAT) partly allowed the assessee’s appeal for AY 2017-18, holding that the reassessment proceedings were vitiated due to failure of the Assessing Officer to supply the material/information forming the basis of “reasons to believe.”
In the present case, the assessment was reopened under sections 147/148 on the basis of certain “information/material” referred to in the recorded reasons. However, despite repeated opportunities, the Revenue failed to demonstrate that such information was ever shared with the assessee. Even the remand report filed before the Tribunal was silent on communication of the underlying material.
Relying on its own earlier decisions and judicial precedents including Leeladhar Chandrakar v. ITO, Micro Marbles Pvt. Ltd. v. ITO (Rajasthan High Court) and Tata Capital Financial Services Ltd. (Bombay High Court), the Tribunal reiterated that non-supply of material referred to in the reasons to believe violates principles of natural justice and renders the reopening void ab initio.
Accordingly, the ITAT quashed the reassessment proceedings, holding them to be bad in law. Once the reopening was annulled, the addition of ₹6 lakh on merits became academic and was not adjudicated. The appeal was thus partly allowed on legal grounds.
