Completion of reassessment without issue of reasons is invalid: HC

Brief of the Case

In the case of CIT v Trend Electronics, Hon’ble High Bombay Court held that before issuance of reopening notice for assessment, the Revenue have to furnish the reasons for it. Otherwise, the notice will be considered as bad in Law.

Facts of the Case

The Assessing Officer initiated reassessment proceedings by issuing notice under Section 148 of the Act seeking to reopen the assessment. The assessee by a letter tried to get the copy of recorded reasons for reopening of assessment. In the reply to the assessee’s letter, the ld. AO directed the assessee to file it’s return of income and also informed the assessee that the reasons would be furnished after the return of income is filed. The assessee thereafter by letter informed the Assessing Officer that return of income under Section 139 of the Act be treated as the return of income consequent to notice under Section 148 of the Act. The Assessing Officer thereafter completed the reassessment proceedings under Section 143(3) r/w 147 of the Act without having given a copy of the reasons recorded for issue of reopening notice dated 26 March 2010 to the assesse.

The ld. CIT(A) also confirmed the orders passed by the AO.

Please become a Premium member. If you are already a Premium member, login here to access the full content.