Raghunandan Bhomia Vs DCIT (ITAT Mumbai)
Assessee was searched u/s 132 & based on information available from the seized material, AO made additions on account of unexplained money & jewellery u/s 69A. 148 notice was issued after recording reasons. Despite a specific request by assessee, AO did not supply the reasons for reopening assessment.
In appeal, assessee had relied on the Supreme Court’s decision in GKN Driveshafts ( India) Ltd. vs. ITO [2002] wherein it was held that without furnishing the reasons recorded by AO, the completion of assessment is not sustainable in law. AO was bound to furnish the reasons to enable the assessee to present its defence & objections to the proceedings.
On appeal, CIT(A) quoted various other decisions on the issue, whether it was relevant material on which reasonable person could form reasonable belief and sufficiency of reasons could not be challenged etc. CIT(A) did not give any finding as to whether the reasons were supplied to the assessee and if the reasons were not supplied, could re-assessment order be passed especially when various direct decision of Jurisdictional High Court were cited before him.
On further appeal, Tribunal noted that for the first time, Dept furnished the reasons recorded but the DR could not ascertain whether it was supplied to the assessee.
