AMIT BAJAJ ADVOCATE

 The Pune ITAT has imposed costs on the revenue for causing harrasment to the assessee in recovery proceedings in a case namely Shramjivi Nagari Sahakari Pat Sanstha V ACIT. The bank account of assessee was attached even before the communication of CIT(A)'s order to the assessee. This is an important order as it is generaly seen that the department ussualy adopt coercive measures for recovery proceedings, I hope the department take some lesson from this order.

Facts: The assessee, a credit co-operative society, contravened s. 269SS & 269T because of which penalty u/s 271E was levied. The CIT(A) confirmed the levy of penalty. Before service of the CIT(A)’s order, the assessee’s bank account was attached u/s 226(3). The assessee filed a stay application and claimed that as the assessee had to bear costs owing to the illegal action of the AO, costs had to be awarded to it. HELD upholding the assessee’s plea:

The Delhi High Court in an important case namely CIT V Safetag International India Pvt Ltd. has held that in case of reassessment proceedings u/s 147 of Income Tax Act if the assessee doesnot demand reasons recorded by AO for reopening of case then AO is not bound to supply the same suo moto to the assessee. 

 
Brief Facts: The assessee’s assessment was reopened u/s 147. The assessee did not ask for the recorded reasons. Even before the CIT(A), though the assessee challenged the reopening as being without jurisdiction, it did not ask for the reasons. Before the Tribunal, the assessee claimed that it was not aware that it could demand the reasons and object thereto. Pursuant thereto the Tribunal remitted the case to the AO with direction that the reasons & opportunity to object be provided and denovo assessment be framed if objections were rejected. On appeal by the department, the appeal was allowed: