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The requirement of recording the reasons, communicating the same to the assessee, enabling the assessee to file objections and the requirement of passing a speaking order are all designed to ensure that the Assessing Officer does not reopen assessments which have been finalized on his mere whim or fancy and that he does so only on the basis of lawful reasons.

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Sec. 147 of Income Tax Act, 1961— Reassessment —Reopening of assessment invalid as reasons recorded by the assessing officer produced before the honourable High Court are quite different as given to the assessee.

Facts: Assessee went on appeal before Tribunal and raised the ground that CIT(A) has erred in upholding the validity of the proceedings initiated u/s 147 and confirming the validity of proceedings initiated the learned CIT(A) has failed to comprehend that statutorily no valid proceedings can be initiated even if the AO had prima facie reason to believe that the income had escaped assessment unless there had been a failure on the part of the assessee to have disclosed all material facts necessary for the purpose of making an assessment of the income of an assessee.

Held, that the requirement of recording the reasons, communicating the same to the assessee, enabling the assessee to file objections and the requirement of passing a speaking order are all designed to ensure that the Assessing Officer does not reopen assessments which have been finalized on his mere whim or fancy and that he does so only on the basis of lawful reasons. These steps are also designed to ensure complete transparency and adherence to the principles of natural justice. Thus, a deviation from these directions would entail the nullifying of the proceedings. As before us also the reasons recorded by the assessing officer produced before the honourable High Court are quite different and whereas the extract given to the assessee was merely of two paragraphs. In view of this, we are not inclined to uphold the reopening of the assessment and hence they are quashed. - WIMCO SEEDLINGS LTD. V/s JT. CIT - [2020] 26 ITCD Online 103 (ITAT-DELHI)