M/s. Communication Venture (India) Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 285/DEL/2010

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0001 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-07-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 26-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Assessee Lawyers: R M MEHTA
• Keywords: Period of limitation; Validity of assessment; Accommodation entries
• Section: 143(3); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE S H.I.C.SUDHIR , JUDICIAL MEMBER AND SH. J.S.REDDY, ACCOUNTANT MEMBER I.T.A .NO. 3496/ DEL/201 0 (ASSESSMENT YEAR - 2001 - 02 ) DCIT, CIR. - 2(1), NEW DELHI (APPELLANT) VS M/S COMMUNICATION VENTURE (INDIA) PVT. LTD. (NOW ATLANDA CAPITAL PV.T LTD.), B - 115, SARVODAYA ENCLAVE, NEW DELHI PA N - AAACC6474B (RESPONDENT) CO. - 285/DEL/2010 (IN I. T.A .NO. 3496/ DEL/201 0) (ASSESSMENT YEAR - 2001 - 02 ) M/S COMMUNICATION VENTURE (INDIA) PVT. LTD. (NOW ATLANDA CAPITAL PV.T LTD.), B - 115, SARVODAYA ENCLAVE, NEW DELHI PA N - AAACC6474B (RESPONDENT) VS DCIT, CIR. - 2(1), NEW DELHI (APPELLANT) APPELLANT BY SH.R.M.MEHTA, CA RESPONDENT BY SMT. PARWINDER KAUR, SR. DR ORDER PER I.C.SUDHIR, JM THE REVENUE HAS QUESTIONED ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION MADE BY T H E AO U/S 68 OF THE ACT. THE ASSESSEE ON THE OTHER HAND OBJECTED THE VALIDITY OF ASSESSMENT FRAMED U/S 147 R.W.S 143(3) OF THE ACT , A S THE NOTICE ISSUED U/S 148 WAS NOT SERVED UPON THE ASSESSEE WITHIN THE PRESCRIBED TIME LIMIT. 2. SINCE THE OBJECTION R AISED IN THE CROSS - OBJECTION OF THE ASSESSEE INVOLVES A LEGAL ISSUE GOING TO THE RO O T OF THE MATTERS , WE PREFERRED TO ADJUDICATE UPON THE CROSS OBJECTION FIRST. 2 I.T.A .NO. 3496/DEL/2010 & CO. - 285/DEL/2010 CO - 285/DEL/2010 3. THE ASSESSEE HAS RAISED FOLLOWING OBJECTIONS AGAINST THE FIRST APPELLATE ORDER: - 1. THE CIT(APPEALS) ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE REOPENING UNDER SECTIONS 147/148 BY THE A.O. WITHOUT APPRECIATING AND IN FACT NOT DEALING AT ALL WITH THE SUBMISSIONS MADE DURING THE COURSE OF THE HEARING WITH REFERENCE TO THE FACTS AND THE JUDGMENTS RELIED UPON. 2. THE CIT(A) ERRED IN NOT CONSIDERING AND IN FACT IGNORING THE SUBMISSION THAT THERE HAD BEEN NO VALID SERVICE OF THE NOTICE UNDER SECTION 148 WITHIN THE TIME PERIOD OF LIMITATION AND THAT ACCORDINGLY THE ASSESSMENT WAS NULL AND VOID, ESPECIALLY GIVEN THE FACT THAT THE AFFIDAVIT FILED BY THE APPELLANT BEFORE THE A.O. REMAINED UNREBUTTED. 3. THE CIT(A) FURTHER ERRED IN NOT CONSIDERING THE ARGUMENT THAT THE REOPENING AFTER A LAPSE OF 5 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR WAS BARRED BY LIMITATION AND THAT THERE WAS NO ALLEGATION IN THE REASONS RECORDED THAT THE ASSESSEE HAD FAILED TO DISCLOSE MATERIAL FACTS. 4. THAT THE CIT(A) WHILE UPHOLDING THE ACTION UNDER SECTION 148 FAILED TO APPRECIATE THAT THE REASONS RECORDED FOR THE REOPE NING WERE OF GENERAL NATURE AND HAD NO DEMONSTRABLE NEXUS WITH THE FACTS OF THE ASSESSEE S CASE. 4. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES ON THE ISSUES RAISED IN THE ABOVE OBJECTIONS. 5. THE L D . AR SUBMITTED THAT THE RETURN O F INCOME FOR THE ASSESSMENT YEAR 2001 - 02 UNDER CONSIDERATION WAS PROCESSED U/S 143( 1 ) OF THE ACT. SUBSEQUENTLY ON THE RECEIPT OF INFORMATION FROM THE INVESTIGATION WING OF THE DEPARTMENT THAT SOME OF PERSONS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES, THE AO INITIATED RE - OPENING PROCEEDINGS U/S 147 OF THE ACT AFTER RECORDING THE REASONS. IN RESPONSE TO THE NOTICE ISSUED TO THE ASSESSEE ON 23.10.2008 , T HE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED THE PROCEEDINGS BEFORE THE AO. THE ASSESSEE BY LET TER DATED 27.11.2008 TO THE AO RAISED OBJECTIONS AGAINST THE RE - OPENING CONTENDING THAT PHOTOCOPY OF THE NOTICE U/S 1 48 DATED 27.03.2008 ATTACHED TO THE NOTICE DATED 21.11.2008 RECEIVED BY THE ASSESSEE, WAS NEVER SERVED UPON THE ASSESSEE, HENCE THE PROCEED INGS INITIATED ARE BAD IN LAW AS NULL AND VOID. IT WAS CONTENDED THAT NOTICE U/S 1 48 STATED TO BE SENT ON 3 I.T.A .NO. 3496/DEL/2010 & CO. - 285/DEL/2010 27.03.2008 IS BEYOND 4 YEARS PERIOD. AGAIN VIDE LETTER DATED 02.12.2008 ADDRESSED TO THE AO THE ASSESSEE REITERATED ITS OBJECTION THAT UNLESS NOTIC E U/S 148 IS SERVED ON THE ASSESSEE IN THE MANNER PRESCRIBED U/S 288 OF THE ACT , T HE SERVICE IS INSUFFICIENT AND THE AO DOES NOT HAVE THE JUSTIFICATION TO RE - ASSESS THE ASSESSEE. THUS, THE SERVICE OF A VALID NOTICE IS A CONDITION TO THE VALIDITY OF THE R E - ASSESSMENT AND THE AO HAS FIRST TO PROVE THAT THE NOTICE U/S 148 WAS DULY SERVED UPON THE ASSESSEE WITHIN THE PRESCRIBED PERIOD. THE AO REJECTED THE OBJECTION RAISED BY THE ASSESSEE AND FRAMED THE ASSESSMENT U/S 147 R.W.S 143(3) OF THE ACT. THE L D. AR SUBMITTED FURTHER THAT SIMILAR OBJECTION WAS RAISED BEFORE THE LD. CIT(A) BUT THE ASSESSEE COULD NOT SUCCEED. 6. THE LD. AR SUBMITTED THAT THE AO IS REPORTED TO HAVE ISSUED THE NOTICE U/S 148 DATED 27.03.2008 BY SPEED POST AT THE ASSESSEE S ADDRESS I.E B - 231, OKHLA INDUSTRIAL AREA, PHASE - I, NEW DELHI. IT IS APPARENT FROM THE SAID NOTICE U/S 148 THAT THERE W E RE TWO ADDRESSES GIVEN THEREIN WITHOUT INDICATING ON WHICH ADDRESS THE NOTICE WAS ISSUED. THE OKHLA INDUSTRIAL AREA ADDRESS REFERRED TO BY THE A O IS ON THE BASIS OF ASSESSEE S LETTER DATED 06.11.2002 IN THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2001 - 02 ABOUT SIX YEARS BACK. THE ASSESSEE HAD SHIFTED FROM B - 231, OKHLA INDUSTRIAL AREA, PHASE - I, NEW DELHI TO B - 115, SARVODAYA ENCLAVE, NEW DELHI W.E.F 0 1.02.2005. THE ASSESSEE HAD FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005 - 06 AND SUBSEQUENT ASSESSMENT YEAR AT THE ADDRESS B - 115, SARVODAYA ENCLAVE, NEW DELHI. FORM NO - 18 DATED 24 - 01 - 2005 UNDER THE COMPANIES ACT REGARDING CHANGE OF ADDR E S S WAS ALSO FILED WITH THE RETURN OF INCOME FOR ASSESSMENT YEAR 2005 - 06. ON THE ABOVE NEW ADDRESS INTIMATION/ORDER AND CORRESPONDENCE HAVE ALSO BEEN MADE BY THE DEPARTMENT. HE SUBMITTED THAT IN THE PROCEEDINGS FOR ASSESSMENT YEAR 2005 - 06, THE AO HAD SENT TWO LETTERS DATED 08.08.2007 DULY SIGNED BY THE SAME AO AT B - 115, SARVODAYA ENCLAVE, NEW DELHI ADDRESS. INTIMATION U/S 143(1) DATED 25.01.2008 FOR ASSESSMENT YEAR 2006 - 07 HAD ALSO BEEN SENT BY THE SAME AO AT B - 115, SARVODAYA ENCLAVE, NEW DELHI ADDRESS. HENCE THERE WAS NO 4 I.T.A .NO. 3496/DEL/2010 & CO. - 285/DEL/2010 JUSTIFICATION F OR THE AO TO ISSUE NOTICE U/S 148 AT THE OLD ADDRESS B - 231, OKHLA INDUSTRIAL AREA, PHASE - I, NEW DELHI. THE LD. AR SUBMITTED THAT THE DISPATCH TO THE WRONG ADDRESS ITSELF DOES NOT AMOUNT TO SERVICE OF NOTICE ON THE ASSESSE E. HE HAS SUBMITTED THAT AN AFFIDAVIT DATED 19.01.2009 TO THIS EFFECT ABOUT THE NON - SERVICE OF NOTICE WAS FURNISHED BEFORE THE LD. CIT(A). THE LD. AR ALSO REFERRED PAGE NO - 1 TO 67 OF THE PAPER BOOK WHICH ARE COPIES OF NOTICE ISSUED U/S 148 DATED 27.03.20 08 AND THE CORRESPONDENCE S BY THE DEPARTMENT ON THE NEW ADDRESS AND OBJECTIONS RAISED BY THE AO RE GARDING NON SERVICE OF NOTICE, AFFIDAVIT FILED BY THE ASSESSEE, LETTER RELATING TO CHANGE OF ADDRESS ETC. THE L D . AR ALSO PLACED RELIANCE ON THE FOLLOWING DE CISIONS: - I) 107 TTJ 149 (JAB.) (T N ); II) 344 ITR 541 (DELHI ) . 7. LD. SR. DR ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW. SH E SUBMITTED THAT THE ASSESSEE HAS PARTICIPATED IN THE ASSESSMENT PROCEEDINGS ONLY IN RESPONSE OF THE NOTICE SER VED UPON HIM. SHE ALSO SUBMITTED THAT THE NOTICE U/S 148 ISSUED ON 27.03.2008 WAS WELL WITHIN THE PRESCRIBED TIME LIMIT. 8. CONSIDERING THE ABOVE SUBMISSIONS IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON THE RECORD AND THE DECISION S RELIED UPON, WE FIND THAT THERE WERE SUFFICIENT CORRESPONDENCE S BETWEEN THE ASSESSEE AND THE DEPARTMENT BEFORE THE ISSUANCE OF THE NOTICE U/S 148 DATED 27.03.2008 WHICH SHOW THAT THE DEPARTMENT WAS AWARE OF THE CHANGED ADDRESS OF THE ASSESSEE FROM B - 231, OKHLA INDUSTRIAL AREA, PHASE - I, NEW DELHI TO B - 115, SARVODAYA ENCLAVE, NEW DELHI. THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005 - 06 AND SUBSEQUENT ASSESSMENT YEARS WITH THE NEW ADDRESS. ON THE CHANGED ADDRESS INTIMATION/ORDER A ND CORRESPONDENCE HAVE ALSO BEEN MADE BY THE DEPARTMENT. INTIMATION U/S 143(1) DATED 25.01.2008 FOR ASSESSMENT YEAR 2006 - 07 WAS ALSO SENT BY THE SAME A O AT THE CHANGED ADDRESS. HENCE WE CONCUR WITH THE CONTENTION OF THE LD. AR THAT THERE WAS NO JUSTIFICA TION FOR THE A O TO ISSUE NOTICE U/S 148 OF THE ACT DATED 5 I.T.A .NO. 3496/DEL/2010 & CO. - 285/DEL/2010 27.03.2008 IN QUESTION AT THE OLD ADDRESS OF THE ASSESSEE. THE REVENUE ALSO FAIL TO ESTABLISH THAT ON WHICH ADDRESS OUT OF THE TWO ADDRESSES MENTIONED IN THE NOTICE U/S 148 WAS SENT AND SERVED UPON THE ASSESSEE. THE PRESUMPTION OF SERVICE COMES TO THE RESCUE OF THE REVENUE ONLY WHEN THE NOTICE IS DISPATCHED THROUGH REGISTERED POST AND THE NOTICE IS PROPERLY ADDRESSED. HERE IS THE CASE WHER E THE DISPUTE I S TO WHETHER THE NOTICE U/S 148 DATED 27.03.2008 WAS SENT ON A PROPER ADDRESS OR NOT. IT IS AN ESTABLISHED POSITION OF LAW THAT SERVICE OF NOTICE U/S 148 OF THE ACT WITHIN THE PRESCRIBED TIME LIMIT IS A CONDITION PRECEDENT AND MANDATORY TO ACQUIRE JU RISDICITON BY THE AO TO FRAME THE ASSESSMEN T U/S 147 R.W.S 143(3) OF THE ACT. IN ABSENCE OF SERVICE OF THE SAID NOTICE ISSUED U/S 148 OF THE ACT UPON THE ASSESSEE , THE ASSESSMENT IN QUESTION U/S 147 R.W.S 143(3) OF THE ACT IS NULL & VOID. IT IS ORDERED ACCORDINGLY. THE ISSUE RAISED IN OBJECTION NO. - 1 TO 3 QUESTIONING THE VALIDITY OF NOTICE ISSUED U/S 148 DATED 27.03.2008 IS THUS DECIDED IN FAVOUR O F THE ASSESSEE. THE RELATED OBJECTION NOS. - 1 TO 3 ARE THUS ALLOWED. 9. THE OBJECTION NO. - 4 OF THE CROSS - OBJECTION AND THE GROUNDS RAISED IN THE APPEAL OF THE REVENUE QUESTIONING THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION MADE U/S 68 OF THE ACT THUS DO NOT NEED ADJUDICATION AS THE SAME HAVE BECOME INFRUCTUOUS IN VIEW OF THE ABOVE FINDING ON THE VERY VALIDITY OF THE ASSESSMENT ORDER IN QUESTIO N. 10. IN THE RESULT THE CROSS - OBJECTION OF THE ASSESSEE IS ALLOWED AND APPEAL PREFERRED BY THE REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 9 T H OF OCTOBER 2014. S D / - S D / - ( J. S.REDDY ) ( I.C.SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 9 / 1 0/2014 *AMIT KUMAR* 6 I.T.A .NO. 3496/DEL/2010 & CO. - 285/DEL/2010 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI