Smt. Iqbal Kaur Aujla, Jalandhar V. The Income Tax Officer, Phagwara

ITA 100/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0721 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 17-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K CHOPRA
• Keywords: Opportunity of being heard; Principle of natural justice; Assessment record; Reason to believe

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (SMC). BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.100(ASR)/2016 ASSESSMENT YEAR:2008-09 PAN: ADMPA7377B SMT. IQBAL KAUR AUJLA, VS. INCOME TAX OFFICER, C/O M/S. AUJLA POLYCLINIC, WARD-2, PHAGWARA. MANDI ROAD, NURMAHAL, DISTT. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. S.K. CHOPRA, ADVOCATE RESPONDENT BY: SH. UMESH TAKYAR, DR DATE OF HEARING: 16/05/2016 DATE OF PRONOUNCEMENT: 20/05/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT YE AR 2008-09, AGAINST THE ORDER DATED 19.11.2015, PASSED BY THE L D. CIT(A)-2, JALANDHAR. THE ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL: 1. THAT THE CIT(A) HAS ERRED IN CONFIRMING THE ORD ER OF THE AO PASSED WITHOUT JURISDICTION, AGAINST LAW AND FACTS ON THE FILE, WHICH DESERVES TO BE SET ASIDE A; AS NO VALID AND P ROPER NOTICE U/S 143(2) WAS EITHER ISSUED OR SERVED VALID LY AND PROPERLY WITHIN THE PRESCRIBED TIME; THE CASE WAS S ELECTED FOR LIMITED SCRUTINY ON THE BASIS OF AIR INFORMATION AN D SHOULD HAVE BEEN CONFINED TO IT. 2. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMI NG THE ORDER OF THE AO WHEN THE AO HAS ACTED ON GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IN NOT AFFORDING A PR OPER ADEQUATE AND VALID OPPORTUNITY OF BEING HEARD AND F AILED TO SUPPLY THE COPIES AND DETAILS OF THE MATERIAL RELIE D UPON AND USED AGAINST THE ASSESSEE AS IS ALSO APPARENT FROM THE ORDER UNDER REFERENCE ITSELF, WHICH RENDERS THE ASSESSMEN T VOID. ITA NO.100(ASR)/2016 ASSESSMENT YEAR: 2008-09 2 THE ORDER OF ASSESSMENT DESERVES TO BE ANNULLED AND QUASHED. 3. THAT THE LD. CIT(A) IS WHOLLY UNJUSTIFIED IN CON FIRMING THE ORDER OF THE AO MAKING AN ADDITION OF RS.6,08,506/- TO THE RETURNED INCOME UNDER THE HEAD LONG TERM CAPITAL GA INS, WHICH IS WHOLLY ARBITRARY, BASELESS AND IS PURELY A GUESS WORK BASED ON CONJECTURES AND SURMISES IGNORING THE INSTANCES IN FAVOUR OF THE ASSESSEE PROVIDED IN SUC H A SHORT TIME AND WITHOUT CONFRONTING THE FULL PARTICULARS OF THE INSTANCES RELIED UPON AND THE MATERIAL GATHERED AT THE BACK OF THE ASSESSEE. THE SAME IS UNLAWFUL, UNJUSTIFIED AND UNCALLED FOR AND DESERVES TO BE DELETED. 4. THAT THE LD. CIT(A) IS WRONG IN HOLDING, WITHOUT ANY BASIS OR MATERIAL ON RECORD, THAT THE NATURE OF THE LAND SOL D BY THE ASSESSEE IS DIFFERENT FROM THE LAND IN RESPECT OF WHICH SALE INSTANCES HAVE BEEN QUOTED AND ACCEPTING THE SALE I NSTANCES ADOPTED BY THE AO CLAIMING TO BE BASED ON GOVT. REC ORDS, WITHOUT KNOWING ITS LOCATION AND AREA. 5. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN NOT INCL UDING THE SALES INSTANCES QUOTED BY THE ASSESSEE WHILE ARRIVING AT THE AVERAGE RATE OF THE LAND IN QUESTION FOR DETERMININ G ITS MARKET VALUE. 6. THAT THE LD. CIT(A) HAS FAILED TO PASS A SPEAKIN G ORDER IN NOT ACCEPTING TO INCLUDE THE SALES INSTANCES FORMING PA RT OF THE LAND IN THE NAME OF THE ASSESSEE IN QUESTION QUOTED BY THE ASSESSEE, IN ARRIVING AT THE AVERAGE RATE, ALTHOUG H IT WAS HELD THAT THE AO HAS NOT CONSIDERED THE EXPLANATI ON FURNISHED BY THE ASSESSEE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THERE BEING NO ADVERSE COMME NT THEREON. THUS, THE ORDER OF THE CIT(A) IN CONFIRMIN G THE ORDER OF THE AO IS BAD IN LAW. 2. APROPOS GROUND NO.1, THE FIRST CONTENTION OF THE ASSESSEE IS THAT THERE WAS NO VALID AND PROPER SERVICE OF NOTICE UND ER SECTION 143(2) OF THE INCOME TAX ACT, 1961. ACCORDING TO THE LD. COUN SEL FOR THE ASSESSEE, SINCE NO EFFORT WAS MADE TO SERVE NOTICE ON THE ASS ESSEE IN THE REGULAR COURSE BEFORE AFFIXTURE, THE SERVICE BY AFFIXTURE IS BAD IN LAW. ITA NO.100(ASR)/2016 ASSESSMENT YEAR: 2008-09 3 3. ON THE OTHER HAND, SUPPORTING THE IMPUGNED ORDER , THE LD. DR HAS CONTENDED, AS RIGHTLY HELD BY THE AUTHORITIES BELOW , THE NOTICE WAS VALIDLY SERVED THROUGH AFFIXTURE. 4. IN THIS REGARD, THE ASSESSMENT ORDER STATES AS F OLLOWS: RETURN DECLARING INCOME OF RS.2,26,160/- WAS FILED ON 31.03.2009. THE SAME WAS PROCESSED U/S 143(10 ON 23 .03.2010. THE CASE WAS PICKED UP FOR SCRUTINY UNDER CASS ON T HE BASIS OF AIR INFORMATION THAT ASSESSEE HAS PURCHASED REC LON G TERM CAPITAL GAINS BONDS FOR RS.8,00,000/-. NOTICE UNDER SECTION 143(2) DATED 05.09.2009 WAS SERVED THROUGH AFFIXTURE ON 18 .09.2009. 5. BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED AS FOLLOWS: THAT IN THIS RESPECT IT IS SUBMITTED THAT AS PER T HE ASSESSMENT ORDER UNDER REFERENCE THE AO HAS CLAIMED TO HAVE IS SUED A NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 WHICH WAS SE RVED BY AFFIXTURE ON 18.09.2009. THAT THERE IS NOTHING IN THE ORDER UNDER REFERENCE THAT HOW THE AO ACQUIRED JURISDICTION TO SERVE THE NOTICE BY AFFIX TURE. THERE BEING NEITHER PROPER AND VALID ISSUED NOR PROPER AND VALI D SERVICE OF THE NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 UPON THE ASSESSEE WITHIN THE MANDATORY PRESCRIBED TIME, THE AO LACKS JURISDICTION TO FRAME THE ASSESSMENT IN QUESTION AND THE ASSESSMEN T ORDER PASSED WITHOUT JURISDICTION IS ILLEGAL AND DESERVES TO BE SET-ASIDE. 6. IN THE IMPUGNED ORDER, THE LD. CIT(A) HAS OBSERV ED AS FOLLOWS: 5.2. I HAVE CONSIDERED THE OBSERVATIONS OF THE AO AS MADE BY HIM IN THE ASSESSMENT ORDER. I HAVE ALSO CONSIDE RED WRITTEN SUBMISSIONS FILED BY THE ASSESSEE ON RECOR D. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS AND ASSESSMENT RECORD, I AM OF THE OPINION THAT THERE I S A VALID SERVICE OF NOTICE U/S 143(2) OF THE ACT AS THE NOTI CE HAS BEEN VALIDLY SERVED THROUGH AFFIXTURE AT THE LAST KNOWN ADDRESS OF THE ASSESSEE IN THE PRESENCE OF INDEPENDENT WITNESS ES MOREOVER, ASSESSEE COOPERATED DURING ASSESSMENT PROCEEDINGS AND HAS NOT MADE SUCH OBJECTION DURING ASSESSMENT PROCEEDINGS. IN MY FURTHER OPINION, THE ASSESSEE CANNOT TAKE THIS STAND NOW IN VIEW OF PROVISIONS O F SECTION 292BB OF THE ACT. I AM OF THE OPINION THAT THE AO H AS ITA NO.100(ASR)/2016 ASSESSMENT YEAR: 2008-09 4 CORRECTLY MADE THE ENQUIRIES WITH REGARD TO INVESTM ENT IN REC BONDS AND TAKEN THE ENQUIRIES TO ITS LOGICAL CO NCLUSION. 5.3. IN VIEW OF THE ABOVE STATED FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE ASSESSEE, I AM OF THE OPINION THAT THE JURISDICTION IN FRAMING THE ASSESS MENT HAS BEEN CORRECTLY ASSUMED AND THERE IS ALSO NO FAULT I N THE ASSESSMENT FRAMED IN THE CASE AS THE ENQUIRIES HAVE BEEN TAKEN TO THEIR LOGICAL END. IN THE RESULT, GROUNDS NO. 1, 1(A) AND 1(B) OF APPEAL TAKEN BY THE ASSESSEE ARE DISMIS SED. 7. THE ISSUE IS OF VALIDITY OF SERVICE OF NOTICE U /S 143(2) OF THE ACT. THIS NOTICE, AS PER THE RECORD, HAS BEEN SERVED TH ROUGH AFFIXTURE. NOW, ORDER V, RULE 20, CPC DEALS WITH SUBSTITUTED SERVI CE. IT READS AS FOLLOWS: 20(1) : WHERE THE COURT IS SATISFIED THAT THERE IS REASON TO BELIEVE THAT THE DEFENDANT IS KEEPING OUT OF THE WAY FOR TH E PURPOSE OF AVOIDING SERVICE, OR THAT FOR ANY OTHER REASONS THE SUMMONS CANNOT BE SERVED IN THE ORDINARY WAY, THE COURT SHA LL ORDER THE SUMMONS TO BE SERVED BY AFFIXING A COPY THEREOF IN SOME CONSPICUOUS PLACE IN THE COURT HOUSE, AND ALSO UPON SOME CONSPICUOUS PART OF THE HOUSE ( IF ANY) IN WHICH THE DEFENDANT IS KNOWN TO HAVE LAST RESIDED OR CARRIED ON BUSINESS O R PERSONALLY WORKED FOR GAIN, OR IN SUCH OTHER MANNER AS THE CO URT THINKS FIT. 8. THUS, IT IS ONLY WHERE THE SUMMONS CANNOT BE SER VED IN THE ORDINARY WAY, THAT THE MODE OF SUBSTITUTED SERVICE THROUGH AFFIXTURE CAN BE ADOPTED. PRIOR TO THE AFFIXTURE, THE AUTHORITIES ARE REQUIRED TO BE SATISFIED THAT THE SUMMONS CANNOT BE SERVED IN THE ORDINARY WAY. IN THE PRESENT CASE, NO SUCH SATISFACTION IS FORTHCOMING F ROM THE RECORD. THE ASSESSMENT ORDER MERELY MENTIONS, AS IF IT WERE A R OUTINE MATTER, THAT NOTICE U/S 143(2) DATED 05.09.2009 WAS SERVED THRO UGH AFFIXTURE ON ITA NO.100(ASR)/2016 ASSESSMENT YEAR: 2008-09 5 18.09.2009. FURTHER, THE LD. CIT(A) ALSO OBSERVED THAT NOTICE HAS BEEN VALIDLY SERVED THROUGH AFFIXTURE AT THE LAST KNOW A DDRESS OF THE ASSESSEE IN THE PRESENCE OF INDEPENDENT WITNESSES. 9. NOW, SUCH SERVICE OF NOTICE THROUGH AFFIXTURE, I N THE ABSENCE OF SATISFACTION OF INCAPABILITY OF SERVICE OF THE NOTI CE IN THE ORDINARY COURSE IS NOT LEGALLY SUSTAINABLE AND IS IN VIOLATION OF T HE PROVISIONS OF ORDER V, RULE 20 OF THE CPC. ACCORDING TO SECTION 282 OF THE ACT, SERVICE OF NOTICE MAY BE MADE IN SUCH A MANNER AS PROVIDED UNDER THE CODE OF CIVIL PROCEDURE, 1908. HENCE, THE SERVICE OF NOTICE BEING IN VIOLATION OF THE PROVISIONS OF ORDER V, RULE 20, CPC, IS ALSO IN VIOLATION OF SECTION 282 OF THE ACT. FURTHER, THE LD. CIT(A) HAS OBSERVED TH AT MOREOVER, THE ASSESSEE COOPERATED DURING THE ASSESSMENT PROCEEDI NGS AND HAS NOT MADE SUCH OBJECTION DURING THE ASSESSMENT PROCEEDI NGS. THIS, AGAIN, IS NOT TENABLE. THE ISSUE OF SERVICE OF NOTICE U/S 143 (2) OF THE ACT IS A JURISDICTIONAL ISSUE, GOING TO THE VERY ROOT OF THE MATTER. THEREFORE, THE ATTENDANCE OF THE ASSESSEE IN THE ASSESSMENT PROCEE DINGS CANNOT CURE THE JURISDICTIONAL DEFECT OF ANY SERVICE OF NOTICE. 10. THIS BEING A JURISDICTION ISSUE, AGAIN, IT IS N OT CURABLE U/S 292BB OF THE ACT AND THE LD. CIT(A) HAS ERRED ON THIS SC ORE ALSO. 11. FOR THE ABOVE REASONS, FINDING MERIT IN THE GRI EVANCE OF THE ASSESSEE, RAISED THROUGH THE FIRST PART OF GROUND N O.1, THE SAME IS ACCEPTED. ITA NO.100(ASR)/2016 ASSESSMENT YEAR: 2008-09 6 12. SINCE THE VERY ASSUMPTION OF JURISDICTION OF T HE A.O. STANDS INVALIDATED IN THE ABSENCE OF DUE SERVICE OF NOTICE ON THE ASSESSEE, ALL THE PROCEEDINGS PURSUANT TO SUCH NOTICE, INCLUDING THE IMPUGNED ORDER ARE CANCELLED. 13. AS SUCH, NOTHING ELSE SURVIVES FOR ADJUDICATION . 14. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/05/ 2016. SD/- (A.D. JAIN) JUDICIAL MEMBER /SKR DATED: 20/05/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SMT. IQBAL KAUR AUJLA, JALANDHAR 2. THE ITO WARD-2, PHAGWARA. 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.