Mr. Mane Vishnukumar Shrirang, Indapur V. ITO, Pune

ITA 1086/PUN/2005

• Counselvise Citation: 108624514 RSA 2005
• Duration Of Justice: 6 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-03-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 20-04-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Keywords: Opportunity of being heard; Question of law; Assessment record
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 1086/PN/2005 (ASSTT. YEARSS: 2000-01) MR. MANE VISHNUKUMAR SHRIRANG PROP. PRAVIN SALES CORPORATION INDAPUR MARKET YARD, INDAPUR DIST. PUNE PAN ABNPM 6396 D .. APPELLANT VS. INCOME-TAX OFFICER, WARD -5(4), PUNE` .. RESPONDENT APPELLANT BY: SHRI S UNIL GANOO RESPONDENT BY: SHRI HARESHWAR SHARMA ORDER PER G.S. PANNU, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, PUNE DATED 18.2.2005 FOR THE ASSESSMENT YEAR2000-01. 2. IN THIS CASE, THE ASSESSEE IS AN INDIVIDUAL ENGA GED IN THE BUSINESS OF TRADING AND COMMISSION AGENT OF AGRICUL TURAL PRODUCE. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2000-01 ON 25-10-2000 DECLARING AN INCOME OF RS. 5,80,505/- . A SURVEY UNDER SECTION 133A OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) WAS CONDUCTED ON 31-1-2000 AND ACCORDINGLY, THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2000-01 WAS TAKEN UP FOR SCRUTI NY ASSESSMENT BY ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. IN THE S UBSEQUENT ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT DAT ED 28.2.2003, ADDITIONS HAVE BEEN MADE ON ACCOUNT OF SUPPRESSION OF GROSS PROFIT, RENT EXPENDITURE, DIFFERENCE IN STOCK FOUND DURING THE SURVEY AND UNEXPLAINED AGRICULTURAL INCOME, ETC. THEREBY RESUL TING IN DETERMINATION OF TOTAL INCOME AT RS. 28,03,860/-. THE ASSESSMENT SO FINALIZED WAS ITA NO. 1086/PN/2005 MANE VISHNUKUMAR SHRIRANG A.Y. 2000- 01 2 CARRIED IN APPEAL BEFORE THE COMMISSIONER OF INCOME -TAX (APPEALS) WHEREBY THE ADDITIONS WERE CHALLENGED. AFTER CONSI DERING THE SUBMISSIONS OF THE ASSESSEE, THE COMMISSIONER OF IN COME-TAX (APPEALS) HAS SINCE DISMISSED THE PLEAS OF THE ASSE SSEE AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. IN THE MEMORANDUM OF APPEAL, THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEAL CHALLENGING THE ADDITIONS MADE BY THE ASSESSING OFF ICER. HOWEVER, BY WAY OF AN APPLICATION DATED 13-7-2010 THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUND OF APPEAL: SINCE THE LEARNED A.O HAS FAILED TO SERVE ON THE A PPELLANT ASSESSEE THE NOTICE U/ 143(2) OF THE ACT WITHIN THE PRESCRIBED S TATUTORY TIME LIMIT, THE IMPUGNED ASSESSMENT ORDER IS BAD IN LAW, PATENTLY I LLEGAL, WITHOUT JURISDICTION AND NULL AND VOID AB INITIO AND HENCE THE SAME MAY PLEASE BE VACATED. 3. THE LEARNED COUNSEL FOR THE APPELLANT JUSTIFIED RAISING OF THE AFORESAID ADDITIONAL GROUND OF APPEAL BY POINTING O UT THAT AT THE TIME OF FILING THE APPEAL THE JUDGMENT OF HONBLE SUPREM E COURT IN THE CASE OF ASSTT. CIT AND ANOR VS. HOTEL BLUE MOON (2010) 3 21 ITR 363 (SC) WAS NOT AVAILABLE AND HENCE THE ADDITIONAL GROUND I S NOW BEING RAISED. AS PER THE HONBLE SUPREME COURT, SERVICE OF NOTICE ON THE ASSESSEE U/S 143(2) OF THE ACT WITHIN THE PRESCRIBE D PERIOD OF TIME IS A PRIMARY REQUIREMENT FOR THE PURPOSES OF COMPLETING AN ASSESSMENT. ACCORDING TO THE ASSESSEE IN THIS CASE, THE ASSESSM ENT ORDER ITSELF SHOWS THAT THE NOTICE U/S 143(2) HAS NOT BEEN ISSUE D IN ACCORDANCE WITH THE PRESCRIBED PROVISIONS AND THEREFORE, THE S AID ISSUE GOES TO THE ROOT OF THE MATTER AND THEREFORE, DESERVES TO BE AD MITTED FOR ADJUDICATION IN THE INTEREST OF JUSTICE. 4. ON THE OTHER HAND, LEARNED DR OPPOSED THE PRAYER OF THE ASSESSEE FOR ADMISSION OF THE AFORESAID ADDITIONAL GROUND BY POINTING OUT THAT THE ISSUE SOUGHT TO BE RAISED IS NOT A PUR E QUESTION OF LAW BUT IS TO BE DECIDED ON THE BASIS OF FACTS AND THEREFOR E, THE SAME CANNOT ITA NO. 1086/PN/2005 MANE VISHNUKUMAR SHRIRANG A.Y. 2000- 01 3 BE ADMITTED AT THIS STAGE, HAVING NOT BEEN RAISED B EFORE THE LOWER AUTHORITIES. 5. ON THE ASPECT OF THE ADMISSION OF THE ADDITIONAL GROUND OF APPEAL, WE HAVE EXAMINED THE RIVAL STANDS AND IN OU R OPINION, THE SAME DESERVES TO BE ADMITTED FOR ADJUDICATION. IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 ( SC) IT HAS BEEN OBSERVED THAT THE PURPOSE OF ASSESSMENT PROCEEDING IS TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE IN ACCORDAN CE WITH LAW. IT IS ALSO A SETTLED PROPOSITION THAT THE APPELLATE PROCE EDINGS ARE AN EXTENSION OF THE ASSESSMENT PROCEEDINGS AND THE ASS ESSEE SHOULD NOT BE PREVENTED FROM RAISING A QUESTION BEFORE THE TRI BUNAL FOR THE FIRST TIME WHEREVER IT IS RELEVANT TO DECIDE THE CORRECT TAX LIABILITY OF ASSESSEE IN ACCORDANCE WITH LAW. MERELY BECAUSE TH E ISSUE HAS NOT BEEN RAISED BEFORE THE LOWER AUTHORITIES AND DOES N OT ARISE OUT OF THE ORDER APPEALED AGAINST, CANNOT BE FATAL TO DENY THE ASSESSEE FROM RAISING SUCH A GROUND FOR THE FIRST TIME BEFORE THE TRIBUNAL. MOREOVER, IN THIS CASE, THE LEGAL PROPOSITION WHICH IS SOUGHT TO BE CANVASSED BY THE ASSESSEE HAS BEEN THE SUBJECT MATTER OF CONTROV ERSY WHICH HAS BEEN FINALLY SETTLED BY THE HONBLE SUPREME COURT B Y WAY OF ITS JUDGMENT DATED 2-2-2010 IN THE CASE OF HOTEL BLUE M OON (SUPRA). THE PROCEEDINGS BEFORE THE LOWER AUTHORITIES AS WELL AS FILING OF PRESENT APPEAL BEFORE US BY THE ASSESSEE HAD CULMINATED BEF ORE THE SAID DATE AND THEREFORE, WE FIND FORCE IN THE PLEA OF THE ASS ESSEE THAT IN THE ABSENCE OF JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) THE ASSESSEE WAS PREVENTED BY A B ONA FIDE CAUSE FOR NOT RAISING THE ISSUE EARLIER. WE THEREFORE, H OLD THAT THE ADDITIONAL GROUND OF APPEAL AS RAISED BY THE ASSESSEE IS LIABL E TO BE ADMITTED FOR ADJUDICATION. 6. AT THIS STAGE, IT WAS PUT TO THE PARTIES THAT SI NCE THE ISSUE RAISED IN THE ADDITIONAL GROUND HAS NOT BEEN EXAMINED BY T HE LOWER ITA NO. 1086/PN/2005 MANE VISHNUKUMAR SHRIRANG A.Y. 2000- 01 4 AUTHORITIES, IT WOULD BE IN THE FITNESS OF THINGS T HAT THE MATTER BE RESTORED BACK TO THE FILE OF THE CIT(A) FOR PROPER ADJUDICATION THEREOF. THE LEARNED COUNSEL FOR THE ASSESSEE HOWEVER, SUBMI TTED THAT THE MATTER NEED NOT BE SENT BACK FOR ADJUDICATION AND C AN BE ADJUDICATED BY THE TRIBUNAL ON THE BASIS OF MATERIAL ON RECORD IN THIS CONNECTION OUR ATTENTION WAS ALSO INVITED TO THE AFFIDAVIT OF THE ASSESSEE DATED 28-10-2010 PLACED BEFORE THE BENCH WHEREBY IT IS AV ERRED THAT THE NOTICE UNDER SECTION 143(2) DATED 15-10-2001 CLAIME D BY THE DEPARTMENT TO HAVE BEEN SERVED ON THE ASSESSEE WITH IN THE PRESCRIBED TIME, HAS NOT BEEN RECEIVED BY THE ASSESSEE AT ALL. FOLLOWING AVERMENTS MADE IN THE AFFIDAVIT ARE RELEVANT. THE INCOME-TAX DEPARTMENT AS PER DIRECTIONS OF THE HONBLE MEMBERS HAS PRODUCED BEFORE THE HON. MEMBERS THE ORIGINAL ASSES SMENT RECORDS AND HAS ALSO GIVEN TO ME THE XEROX COPIES OF FOLLOWING DOCU MENT. I) XEROX COPY OF ALLEGED NOTICE ISSUED TO ME ON 151 0-2001 BY THE DY. CIT CIRCLE 5 PUNE U/S 143(2) OF THE ACT FOR A.Y. 20 00-01. II) XEROX COPY OF ALLEGED POSTAL ACKNOWLEDGEMENT BE ARING POSTAL STAMP OF 20-10-2001 ADDRESSED TO ME IN RESPECT OF ALLEGED REGISTERED ENVELOPE IN WHICH THE ALLEGED NOTICE WAS SENT TO ME AND THE ACK NOWLEDGEMENT BEARS SIGNATURE OF ADDRESSEE. [THE SAID SIGNATURE IS OF SOME UNKNOWN AND UNIDENTIFIED PERSON]. IT IS THE CONTENTION OF I.T. DEPARTMENT THAT THE NOTICE ISSUED U/S 143(2) OF THE ACT FOR A.Y. 200-01 REFERR ED ABOVE WAS SENT TO ME BY REGISTERED POST AND IT IS ALLEGED THAT THE SAID ACKNOWLEDGEMENT IS AN EVIDENCE THAT THE SAID NOTICE WAS PROPERLY SERVED O N ME. I STATE THAT THE SAID ALLEGED ENVELOPE/ALLEGED NOTICE WAS NEVER RECE IVED BY ME THROUGH POST OR OTHERWISE. THE SIGNATURE APPEARING ON THE SAID ACKNOWLEDGEMENT IS NOT ON ANY OF MY FAMILY MEMBERS OR EMPLOYEES AND I AM U NABLE TO IDENTIFY THE AUTHOR OF THE SAID SIGNATURE. I AM UNABLE TO TELL AS TO WHO HAS RECEIVED THE SAID ENVELOPE. I FURTHER STATE THAT I HAVE NEVER A UTHORIZED ANY PERSON TO RECEIVE THE LETTERS ON MY BEHALF FROM THE POSTAL AU THORITIES. III) XEROX COPY OF ALLEGED NOTICE ISSUED TO ME BY T HE LEARNED ITO WARD 5(4) PUNE U/S 132(2) OF THE ACT FOR A.Y. 2000-01. THE SAID NOTICE DOES NOT BEAR ANY DATE AS THE RIGHT HAND SIDE UPPER CORNER O F THE SAID NOTICE IS TORN. THE SAID NOTICE BEARS SIGNATURE OF SOME UNKNOWN AND UNIDENTIFIED PERSON UNKNOWING ALLEGED RECEIPT OF THE SAME ON 24-9-2001. I STATE THAT THE SAID ALLEGED NOTICE WAS NEVER RECEIVED BY ME EITHER PERS ONALLY OR OTHERWISE. THE SIGNATURE APPEARING ON THE SAID ALLEGED NOTICE IS NOT OF ANY OF MY FAMILY MEMBERS OR EMPLOYEES AND I AM UNABLE TO IDENTIFY TH E AUTHOR OF THE SAID SIGNATURE. I AM UNABLE TO TELL AS TO WHO HAS RECEI VED THE SAID NOTICE. I FURTHER STATE THAT I HAVE NEVER AUTHORIZED ANY PERS ON TO RECEIVE THE LETTERS/NOTICES ON MY BEHALF FROM THE INCOME-TAX OF FICE. 4. I HEREBY STOUTLY DENY THE CONTENTIONS OF THE I.T . DEPARTMENT THAT THE SAID NOTICES WERE DULY SERVED ON ME OR MY ALLEGED A UTHORIZED AGENTS. 5. I STATE AND AFFIRM THAT THE SAID NOTICES WERE NE VER RECEIVED BY ME OR ON MY BEHALF BY ANY OF MY ALLEGED AGENTS. 6. THIS AFFIDAVIT IS EXECUTED IN REBUTTAL OF THE CO NTENTIONS OF THE I.T. DEPARTMENT THAT THE ABOVE REFERRED NOTICES WERE PRO PERLY SERVED ON ME AND FOR FILING THE SAME BEFORE THE HON INCOME-TAX APPEL LATE TRIBUNAL PUNE IN HE APPELLATE PROCEEDINGS FOR THE A.Y. 2000-01 REFERRED ABOVE. ITA NO. 1086/PN/2005 MANE VISHNUKUMAR SHRIRANG A.Y. 2000- 01 5 7. THIS AFFIDAVIT IS EXECUTED AT INDAPUR ON THIS 28 TH DAY OF OCTOBER 2010. 7. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE POINTED OUT THAT THE ASSESSING OFFICER HAS FURNISHED A REPO RT WHICH CLEARLY CONTAINS AN AVERMENT THAT THE NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 15-10-2001 AND WAS SENT BY REGISTERED POST WITHI N THE TIME ON 18- 10-2001 AND IT WAS SERVED ON THE ASSESSEE ON 20-10- 2001. ON THIS BASIS IT WAS CONTENDED THAT THE STAND OF THE DEPART MENT IS THAT NOTICE SENT UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE WITHIN THE TIME PRESCRIBED IN THE STATUTE AND IN ANY CASE THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE MATT ER MAY GO BACK TO THE AUTHORITIES BELOW TO CULL OUT THE APPROPRIATE P OSITION SO AS TO ADJUDICATE THE CONTROVERSY IN ACCORDANCE WITH LAW. 8. HAVING CONSIDERED THE RIVAL SUBMISSIONS ON THIS ASPECT CAREFULLY, WE ARE INCLINED TO REMAND THIS ISSUE TO THE FILE OF THE CIT(A) TO BE ADJUDICATED AFTER CONSIDERING THE RIVAL STANDS. TH E ISSUE REGARDING PROPER SERVICE OF NOTICE U/S 143(2) OF THE ACT IS V ERY FOUNDATION OF A VALID ASSESSMENT, AS HELD BY THE HONBLE SUPREME CO URT IN THE CASE OF HOTEL BLUE MOON (SUPRA). THEREFORE, IF IT IS FOUND THAT THE NOTICE UNDER SECTION 143(2) HAS NOT BEEN ISSUED WITHIN THE PRESC RIBED PERIOD, AS CLAIMED BY THE ASSESSEE, SUCH AN OMISSION ON THE PA RT OF THE ASSESSING OFFICER WOULD HIT THE VALIDITY OF THE ASS ESSMENT MADE AND THE SAME CANNOT BE CONSTRUED AS A CURABLE INFIRMITY . IN THE INSTANT CASE, IN SO FAR AS THE ASSESSMENT ORDER IS CONCERNE D, IT DOES NOT PIN POINT THE DATE OF ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT, BUT THE ISSUANCE OF THE NOTICE AND SERVICE THEREOF IN T ERMS OF THE PRESCRIBED PROVISIONS WOULD EMERGE FROM THE RELEVAN T ASSESSMENT RECORDS. THE EXAMINATION OF SUCH RECORD, IN OUR OP INION, WOULD FACILITATE PROPER ADJUDICATION OF THE IMPUGNED GROU ND IN THE LIGHT OF THE AVERMENTS PUT FORTH BY THE ASSESSEE IN HIS AFFIDAVI T DATED 28-10-2010 ITA NO. 1086/PN/2005 MANE VISHNUKUMAR SHRIRANG A.Y. 2000- 01 6 (SUPRA). SINCE THIS FACTUAL APPRECIATION AND EXAMI NATION OF THE RECORD IS ESSENTIAL, IT WOULD BE IN THE FITNESS OF THINGS THAT BOTH THE SIDES ARE ALLOWED APPROPRIATE OPPORTUNITY TO PRESENT THEIR CA SES BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), WHO SHALL THE REAFTER ADJUDICATE THE POINT RAISED BY THE ASSESSEE IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION HERE, THE COMMISSIONER OF INCOME-TAX (APPEA LS) WOULD AFFORD ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN SUPPORT OF HIS STAND. SINCE WE HAVE SET ASIDE THE PRELIMINARY ISS UE RELATING TO THE VALIDITY OF THE ASSESSMENT TO THE FILE OF THE COMMI SSIONER OF INCOME- TAX (APPEALS), THE GROUNDS RAISED BY THE ASSESSEE R ELATING TO THE MERIT OF THE ADDITIONS ARE NOT BEING ADJUDICATED FOR THE PRESENT, AND ON SUCH ASPECTS ALSO, THE IMPUGNED ORDER OF THE COMMISSIONE R OF INCOME-TAX (APPEALS) IS SET ASIDE AND THE SAME ARE REMANDED BA CK TO THE FILE OF THE COMMISSIONER OF INCOME-TAX (APPEALS) FOR ADJUDI CATION AFRESH. IN THE FINAL ANALYSIS, THE ORDER OF THE COMMISSIONER O F INCOME-TAX (APPEALS) IS SET-ASIDE AND THE APPEAL IS RESTORED B ACK TO THE FILE OF THE COMMISSIONER OF INCOME-TAX (APPEALS) TO BE ADJUDICA TED AFRESH IN ACCORDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF MAY 2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 11 TH MAY, 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. MR MANE VISHNUKUMAR SHRIRANG, INDAPUR 2. ITO WD 5(4), PUNE 3. THE CIT(A) II PUNE 4. THE CIT III, PUNE 5. THE D.R, A BENC H, PUNE 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE ITA NO. 1086/PN/2005 MANE VISHNUKUMAR SHRIRANG A.Y. 2000- 01 7