Sh. Harish Kumar Agarwal, New Delhi V. ITO, New Delhi

ITA 1092/DEL/2014

• Counselvise Citation: 109220114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 02-07-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 26-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Assessee Lawyers: DEEPAK OSTWAL
• Keywords: Opportunity of being heard; Reason to believe
• Section: 147; 148; 144; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO S . - 1092 & 1093 /DEL/201 4 (ASSESSMENT YEAR - 200 2 - 03 ) HARISH KUMAR AGARWAL, 14B/23, 1 ST FLOOR, DEV NAGAR, KAROL BAGH, NEW DELHI - 110005. PAN - ADSPA2744C ( APPELLANT) VS ITO, WARD - 33(1), NEW DELHI (RESPONDENT ) APPELLANT BY SH.DEEPAK OSTWAL, ADV. RESPONDENT BY SH.GAGAN SOOD, SR.DR ORDER THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINST THE TWO SEPARATE ORDER S DATED 18.11.2013 OF CIT(A) - XVII, DELHI PERTAINING TO 2002 - 03 ASSESSMENT YEAR IN T H E QUANTUM AND THE PENALTY PROCEEDINGS RESPECTIVELY . ADDRESSING THE QUANTUM APPEAL FIRST, T HE LD.AR AT THE TIME OF HEARING INVITED ATTENTION TO GROUND NO. - 4 WHICH READ S AS UNDER: - 4. THAT HAVING REGARD TO FACTS AND CIRCUMSTANCES OF THE CASE, RESPONDENT HAS ERRED IN FRAMING IMPUGNED ASSESSMENT ORDER WITHOUT ISSUING MANDATORY STATU TORY NOTICE U/S 143(2). THE IMPUGNED ORDER OUGHT TO HAVE BEEN SET ASIDE BY CIT(A) AND FAILURE TO DO SO HAS VITIATED THE IMPUGNED ORDER. 2. HOWEVER, BEFORE PROCEEDINGS TO CONSIDER THE SAME IT IS SEEN THAT THE REGISTRY HAS POINTED OUT A DELAY OF ONE DAY I N EACH OF THESE APPEALS FILED. THE LD.AR WAS DIRECTED TO FIRST ADDRESS THE SAME. R EFERRING TO THE AFFIDAVIT DATED 20.06.2015 FILED BY THE ASSESSEE , THE LD. AR SUBMITTED THAT THE DELAY HAS OCCURRED IN HIS OFFICE AS THE ASSESSEE S APPEAL AFTER DUE SIGNATUR E ETC. HAD BEEN SIGNED AND DELIVERED TO HIS OFFICE WITHIN 60 DAYS AS THE SAME WAS SIGNED AND PREPARED ON 21.02.2014 AND THE APPEAL FEE WAS PAID ON 24.02.2014. HOWEVER, THE COU N SEL MISTAKENLY CALCULATED THE NUMBER OF DAYS OF TWO MONTHS INSTEAD OF 60 DAYS A ND FILED THE APPEALS LATE BY ONE DAY ON 26.02.2014. A CCORDINGLY IN THE DATE OF HEARING 02 .0 7 .2015 DATE OF PRONOUNCEMENT 14 .0 8 .2015 I.T.A .NO. - 1092 & 1093/ DEL/2014 PAGE 2 OF 4 CIRCUMSTANCES IT WAS HIS PRAYER THAT THE DELAY OF ONE DAY IN BOTH THE APPEALS MAY BE CONDONED. THE SAID PRAYER ON FACTS WAS NOT OBJECTED TO BY THE LD. SR.DR. IN VIEW OF THE ABOVE PEC ULIAR FACTS AND CIRCUMSTANCES ACCEPTING THE EXPLANATIONS OFFERED THE DELAY OF ONE DAY IN EACH OF THESE TWO APPEALS IS CONDONED AND THE APPEALS ARE DECIDED ON MERITS. 2.1. ADDRESSING THE AFORE - MENTIONED GROUNDS, THE LD.AR SUBMITTED T HAT IN THE FACTS OF THE PRESENT CASE THE MANDATORY STATUTORY NOTICE U/S 143(2) HAD NOT BEEN ISSUED. REFERRING TO THE FACTS IT WAS HIS SUBMISSION THAT A PERUSAL OF THE ASSESSMENT ORDER ITSELF BRINGS OUT THIS FACT. IN THESE CIRCUMSTANCES IT WAS HIS SUBMISS ION THAT WHERE THE ASSESSEE HAD FURTHER AGITATED THAT SATISFACTION OF THE JCIT IN TERMS OF SECTION 151(2) OF THE INCOME TAX ACT, 1961 HAD NOT BEEN OBTAINED. ACCORDINGLY IN THE CIRCUMSTANCES IT WAS HIS LIMITED PRAYER THAT THE ISSUE MAY BE SET ASIDE FOR VE RIFICATION ON FACTS . T HE FINDING OF THE CIT(A) IN PARA 6.2 , IT WAS SUBMITTED CANNOT BE SUSTAINED IN THE FACE OF SETTLED LEGAL POSITION ON THE ISSUANCE OF NOTICE. IN T H E CIRCUMSTANCES SETTING ASIDE THE FINDING , THE CIT(A) MAY BE DIRECTED TO RETURN A POSIT IVE FINDING AS INCASE THE NECESSARY PROCEDURAL REQUIREMENTS HAVE NOT BEEN FULFILLED , T HE ASSESSMENT HAS TO BE QUASHED. IT WAS HIS SUBMISSION THAT ALTHOUGH ON MERIT ALSO THE ASSESSEE HAS A VERY GOOD CASE BUT HE WOULD INSIST THAT THE JURISDICTIONAL ISSUES B E DECIDED FIRST . THE LD. SR.DR CONSIDERING THE FACT S OF THE CASE SUBMITTED THAT HE HAS NO OBJECTION IF THE CIT(A) VERIFIES WHETHER THE NECESSARY APPROVAL ETC HA S BEEN OBTAINED OR NOT. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE RELEV ANT FACTS OF THE CASE ARE THAT THE ASSESSMENT ORDER IN THE CASE OF THE ASSESSEE HAS BEEN PASSED U/S 144 WHEREIN IN RESPONSE TO NOTICE U/S 148, NO RETURN OF INCOME WAS FILED. RELYING UPON THE INFORMATION RECEIVED AS A RESULT OF INQUIRIES IN THE CASE OF SH. ASHOK KUMAR CHAUHAN, PROPRIETOR M/S GURCHARAN JEWELLERS, AN ADDITION OF RS. 4,80,000/ - WAS MADE IN THE HANDS OF THE ASSESSEE. 3.1. IN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY, APART FROM ASSAILING THE IMPUGNED ORDER ON VARIOUS GROUNDS ON MERIT THE ASSESSEE HAD ALSO ASSAILED , T HE DEPARTMENTAL ACTION ON JURISDICTION , ALLEGING THAT NECESSARY APPROVAL OF JCIT U/S 151(2) HAD NOT BEEN OBTAINED. THESE SUBMISSIONS ARE FOUND RECORDED IN PARA 6 & 6.1. THE ISSUANCE OF NOTICE IS BROUGHT OUT FROM THE FOLLOWING EXTRACT OF THE ASSESSMENT ORDER : - I.T.A .NO. - 1092 & 1093/ DEL/2014 PAGE 3 OF 4 NOTICE UNDER SECTION 148 READ WITH SECTION 147 WAS ISSUED, IN THIS CASE, ON 23/03/2007, AND SERVED UPON THE ASSESSEE BY SPEED POST ON 28/03/2007, AS THE UNDERSIGNED HAD REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. NO RETURN OF INCOME WAS HOWEVER FILED IN RESPONSE TO NOTIC E U/S 148. SUBSEQUENTLY, A NOTICE U/S 142(1) WAS ISSUED ON 11/06/2007 CALLING FOR RETURN OF INCOME AND DETAILED INFORMATION. THE NOTICE WAS RECEIVED BACK UNSERVED WITH POSTAL REMARKS LEFT . ACCORDINGLY, THE INSPECTOR OF INCOME TAX WAS DEPUTED TO MAKE E NQUIRIES AND SERVE NOTICE U/S 142(1) ON 10/10/2007 CALLING FOR RETURN OF INCOME AND DETAILED INFORMATION LISTED THEREIN. THE INSPECTOR HAS REPORTED THAT THE ASSESSEE VACATED THE PREMISES WHICH WAS A ONE ROOM FLAT AT 203 - D, ISHWAR APARTMENTS ALMOST FIVE YE ARS AGO. CONSEQUENTLY, THE NOTICE WAS SERVED BY AFFIXTURE AND REPORT PLACED ON RECORD. SINCE THIS IS A TIME BARRING CASE, I HAVE NO OPTION BUT TO COMPLETE THE ASSESSMENT EX - PARTE TO THE BEST OF JUDGEMENT. 3.2. THE OBJECTIONS BEFORE THE CIT(A ) ON THE LA CK OF APPROVAL OF THE JCIT IN TERMS OF SECTION 151(2) ARE FOUND ADDRESSED IN PARA 6.2 AND READ AS UNDER: - 6.2 . THE AO DID NOT HAVE THE REQUISITE RECORDS IN HIS POSSESSION AND THEREFORE DID NOT KNOW THAT THE ORDER U/S 143(3) HAD BEEN COMPLETED. THEREFORE, APPROVAL OF THE JOINT/ADDL. COMMISSIONER WAS NOT OBTAINED BEFORE ISSUE OF NOTICE U/S 148. I WOULD SAY IT WAS A LAPSE NO DOUBT BUT NOT ONE WHICH WOULD RENDER THE ASSESSMENT INVALID. THE GROUND OF APPEAL IS THEREFORE RULED AGAINST THE APPELLANT. (EMPHAS IS PROVIDED) 4. IN THE AFORE - MENTIONED PECULIAR FACTS AND CIRCUMSTANCES, IN THE LIGHT OF THE SUBMISSIONS BY THE PARTIES BEFORE THE BENCH, IT IS DEEMED APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER DIRECTING THE LD. CIT(A) TO FIRST DECIDE THE JURISDICTIONAL ISSUE AND IN THE EVENTUALITY THE NECESSARY PROCEDUR AL REQUIREMENTS ARE FOUND NOT TO HAVE BEEN FULFILLED , T HEN THE NECESSARY CONSEQUENCES IN LAW FOLLOW. HOWEVER I N ORDER TO DECIDE THE ISSUE THE FACTS NEED TO BE VERIFIED . ACCORDINGLY IN VIEW OF THE ABOV E THE ISSUE IS RESTORED BACK TO THE FILE OF THE LD.CIT(A) TO DO THE NECESSARY EXERCISE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. IN THE EVENTUALITY THE JURISDICTIONAL ISSUE IS DECIDED AGAINST THE ASSESSEE THE CIT(A) SHALL THEN PROCEED TO CONSIDER THE ISSUE ON MERIT AS THE ENTIRE ORDER IS SET ASIDE. ACCORDINGLY THE APPEAL OF THE ASSESSEE I.E ITA N O. - 1092/DEL/2014 IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A .NO. - 1093 /DEL/201 4 5. BY THE PRESENT AP PEAL THE ASSESSEE ASSAILS THE CORRECT NESS OF THE ACTION OF THE CIT(A) IN UPHOLDING THE PENALTY IMPOSED BY THE AO AMOUNTING TO RS. I.T.A .NO. - 1092 & 1093/ DEL/2014 PAGE 4 OF 4 1,15,260/ - AS A RESULT OF THE ADDITION MADE IN THE ASSESSMENT ORDER WHICH WAS CONFIRMED IN APPEAL. IT WAS HIS SUBMISSION THAT SINCE THE VERY EXISTENCE OF THE ORDER I S IN QUESTION ON MERIT THE IMPUGNED ORDER MAY ALSO BE RESTORED BACK TO THE FILE TO T H E CIT(A ) . CONSIDERING THE FACT THAT THE VALIDITY OF THE ORDER IN QUANTUM PROCEEDINGS IS INFLUX AND THE ORDER HAS BEEN RESTORED TO THE CIT(A) ACCORDINGLY, FINDING MERIT IN THE ARGUMENTS OF THE LD. AR WHICH WAS NOT OBJECTED TO THE LD. SR.DR THE IMPUGNED ORDER IN PENALTY PROCEEDINGS IS SET ASIDE AND THE LD.CIT(A) IS DIRECTED TO PASS A SPEAKING ORDER AFTER HEARING THE ASSESSEE ON THE CO NCLUSION OF THE QUANTUM PROCEEDINGS. 6 . IN THE RESULT, THE APPEAL S OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 14 TH OF AUGUST, 2015. SD/ - (DIVA SINGH) JUDICIAL MEMBER DATED: 14 /08 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI