The ACIT, Central Circle-2(2), Ahmedabad V. Nexus Software Ltd., Baroda

ITA 1258/AHD/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0289 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS VIBHA BHALLA
• Assessee Lawyers: PF JAIN
• Keywords: Period of limitation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .. , , BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.1258/AHD/2012 ( / ASSESSMENT YEAR : 2008-09) ASST.CIT CENTRAL CIR-2(2) AHMEDABAD / VS. NEXUS SOFTWARE LTD. 2, SUVARNAPURI SOCIETY NAVA BAZAR KARJAN, DIST. BARODA $ ./ ./ PAN/GIR NO. : AAACC 6794 K ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : MRS. VIBHA BHALLA, CIT-DR ($'*) / RESPONDENT BY : MR. P.F. JAIN, AR + ,*-. / DATE OF HEARING 05/10/2016 /012*-. / DATE OF PRONOUNCEMENT 18/10/2016 / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-III, BARODA DAT ED 20/03/2012 FOR THE ASSESSMENT YEAR (AY) 2008-09. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE IN DECLARING THE WHOLE AS SESSMENT AS INVALID. ITA NO.1258/AHD /2012 ACIT VS. NEXUS SOFTWARE LTD. ASST.YEAR 2008-09 - 2 - 2. IN THE PROCESS, THE LD.CIT(A) FAILED TO TAKE JUDICI AL NOTICE OF PROVISIONS OF SECTION 251 OF THE I.T.ACT, WHEREIN, IT HAS BEEN LAID DOWN THAT IN AN APPEAL AGAINST THE ORDER OF AS SESSMENT, THE CIT(A) MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE AS SESSMENT. THE LD.CIT(A) HAS NO POWERS TO DECLARE THE ASSESSME NT INVALID. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- 2.1. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF SHARES. ASSESSEE ELECTRONICAL LY FILED ITS RETURN OF INCOME ON 30/09/2008 DECLARING TOTAL INCOME AT RS.3 1,879/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') VIDE ORDER DATED 30/12/2010 AND THE TOTAL I NCOME WAS DETERMINED AT RS.11,88,35,320/-. AO NOTICED FROM THE ASSESSE ES BALANCE-SHEET THAT ITS OPENING CASH BALANCE OF AS ON 01/04/2007 WAS RS .21,099/-. THOUGH THE ASSESSEE DID NOT PRODUCE ITS BOOKS OF ACCOUNT F OR VERIFICATION, FROM THE COPIES OF VARIOUS LEDGERS FURNISHED BY THE ASSE SSEE COMPANY IN THE COURSE OF ASSESSMENT PROCEEDINGS, VARIOUS CASH TRAN SACTIONS WERE FOUND TO HAVE BEEN MADE BY THE ASSESSEE-COMPANY DURING TH E PERIOD 01/04/2007 TO 1/03/2010 AND ON THE BASIS OF THE SAM E ITS CASH BOOK WAS CAST. AGGRIEVED BY THE ORDER OF THE ASSESSING OFF ICER (AO), ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO VIDE O RDER DATED 20/03/2012(IN APPEAL NO.CAB/III-225/10-11) ALLOWED THE APPEAL OF THE ITA NO.1258/AHD /2012 ACIT VS. NEXUS SOFTWARE LTD. ASST.YEAR 2008-09 - 3 - ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 3. BEFORE US, LD.CIT-DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN HIS ACTION. ON THE OTHER HAND, LD.AR SUPPORTED THE ORDER THE ORDER OF THE LD.CIT(A ) AND REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE LD.CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE, ASSESSEE HAS TAKE LEGAL GROUND WITH R EGARD TO SERVICE OF NOTICE WHICH WAS NOT LEGALLY SERVED UPON THE ASSESS EE, WHEREAS LD.CIT- DR RELIED ON REMAND REPORT OF THE DEPARTMENT AT PAR A-4.2 OF THE ORDER OF THE LD.CIT(A) WHEREIN STATED THAT IN THIS REGARD IT WAS SUBMITTED THAT THE CASE OF THE ASSESSEE HAS BEEN TRANSFERRED TO THE UN DERSIGNED BY ITO WARD-4(1), BARODA CONSEQUENT TO THE CENTRALIZATION ORDER PASSED BY THE CIT-II, BARODA ON 29.0-9.2011. THE ISSUE REGARDING SERVICE OF THE NOTICE U/S.143(2) OF THE I.T.ACT, 1961, HAS BEEN REMANDED TO THE UNDERSIGNED. IN THIS REGARD, IT IS SUBMITTED THAT A NOTICE WAS I SSUED TO THE ASSESSEE- COMPANY ON 29/09/2009 AT THE ADDRESS RECORDED BY TH E ASSESSEE IN ITS RETURN OF INCOME FILED FOR THE RELEVANT ASSESSMENT YEAR VIDE SPEED POST NO.BDQ/BDR-BNPL-161/21-4 DATED 30/09/2009. HOWEVER , THE ACKNOWLEDGEMENT OF THE SAME IS NOT AVAILABLE ON REC ORD. ACCORDINGLY, ITA NO.1258/AHD /2012 ACIT VS. NEXUS SOFTWARE LTD. ASST.YEAR 2008-09 - 4 - THE MATTER WAS TAKEN UP WITH ITO, WARD-4(1), BARODA . THE ITO VIDE ITS LETTER DATED 08/02/2012 HAS INTIMATED THAT NOTICE W AS ACCEPTED BY POSTAL AUTHORITIES FOR DISPATCH ON 30/09/2009 AND IT WAS ALSO MENTIONED BY THE DEPARTMENT THAT ASSESSEE-COMPANY HAS BEEN CHANGING ITS ADDRESS FREQUENTLY WITHOUT INTIMATING THE CHANGE OF ADDRESS TO THE A.O. THE ISSUE HAS BEEN DULY RECORDED IN PARA-C OF THE ASS ESSMENT ORDER PASSED U/S.143(3) OF THE ACT ON 30/12/2010 AND AS PER THE DEPARTMENT IT WAS CLEAR THAT NOTICE U/S.143(2) WAS DULY SERVICED ON T HE ASSESSEE THROUGH SPEED POST WITHIN THE TIME PRESCRIBED UNDER THE ACT AT THE ADDRESS RECORDED BY THE ASSESSEE IN ITS RETURN OF INCOME. THEREFORE, THE GROUND TAKEN BY THE ASSESSEE THAT THE NOTICE ISSUED U/S.14 3(2) OF THE ACT WAS NOT SERVED UPON HIM ON TIME WAS INCORRECT. THE ASSESSE E RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF NULON INDIA LTD. VS. ITO (323 ITR 681). AS PER THE SAID DECISION, THE H ONBLE HIGH COURT NARRATED THAT THE NOTICE U/S.143(2) DATED 29/10/200 2 WAS SENT TO THE ASSESSEE BY SPEED POST ON 30/10/2002. FURTHER THE HONBLE COURT HELD THAT THERE IS NO PRESUMPTION UNDER THE LAW THAT ANY NOTICE SENT BY SPEED POST MUST BE DELIVERED TO THE ASSESSEE WITHIN 24 HO URS AND HENCE, IN THE ABSENCE OF ANY MATERIAL ON RECORD IT COULD NOT BE S AID TO HAVE SERVED WITHIN LIMITATION. SIMILARLY, HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS INDERPAL MALHOTRA REPORTED IN 171 TAXMAN 35 9 (DELHI) HAS HELD THAT WHERE A NOTICE U/S.143(2) WAS ISSUED BY REGIST ERED POST ON THE LAST DAY OF PERIOD OF LIMITATION, THERE IS NO WAY THAT T HE NOTICE COULD HAVE ITA NO.1258/AHD /2012 ACIT VS. NEXUS SOFTWARE LTD. ASST.YEAR 2008-09 - 5 - BEEN RECEIVED BY THE ASSESSEE ON THE SAME DAY UNLES S THE NOTICE WAS SENT BY HAND, WHICH IS NOT SO IN THE PRESENT CASE. THE COURT HAS FURTHER STATED THAT IN CIT VS. VARDHMAN ESTATE (P.) LTD. (2006) 28 7 ITR 368 (DELHI), A NOTICE WAS SENT BY SPEED POST ONE DAY BEFORE THE PE RIOD OF LIMITATION WAS TO EXPIRE THAT IS, ON 30/10/2002 AND THE CONTENTION URGED BY THE REVENUE IN THAT CASE WAS THAT THE NOTICE SENT SHOULD BE DEE MED TO HAVE BEEN SERVED ON THE ASSESSEE. THIS ARGUMENT WAS REJECT ED BY THIS COURT AND IT WAS MADE CLEAR THAT WHAT IS REQUIRED BY THE STATUTE IS NOT MERELY THE DISPATCH OR ISSUANCE OF THE NOTICE BUT ITS ACTUAL S ERVICE. 5. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE C ONSIDERED OPINION AND HOLD THAT NOTICE U/S.143(2) WAS NOT SERVED UPON THE ASSESSEE LEGALLY AND THEREFORE APPEAL OF THE DEPARTMENT IS NOT TENAB LE AND THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18/10/2016 SD/- SD/- .. ( ) () ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 18/ 10 /2016 6...,.../ T.C. NAIR, SR. PS ITA NO.1258/AHD /2012 ACIT VS. NEXUS SOFTWARE LTD. ASST.YEAR 2008-09 - 6 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 78- + 9- / CONCERNED CIT 4. + 9- ( ) / THE CIT(A)-III, BARODA 5. :;<-78 , .782 , / DR, ITAT, AHMEDABAD 6. <=>, / GUARD FILE. / BY ORDER, (:-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 6.10.2016 (DICTATION-PAD 5 PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 6.10.2016/10.10.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.18.10.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18.10.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER