Ms. Balvinder Kaur Nijjar, United Kingdom V. Asstt. Director of Income Tax, Chandigarh

ITA 1262/CHANDI/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5108 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 02-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS CHANDER KANTA
• Keywords: Opportunity of being heard
• Section: 142(1); 148; 144; 90

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 1262 TO 1264/CHD/2016 A.YS: 2008-09 TO 2010-11 MS. BALWINDER KAUR NIJJAR, VS. THE ASSTT. DIRECTOR OF INCOME TAX WIFE OF SHRI BHUPINDER SINGH NIJJAR, (INTERNATION AL TAXATION), 35, LODGEROAD, WALSALL WEST MIDLAND, CHANDIGARH. UNITED KINGDOM. PAN NO. AKAPN8019L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : MRS. CHANDERKANTA, SR.DR DATE OF HEARING : 22.05.2017 DATE OF PRONOUNCEMENT : 08.06.2017 ORDER PER MS. DIVA SINGH,JM BY THE PRESENT THREE APPEALS PERTAINING TO 2008-09, 20 09-10 AND 2010-11 ASSESSMENT YEARS FILED BY THE ASSESSEE, THE COR RECTNESS OF THE CONSOLIDATED ORDER DATED 27.09.2016 OF LD. CIT(A)-43 NEW DE LHI IS ASSAILED ON VARIOUS GROUNDS INCLUDING GROUND NO.1 WHICH IS ID ENTICAL IN ALL THE YEARS. THE SAME IS REPRODUCED FROM ITA 1262/CHD /2016 HEREUNDER : THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ISSUANCE OF NOTICE UNDER SECTION 148 AND THEREAFTER FRAMING AN EX-PARTE ASSESSMENT WITHOUT COMPLYING WITH THE REQUIREMENTS OF SECTION 148 OF T HE ACT WHICH IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 2. THE LD. AR INITIALLY HAD SOUGHT TIME TO FILE A PAPER BOOK SO AS TO ADDRESS THE FACTUAL ASPECTS AS FULL FACTS WERE STATED TO BE NOT AVAILABLE. IN ORDER TO ADDRESS THE SAID REQUEST, THE PARTIES WER E REQUIRED TO FIRST BRING OUT WHAT FACTS RELATING TO GROUND NO. 1 WERE AVAILABLE ON RECO RD. IN RESPONSE TO THE SAME, LD. AR SUBMITTED THAT THE ASSESSE E HAD RAISED THREE SPECIFIC GROUNDS ON THE JURISDICTION ASPECT BEFORE THE CIT(A) AND THE LD. CIT(A) AFTER ADDRESSING THE FACTS RELATING TO THE SA ME IN PARA 4.1 OF HIS ORDER WHEREIN THOUGH THE SUBMISSIONS OF THE ASSESS EE ARE CONSIDERED, HOWEVER, CONCLUDED IN PARA 4.4 THAT THERE WAS A VALID SERVICE 2 OF NOTICE. IT WAS HIS SUBMISSION THAT THE ASSESSEE HAD STATED THAT 10, OLD JAIL ROAD, AMRITSAR WAS NOT THE ADDRESS OF THE ASSESS EE AND THE CORRECT ADDRESS OF THE ASSESSEE IS 35 LODGE ROAD, WALSA LL WEST MIDLAND, U.K.-W553TY. THUS, THE CONCLUSION THAT IT WAS A VALID NOTIC E WAS NOT CORRECT ON FACTS. THE LD. SR.DR, ON THE OTHER HAND, SUBMIT TED THAT NOTICE WAS SERVED BY AFFIXTURE AT THE ADDRESS PROVIDED BY THE ASSESSEE IN THE BANK ACCOUNT OPENING FORM THAT IT WAS HIS SUBMISSION THA T IT WAS A VALID SERVICE OF NOTICE. CONSIDERING THE FACT THAT THE IMPUGNED ORDER ON THIS ASPECT IS NOT A SPEAKING ORDER, AS REFERENCE HAS BEEN M ADE TO THE FACT THAT SERVICE IS BY WAY OF AFFIXTURE DATED 25.03.2013 AT TH E ADDRESS WHICH IS STATED TO BE IN THE BANK ACCOUNT OPENING FORM. HOWE VER, WE NOTE THAT NO REFERENCE IN THE ASSESSMENT ORDER PASSED U/S 144 IS MADE TO THE SPECIFIC BANK LET ALONE THE SAVING BANK ACCOUNT NUMBER. A CCORDINGLY, AFTER HEARING THE PARTIES, A PRIMA-FACIE VIEW WAS FORMED THA T THE ISSUE HAS TO BE RESTORED ON ACCOUNT OF SCARCITY OF RELEVANT FACTS. THE LD. AR ACCEPTING THE SUGGESTION MADE A PRAYER THAT IT MAY BE RESTORED TO THE AO. THE LD. SR.DR MADE A VEHEMENT PRAYER THAT IT SHOULD BE RESTORED TO LD. CIT(A). CONSIDERING THE DEPARTMENTS OBJECTION, THE LD. A R AGREED THAT THE ISSUE MAY BE REMANDED TO THE CIT(A), HOWEVER, PERMISS ION TO FILE FRESH EVIDENCES, IT WAS SUBMITTED, MAY BE GRANTED. CONSIDE RING THE FACTS OF THE CASE, THE SAID REQUEST WAS NOT OPPOSED BY THE SR.DR. 3. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. A PERUSAL OF THE ASSESSMENT ORDER SHOWS TH AT ASSESSEE IS CONSIDERED TO BE A PERMANENT RESIDENT OF U.K. HOLDING BRITI SH PASSPORT AND HAS BEEN VISITING INDIA AND INVESTING IN PROPERTIES AN D HAS EARNED INCOME FROM ASSURED RETURNS FROM THE INVESTMENTS MADE IN THE PROPERTIES. THE RECORD SHOWS THAT AS PER INFORMATION O BTAINED FROM M/S OMAXE LTD., NEW DELHI, THE NATURE OF PAYMENT WAS CONSIDERE D TO BE OTHER SUMS AND TAX HAS BEEN DEDUCTED AT SOURCE BY M /S OMAXE LTD. AT 15% BY TAKING INTO CONSIDERATION ARTICLE 12 OF THE DTCC WIT H U.K. AND SECTION 90 OF THE INCOME TAX ACT,1961. AS PER THE INFO RMATION AVAILABLE ON RECORD, THE TOTAL ASSURED RETURN RECEIVED BY THE AS SESSEE WAS RS. 5,53,392/- ON WHICH, IN THE FINANCIAL YEAR 2007-08, RS. 94,080 /- TDS HAD BEEN DEDUCTED. THE FACTS RELATABLE TO GROUND NO. 1 FOUND DISCUSSED IN THE ASSESSMENT ORDER, HAVE BEEN EXTRACTED IN PAR A 4.1 OF 3 THE IMPUGNED ORDER AND READ AS UNDER : NOTICE U/S 148 OF THE IT ACT, 1961 WAS ISSUED TO T HE ASSESSEE ON 05.03.2013 AFTER RECORDING THE REASONS. THE NOTICE WAS SERVED UPON THE ASSESSEE THROUGH AFFIXTURE NOTICE ON 25.03.2013 AT THE ADDRESS OF THE ASSESSEE AS PROVIDED IN THE BANK ACCOUNT OPENING FORM. FURTHER SINCE NO RETURN WAS FILED IN RESPONSE TO TH E NOTICE U/S 148, NOTICE U/S 142(1) WAS ISSUED TO THE ASSESSEE ON 23.05.2013 AND 19.02.2014 REQUESTING HER TO FILE THE RETURN, HOWEVER NEITHER ANY REPLY WAS FILED NOR ANY RETURN WAS FILED. A SHOWCAUSE U/S 144 WAS ISSUED AND SERVED UPON THE ASSESSEE AND A LAST OPPORTUNITY WAS PROVIDED FOR 21.03.2014, HOWEVER AGAIN NEITHER ANY REPLY WAS FIL ED NOR DID ANYBODY ATTEND. HENCE IN THE LIGHT OF ABOVE CIRCUMSTANCES ORDER U/S 144 OF T HE IT ACT IS BEING PASSED AS THIS IS A TIME LIMITATION MATTER AND ALSO THE ASSESSEE HAS NO T COOPERATED IN THE ASSESSMENT PROCEEDINGS AT ANY POINT OF TIME. 4. THE ASSESSEE ASSAILED THE SERVICE OF NOTICE AT THE SAID ADDRESS ON THE BASIS OF THE FOLLOWING ARGUMENTS : 'IT IS SUBMITTED THAT THE ASSESSEE NEVER RESIDED AT 10,OLD JAIL ROAD, AMRITSAR. AS SUCH, THERE HAS BEEN NO SERVICE OF NOTICE UNDER SECTION 148 WHICH RENDERS THE ASSESSMENT AS ILLEGAL THERE IS A JURISDICTI ONAL DEFECT IN THE FRAMING OF ASSESSMENTS WHICH CANNOT BE CURED EVEN BY RESORTING TO THE PROVISIONS OF SECTION 292BB. THE ADDRESS AS APPEARING IN THE RECORDS OF T HE DEPARTMENT IN FORM 26AS IS 6,PADDOCK GARDENS, WALSALL, GB WS53NZ WHICH ADDR ESS IS ALSO APPEARING IN THE ASSESSMENT ORDER THERE HAS BEEN NO EFFORT, MAD E BY THE ASSESSING OFFICER TO SERVE NOTICES AT THE ADDRESS AS AVAILABLE IN THE RE CORDS OF THE DEPARTMENT. THERE IS NO ESCAPEMENT OF INCOME AS THE ASSESSEE IS NOT OBLIGED TO FILE THE RETURN OF INCOME AS THE ASSESSEE HAS NOT RECEIVED, THE INCOME AS MENTIONED IN THE BODY OF THE ASSESSMENT ORDER. EVEN OTHERWISE, ONLY FOR ARGU MENT SAKE, THE INCOME AS COMPUTED BY THE ASSESSING OFFICER IS TAKEN; TAXES H AVE ALREADY BEEN DEDUCTED IN EXCESS OF THE DUE TAXES. AS SUCH, RESORT TO THE PROVISIONS OF SECTION 148 IS ILLEGAL AND UNCALLED FOR. FURTHER, THE ASSESSMENT HAS BEEN FRAMED UNDER SECTION 144. AS ALREADY SUBMITTED, THE ASSESSEE HAS NOT BEEN SERVED UPON AN Y NOTICE WHATSOEVER. IN THE ABSENCE OF NON SERVICE OF ANY NOTICE, THE ASSESSEE COULD NOT HAVE APPEARED BEFORE THE ASSESSING OFFICER. EVEN IF THE ASSESSMEN T HAS TO BE FRAMED UNDER SECTION 144, IT IS THE DUTY OF THE ASSESSING OFFI CER TO CONSIDER ALL RELEVANT MATERIAL GATHERED AND THEN PASS AN APPROPRIATE ORDE R. IN THE INSTANT CASE, THE ASSESSING OFFICER HAS MERELY RELIED UPON SOME INFOR MATION AVAILABLE AND HAS TREATED THE ALLEGED ASSURED RETURN OF RS.5,53,392/- /- HAVING BEEN RECEIVED FROM M/S OMAXE AS THE INCOME OF THE ASSESSEE. HE HAS FAI LED, TO CONSIDER THE BANK STATEMENTS TO SEE WHETHER ANY INCOME HAS BEEN CREDI TED. SECONDLY FORM 26AS WHEREIN THE DETAILS OF INCOME AND TAX THEREON HAS B EEN DEDUCTED BY THE DEDUCTOR SHOWS AN INCOME OF RS.46,116/- ONLY ON WHICH A TAX OF RS.7,840/- HAS BEEN DEDUCTED. THE ASSESSING OFFICER RELYING ON EXTRANEOUS MATERIAL WITHOUT REFERRING TO THE BASIC DOCUMENTS IS NOT IN THE SPIRIT OF SECTION 144 RENDERS THE ASSESSMENT VOID. COPY OF FORM 26 AS AS DOWNLOADED AS RECENT AS 19 TH OF MAY 2016 IS ANNEXED HEREWITH. PERUSAL OF THE SA ME SHOWS THAT THE ASSESSEE HAS AN INCOME OF RS.46,116/-AND TAX OF RS. 7,840/- HAS BEEN DEDUCTED. BUT WHILE FRAMING THE ASSESSMENT, T HE ASSESSING OFFICER HAS TAKEN THE INCOME AT RS.4,61,160/- ON WHICH TD S OF RS.94,080/- HAS BEEN DEDUCTED. THUS, CONSIDERING THE AFOREMENTIONED SUBMISSIONS, I T IS PRAYED THAT THE ASSESSMENT FRAMED MAY PLEASE BE ANNULLED ON LEGAL I SSUES ITSELF. 4.1. THE JURISDICTION WAS UPHELD BY THE CIT(A) WITHOUT ADDRE SSING THE SPECIFIC ARGUMENTS OF THE ASSESSEE. THE LD. AR IN THE COUR SE OF THE 4 HEARING HAS STATED THAT THE SPECIFIC ADDRESS TAKEN NOTE OF BY THE DEPARTMENT I.E. 10, OLD JAIL ROAD, AMRITSAR WAS THE ADDRESS PROVIDED LONG TIME BACK WHILE OPENING AN ACCOUNT IN PUNJAB NATION AL BANK, AMRITSAR. IT WAS HIS SUBMISSION THAT THE ASSESSEE HAS FILE D CRIMINAL COMPLAINTS AS THE AMOUNTS DEPOSITED AND WITHDRAWN ETC. IN THE SAID BANK ACCOUNT BY SOME MR. A.K.UPPAL HAVE BEEN DONE WITHO UT THE KNOWLEDGE OF THE ASSESSEE. THE ISSUE HAS BEEN CARRIED RIG HT UPTO THE APEX COURT. THUS, IT WAS ARGUED THAT THE ADDRESS AT WH ICH THE NOTICE IS STATED TO HAVE BEEN SERVED BY WAY OF AFFIXTURE, WAS NEV ER THE ADDRESS AT WHICH THE ASSESSEE HAS RESIDED. THIS ASPECT, IT WAS SUBM ITTED HAS BEEN ARGUED BEFORE THE CIT(A) AND HAS NOT BEEN CONSIDERED WH ILE ARRIVING AT A FINDING. ON CONSIDERING THE SUBMISSIONS, WE FIND THAT NONE OF THESE FACTS ARE COMING OUT FROM THE RECORD. IN FACT, THE TAX A UTHORITIES HAVE NOT EVEN CARED TO MENTION THE SPECIFIC BANK OR THE CITY WHERE THE ASSESSEE HAS OPENED AN ACCOUNT AND WHAT IS THE SPECIFIC SAVING BANK ACCOUNT NUMBER. THUS, THE OCCASION TO CONSIDER THE RELE VANCE OF THE ADDRESS WOULD ALSO NEED TO HAVE FACTS SHOWN ON WHICH DA TE THE ACCOUNT WAS OPENED. THUS, ADMITTEDLY FULL FACTS ARE NOT ON RECORD . WE ALSO NOTE THAT REFERENCE IS MADE TO THE FACT THAT SERVICE IS BY WA Y OF AN AFFIXTURE. IT MAY NOT BE OUT OF PLACE TO REFER TO THE LEGAL POSITION T HAT SERVICE BY WAY OF AFFIXTURE IS THE LAST RESORT. IT IS NOT THE NORMAL MODE OF SERVICE AND IS RESORTED TO ONLY WHERE ALL ATTEMPTS TO SERVE NOTICE TH ROUGH THE NORMAL MODES HAVE FAILED. THERE IS NO MENTION IN THE ORDERS TO B RING OUT WHY THIS MODE OF SERVICE WAS RESORTED TO. THE ISSUES NEED T O BE ADDRESSED AS THE JURISDICTION ITSELF HAS BEEN QUESTIONED. THUS, IT IS NEC ESSARY TO BRING ON RECORD THE CIRCUMSTANCES NECESSITATING SUCH AN ACTIO N AND WHETHER ANY OTHER MODE OF SERVICE WAS DEPLOYED BEFORE RESORTING TO SERVICE BY AFFIXTURE. THE ASSESSEE IS RELYING UPON AN ADDRESS MENT IONED IN FORM NO. 26AS. WE NOTE THAT NO EFFORT HAS BEEN MADE TO ADDRE SS WHY NOTICE WAS NOT SENT TO THE SAID ADDRESS. IT IS FURTHER SEEN R ELIANCE HAS BEEN PLACED UPON THE FACT THAT NOTICE U/S 148 HAS BEEN STAT ED TO HAVE BEEN SENT TO 35 LODGE ROAD, WALSALL WEST MIDLAND, U.K.-W553TY. ON WHAT DATE THE SAID NOTICE WAS SENT AND SERVED AND AT WHOSE INSTANCE WAS THIS ADDRESS BROUGHT ON RECORD, IS ALSO NOT COMING OUT FROM TH E ORDERS. SINCE THE JURISDICTION ISSUE GOES TO THE ROOT OF THE MATTER AN D THE FOUNDATIONAL FACT HAS TO BE ADDRESSED BY WAY OF EVIDENCE S. THE IMPUGNED ORDERS ARE SET ASIDE IN TOTO AND RESTORED BAC K TO THE FILE OF THE 5 CIT(A) WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCOR DANCE WITH LAW IN EACH OF THESE APPEALS AFTER GIVING THE ASSESSEE A REAS ONABLE OPPORTUNITY OF BEING HEARD ON THE JURISDICTIONAL ISSUE AND THEN TO PROCEED TO DECIDE THE ISSUE ON MERITS, IF NEED BE. SAID ORD ER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSE LF IN THE PRESENCE OF THE PARTIES. 4. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH JUNE,2017. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SI NGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.