Trayambaklal Pandya (HUF), UDAIPUR V. ITO, BANSWARA

ITA 129/JODH/2014

• Counselvise Citation: 12923314 RSA 2014
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-09-2014
• Assessment Year: 1985-1986
• Appeal Filed On: 05-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: THIS COMM ON
• Assessee Lawyers: HUF SAME FACTS
• Keywords: Reopening of assessment; Invalid notice; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA , JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 129 & 13 0 / JU/ 20 1 4 [ ASSESSMENT YEAR S : 1985 - 86 & 1986 - 87 ] SHRI TRAYAMBAKLAL PANDYA [HUF] VS. THE INCOME - TAX OFFICER VILLAGE JAULANA BANSWARA TEHSIL GARHI DISTRICT BANSWARA PAN NO. A BGPA 67 36 J (APPELLANT) (RESPONDENT) A SSESSEE B Y : SHRI SHRAWAN KUMAR GUPTA DEPARTMENT B Y : SHRI JAI SINGH , DR DATE O F H EARING : 2 3 . 0 9 .201 4 DATE OF PRONOUNCEMENT : 25 . 0 9 . 201 4 ORDER PER HARI OM MARATHA , J .M. TH ESE TWO APPEAL S BY THE ASSESSEE ARE DIRECTED A GAINST THE COMMON ORDER OF THE CIT (A) , UDAIPUR DATED 1 2. 12 .201 3 . SINCE ASSESSEE AND HUF , SAME FACTS AND IDENTICAL ISSUES ARE INVOLVED IN 2 THESE TWO APPEALS ARE COMMON, WE ARE DISPOSING THEM OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE, CONGRUENCE AND BREVITY . 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A HUF. SH. OM PRAKASH PAND YA IS THE SON OF KARTA OF ABOVE HUF, WHO WAS A JUNIOR ENGINEER IN IRRIGATION DEPARTMENT SINCE 1975. A SEARCH WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF SH. O.P. PANDYA ON 09.08.1990 BY THE ANTI CORRUPTION DEPARTMENT. THE AO OBSERVED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF SH. O.P. PANDYA THAT INVESTMENT/DEPOSITS IN FDRS, IMMOVABLE PROPERTIES, BANK A/C ETC. IN HIS OWN NAME, IN THE NAME OF WIFE AND MINOR CHILDREN BESIDE ACCRUED INTEREST WERE MADE OUT OF THE INCOME FROM AGRICULTURE BELONG ING TO THE ASSESSEE HUF. THE AO OBSERVED THAT SH. O.P. PANDYA FAILED TO FURNISH ANY CORROBORATIVE DOCUMENTARY EVIDENCE SO AS TO PROVE HIS CONTENTION IS CORRECT, THEREFORE MADE ADDITIONS OF RS. 2,17,407/ - AND 2,70,839/ - IN HIS TOTAL INCOME ON ACCOUNT OF UNE XPLAINED INCOME. THE AO ISSUED NOTICE U/S 148 ON 13.03.1996. IN RESPONSE THERETO, THE ASSESSEE FILED RETURN DECLARING TOTAL INCOME AT NIL AND AGRICULTURAL INCOME OF RS. 1,70,000/ - AND RS. 2,15,000/ - RESPECTIVELY. HOWEVER THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3)/L 48 ON PROTECTIVE BASIS ON A TOTAL INCOME OF RS. 3,87,704/ AND 3 4,85,839/ - RESPECTIVELY ON 23.03.1998. IN FIRST APPEAL THE ID. CIT(A) SET ASIDE THE PROTECTIVE ASSESSMENT ON THE BASIS OF SETTING ASIDE THE SUBSTANTIVE ASSESSMENT ORDER MADE IN THE CASE OF SH. O.P. PANDYA VIDE ORDER IN APPEAL NO. 30 & 31 /IT/98 - 99 DT. 29.12.1998(PB28 - 29). IN COMPLIANCE THERETO THE AO AGAIN COMPLETED THE ASSESSMENT ON THE SAME INCOME ON SAME PROTECTIVE BASIS VIDE ASSESSMENT ORDER DATED 22.02.2001. IN FIRST APPEAL T HE ID. CIT(A), DELETED THE ADDITION OF RS. 2,17,704/ - AND RS. 2,70,839/ - ASSESSED ON PROTECTIVE BASIS IN THE HANDS OF ASSESSEE. HOWEVER, HE CONFIRMED THE INCOME OF RS. 1,70,000/ - AND RS. 2,15,000/ - RESPECTIVELY AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SO URCES. 2.1 AGAINST THE ORDER OF THE CIT(A) THE ASSESSEE HAS FILED APPEAL BEFORE THE ITAT. THE ITAT RESTORED THE APPEAL ON LEGAL ISSUE TO THE CIT(A) AND ON MERIT TO THE AO VIDE ORDER IN ITA NO. 502 & 503/JU/2007 DATED 03.03.2005 W HERE THE ITAT IN PARA 1 2 AT PAGE 4 HELD THAT THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE IS A PURELY LEGAL ONE AND CAN BE DECIDED BY THIS BENCH DIRECTLY, BUT IN THE INTEREST OF JUSTICE WE WOULD LIKE TO SEND THE SAME TO THE FILE OF CIT(A) TO DECIDE THE SAME AFTER HEARING BOTH THE PARTIES. 4 2.2 IN CONSEQUENT THERETO THE ID. CIT(A) PASSED THE ORDER WHEREIN HE TESTING THE REASON FOUND THAT THE ACTION HAS RIGHTLY BEEN INITIATED AS THERE HAS BEEN ESCAPEMENT INCOME BY THE ASSESSEE BUT QUASHED THE NOTICE U/S 148 FOR THE REASON THAT THE N OTICE SO ISSUED, IS BEYOND THE EXPIRY OF SIX YEARS PERIOD AND AS SUCH, WAS BARRED BY THE LIMITATION VIDE ORDER IN APPEAL NO. 262 & 263/IT/UDR/2006 - 07 DATED 22.12.2006. 2.3 AGAINST THIS ORDER THE REVENUE FILED THE APPEAL BEFORE THE TRIBUNAL AND THE ASSESS EE FILED THE CO. THE ITAT HAS OBSERVED THAT THE NOTICE U/S 148 ON DATED 15.03.1996 HAS BEEN ISSUED FOR BOTH THE A.Y. 1985 - 86 AND 1986 - 87 AFTER RECORDING REASONS AS UNDER VIDE PAGE 3 - 4 OF THE ITAT ORDER. THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 148 OF TH E ACT IS PRESCRIBED U/S 149 OF THE ACT AND AS SUCH LIMITATION IS TO BE SEEN AS PER PROVISIONS AS THEY STOOD AT THE TIME WHEN SUCH ACTION IS TAKEN. IN THE PRESENT CASE , NOTICE HAVE BEEN ISSUED ON 15.03.1996. THE ID. CIT(A) OUGHT TO HAVE DECIDED THE ISSUE HA VING REGARD TO THE PROVISIONS AS THEY WERE AVAILABLE IN THE STATUTE AT THE TIME OF ISSUANCE OF SUCH NOTICE ON THAT DATE, HE HOWEVER APPEARS TO HAVE MISDIRECTED HIMSELF BY APPLYING LAW AT STOOD AMENDED BY THE FINANCE ACT , 2001 W.E.F. 01.06.2001. HE THUS, DI D NOT APPLY HIS MIND TO THE CORRECT PROVISION OF LAW, WHILE TAKING DECISIONS AND COMING TO THE CONCLUSION THAT THE ISSUANCE OF NOTICE IS BARRED BY LIMITATION. LIKEWISE 5 THERE ARE FACTUAL INFIRMITIES AS WELL AS IN HIS ORDER WHEN AT INTERNAL PAGE 9 OF HIS ORD ER, HE RECORD A FINDING THAT THE ID. ADD. CIT, RANGE UDAIPUR ACCORDED THE APPROVAL FOR REOPENING OF ASSESSMENT ON 07.03.1996 AND NOTICE HAS BEEN ISSUED ON 31.03.1996 THAT STOOD SERVED ON THE ASSESSEE ON 15.03.1996. HE ALSO DOES NOT APPEAR TO HAVE APPLIED H IS MIND TO THE REASONS THAT WERE TAKEN AS BASIS FOR INITIATING ACTION U/S 148 WHEREAS HE WAS REQUIRED TO LOOK IN TO THE REASONS ALONE WHEN VALIDITY OF THE ACTION WAS TO BE DECIDED BY HIM. SUCH A VIEW FINDS SUPPORTS FROM THE JUDGMENT IN EAST COAST COMMERCIA L COMPANY LTD V/S ITO AND OTHERS (1981) 128 ITR 326(CAL). WE THEREFORE SET ASIDE HIS DECISIONS AND RESTORE THE MATTER BACK TO HIM FOR TAKING A DECISION AFRESH IN ACCORDANCE WITH LAW AS IT STOOD AT THE TIME WHEN THE ACTION U/S 148 WAS ACTUALLY TAKEN AGAINST THE ASSESSEE. NEEDLESS TO ADD AND IN THE EVENT, IF THE ID. CIT(A) FINDS THAT ACTION IS NOT BARRED BY LIMITATION, HE SHALL CONFINE HIMSELF TO THE REASONS RECORDED AND THEN DECIDED THE VALIDITY OF ASSUMPTION OF JURISDICTION FOR ENABLING THE AO TO INITIATING ACTION U/S 148.' VI DE ORDER IN ITA NO. 150 &151//JU /2007 AND CO 12&13/JU/2008 DT. 23.06.2009(PBL - 5). IN CONSEQUEN CE TO THE ORDER OF THE ITAT THE ID. CIT(A) HAS ISSUED THE NOTICE TO THE ASSESSEE. IN RESPONSE THERETO THE ASSESSEE FILED THE SUBMISSIONS REPRO DUCED AT PAGE 3 - 7 OF HIS ORDER. THE ID. CIT(A) HAS AGAIN CONFIRMED THE ACTION OF THE A.O AND WHILE DOING SO HE HAS NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, LAW AND LEGAL 6 POSITION IN THEIR TRUE SENSE AND PERSPECTIVE. HENCE THIS APPEAL IS FILED BEFORE THE TRIBUNAL. 2.4 BEFORE US IT WAS SUBMITTED BY THE LD. A.R THROUGH HIS WRITTEN SUBMISSIONS AS UNDER: 1. REASON TO BELIEVE AND NOT REASON TO SUSPECT: 1.1 IT IS SUBMITTED THAT EVEN UNDER THE AMENDED LAW BY THE FINANCE ACT 1989 THE CONDITION PRECEDENT OR WORDS , WHICH CONTINUES RIGHT SINCE INCEPTION TILL DOTE , ORE REASON TO BELIEVE' AND NOT ' REASON TO SUSPECT'. THE WORD BELIEVE' HAS TO BE UNDERSTOOD IN CONTRADISTINCTION OF SUSPICION OR OPINION. BELIEF INDICATES SOMETHING CONCRETE OR RELIABLE. KINDLY REFER GANG ASHARAN & SONS PVT. LTD. 130 ITR 1 (SC), AND ITO V. LAKHMANI MEWAL DAS, (1976) 103 ITR 437 (SC). 1.2 THE BELIEF OF THE OFFICER SHOULD BE AS TO ESCAPEMENT OF INCOME AND THE BELIEF SHOULD NOT BE A PRODUCT OF IMAGINATION OR SUSPICION OR SPECULATION. THERE MUST BE REASON TO INDUCE THE BELIEF. 1.3 FURTHER, THE BELIEF MUST BE OF AN HONEST AND REASONABLE PERSON BASED UPON REASONABLE GROUNDS. THE OFFICER MAY ACT ON DIRECT OR CIRCUMSTANTIAL EVIDENCE, BUT HIS BELIEF MUST NOT BE BASED ON MERE SUSPICION, GOSSIP OR RUMOR. T HE AO WOULD BE ACTING WITHOUT JURISDICTION IF THE REASON FOR HIS BELIEF THAT THE CONDITIONS ARE SATISFIED DOES NOT EXIST OR IS NOT MATERIAL OR RELEVANT TO THE BELIEF 7 REQUIRED BY THE PROVISION OF LAW. THE COURT CAN ALWAYS EXAMINE THIS ASPECT THOUGH THE DECL ARATION OR SUFFICIENCY OF THE REASONS FOR THE BELIEF CANNOT BE INVESTIGATED BY THE COURT ( SHEO NATH SINGH V. AAC, (1971) 82 ITR 147 (SC). 2.1 IN CIT V/S TRIMURTI BUILDERS REPORTED AT (2012) 246 CTR (MP) 308 WHEREIN IT HAS BEEN HELD THAT' IN THE ABSENCE OF ANY FRESH MATERIAL BEFORE THE AO, REOPENING OF ASSESSMENT ON THE BASIS OF THE MATERIAL WHICH WAS ALREADY TAKEN INTO CONSIDERATION BY THE AO AT THE TIME OF ORIGINAL ASSESSMENT, WAS NOT VALID.' IN THE PRESENT CASE THE MATERIAL WHICH WAS ALREADY TAKEN INTO CONSI DERATION BY THE AO ITSELF AT THE TIME ASSESSMENT IN THE CASE OF SH. O.P. PANDYA. IN CIT V/S KELVINATOR OF INDIA LTD. REPORTED AT (2010) 228 CTR (SC) 488 IN THIS CASE HON'BLE SUPREME COURT OF INDIA HELD THAT' AFTER 1ST APRIL, 1989, AO HAS POWER TO REOPEN THE ASSESSMENT U/S 147 PROVIDED AO HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AND THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME; MERE ' CHANGE OF OPINION' CANNOT PER SE BE REASON TO REOPEN.' 3. NO PRO TECTIVE ASSESSMENT U/S 147/148: FURTHER IT IS SUBMITTED THAT IT IS THE SETTLED LEGAL POSITION THAT NEITHER THE NOTICE U/S 148 CAN BE ISSUED NOR REOPEN THE CASE FOR MAKING PROTECTIVE ASSESSMENT. IN THE CASE OF DCIT VS. BULLION INVESTMENTS & FINANCIAL SERVIC ES (P) LTD. (2009) 29 DTR (BANG)(TRIB) 325 : (2010) 123 ITD 568 HELD THAT REASSESSMENT VALIDITY REASON TO BELIEVE VIS - 8 A - VIS NOTICE TO MAKE PROTECTIVE ADDITION DURING THE COURSE OF SEARCH AGAINST G, MANAGING DIRECTOR OF THE ASSESSEE COMPANY, HE ADMITTED THA T THE UNDISCLOSED INVESTMENT IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY BELONGS TO HIM ONCE THE REVENUE HAS TAKEN THE STAND THAT SUCH INVESTMENT BELONGS TO G AND ASSESSMENT THEREOF HAS BEEN MADE ON SUBSTANTIVE BASIS IN HIS CASE, THEN IT CANNOT BE SAID T HAT THE AO HAD REASON TO BELIEVE THAT THE SAID INCOME HAD ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE COMPANY AO HAS TO FORM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE SAID BASIC REQUIREMENT FOR REOPENING THE ASSESSMENT IS NOT SATISFIED ASSESSMENT CANNOT BE REOPENED FOR MAKING PROTECTIVE ADDITION THEREFORE, CIT(A) WAS JUSTIFIED IN CANCELLING THE REOPENING OF ASSESSEE'S ASSESSMENT ALSO REFER SMT. JASWANT KAUR SEHGAL & ORS. VS. CIT & ORS. (2005) 193 CTR (GAU) 530 : (2004) 271 ITR 475 (GAU) : (2005) 144 TAXMAN 243 IN THE CASE OF SAGAR ENTERPRISES VS.ACIT (2002) 173 CTR (GUJ) 528 : (2002) 257 ITR 335 (GUJ) : (2002) 125 TAXMAN 641 HELD THAT REASSESSMENT REASON TO BELIEVE FAILURE TO FILE RETURN VIS - A - VIS ESCAPEMENT OF INCOME IMP UGNED NOTICE WAS ISSUED MAINLY ON THE BASIS THAT THE ASSESSEE - FIRM HAD NOT FILED ITS RETURN FOR THE ASST. YR. 1991 - 92 SAME FACTUALLY INCORRECT PROOF OF FILING OF RETURN PRODUCED BY ASSESSEE NOTICE UNDER S. 148 WAS ALSO SOUGHT TO BE JUSTIFIED ON THE BASIS OF AN UNDISCLOSED TRANSACTION IT CANNOT BE SAID WITH CERTAINTY AS TO WHICH FACTOR WEIGHED WITH THE CONCERNED OFFICER WHEN HE ISSUED THE IMPUGNED NOTICE FURTHER, CERTAIN INCOME WHICH IS STATED TO BE UNDISCLOSED INCOME 9 WAS ALSO INCLUDED IN THE SUBSEQUENT ASS T. YR. 1992 - 93 ON PROTECTIVE BASIS BUT IT WAS DELETED IN APPEAL FOR THAT YEAR THUS, RESPONDENT HIMSELF WAS NOT SURE AS TO THE YEAR OF TAXABILITY OF SAID ITEM THEREFORE, IT COULD NOT BE SAID THAT THE SAID INCOME HAD ESCAPED ASSESSMENT IMPUGNED NOTICE QUASHE D . ALSO REFER DHFL VENTURE CAPITAL FUND VS. ITO 358 ITR 471 (BOM). 4.1 THUS THE INITIATION OF REASSESSMENT PROCEEDINGS WAS ILLEGAL AND WITHOUT JURISDICTION, HENCE THE SUBSEQUENT PROCEEDINGS BASED ON SUCH INVALID NOTICE ARE NOT ENFORCEABLE AGAINST THE PETITION ER. THE REASSESSMENT PROCEEDINGS HAVE BEEN INITIATED ON WRONG AND INCOMPLETE INFORMATIONS WHICH ARE ALTOGETHER CONTRARY TO THE REAL FACTS OF THE CASE AS STATED ABOVE. THERE WAS NEITHER ANY INCOME DERIVED NOR ANY TRANSACTIONS EXECUTED BY THE ASSESSEE WHICH IS TAXABLE AS ALLEGED BY THE AO IN HIS ORDER. IN FACT THE AO HAS ERRED AT LAW IN NOT PROPERLY APPRECIATING THE CORRECT FACTS THAT THE AGRICULTURE LANDS BELONGS TO T.L PANDYA HUF AND THE INVESTMENTS IN FDRS HAS BEEN MADE OUT OF SALE OF THOSE AGRICULTURE PR ODUCE. THERE WAS NO ESCAPEMENT OF TAX BECAUSE THERE WAS NO FDRS FROM OTHER SOURCE OF INCOME EXCEPT TO AGRICULTURE INCOME WHICH IS EXEMPT TO TAX. 4.2 REASONS RECORDED UNDER SECTION 148 IN THIS CASE REVEALING THAT THE ID. AO HAD NO MATERIAL WITH HIM SHOWING E SCAPEMENT OF INCOME BY THE ASSESSEE AT THE TIME OF ISSUING NOTICE UNDER SECTION 148. HENCE THERE WAS NO PROPER JURISDICTION FOR INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE ID. AO. THAT THE NOTICE U/S 148 HAS BEEN ISSUED ON ASSUMPTIONS AND PRESUMPTIO NS FOR FURTHER ENQUIRY IGNORING THE TRUE AND REAL FACTS OF THE CASE AND 10 THE MATERIAL AVAILABLE ON RECORD. IN FACT, THERE WAS NO PROOF OF INCOME DERIVED BY THE ASSESSEE FROM THE ALLEGED OTHER SOURCES. THE REQUISITE CONDITIONS FOR ISSUE OF NOTICE UNDER SECTI ON 148 ARE NOT FULFILLED AND THE INFORMATION COLLECTED WAS NOT PROPERLY APPRECIATED. THERE WAS NO EVIDENCE ON RECORD FROM WHICH IT CAN BE IMPLIED THAT THERE IS SOME INFORMATION FROM WHICH A REASONABLE BELIEF OF ESCAPEMENT OF TAX CAN BE FORMED. THE INITIATI ON OF REASSESSMENT PROCEEDING BY THE ID. AO IS ARBITRARY BASED WITHOUT VERIFYING THE FACTS TO WHOM THE AGRICULTURE BELONGS TO EITHER O.P. PANDYA OR SH. T. L. PANDYA HUF (ASSESSEE) AND HOW MUCH AGRICULTURE PRODUCE THERE. THE ONLY REASONS RECORDED FOR INITIA TION OF PROCEEDINGS U/S 148 WAS THAT 'SINCE THE INCOME OF RS. 2,17,704/ - HAS REMAINED TO BE TAXED IN THE HANDS OF THE ASSESSEE SH. T.L. PANDYA. HENCE IT IS NECESSARY TO ISSUE THE NOTICE U/S 148 TO MAKE PROTECTIVE ASSESSMENT IN THE HANDS OF SH. T.L. PANDYA HUF. THE LD. AO HAS NOT APPLIED HIS OWN MIND, JUST ISSUED THE NOTICE ONLY TO MAKE PROTECTIVE ASSESSMENT. FURTHER, THE ID. AO HAS ALSO NOT VERIFIED WHETHER THE ASSESSEE WAS HAVING AGRICULTURE LAND AND INCOME OR NOT AT HIS LEVEL ALSO BY INDEPENDENT ENQUIRY BEFORE ISSUE OF NOTICE AND RECORDING OF REASON. ACCORDINGLY THE INITIATION OF REASSESSMENT PROCEEDINGS BY THE ID. AO JUST ON ASSUMPTION AND PRESUMPTION IGNORING THE TRUE FACT, IN THIS CASE, IS ILLEGAL, BAD IN LAW AND ALL SUBSEQUENT PROCEEDINGS ARE REQUIRE D TO BE TREATED AS INVALID. 4.3 THE REASSESSMENT PROCEEDINGS BY ISSUE OF NOTICE UNDER SECTION 148 ON THE BASIS OF SUCH ASSUMPTION AND PRESUMPTIONS 11 WITHOUT PROPER BASE OR PROPER REASONS TO BELIEVE JUST BASED ON WRONG FACTS ARE INVALID AND NOT ENFORCEABLE AGAINS T THE ASSESSEE. HENCE THE ASSESSMENT ORDER FRAMED BY THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED ON THIS GROUND ALONE. IN SUPPORT OF ALL THE ABOVE SUBMISSIONS AND PROPOSITIONS, WE RELY ON THE FOLLOWING JUDGMENTS : DELHI INDUSTRIES AND ENTERPRISES V/S A CIT (2012) 80 DTR (DEL) (TRIB)252 KUMAR STORES V/S CIT (2012) 70 DTR (PATNA)144 GUJARAT POWER CORPORATION LIMITED V/S DCIT (2012) 77 DTR (GUJ) 89 CIT V/S USHA INTERNATIONAL LTD. (2012) 77 DTR (DEL) (FB)396 ABP LIMITED V/S JCIT (2006) 151 TAXMAN 161 CIT V/S SMT. MANI BEN VALJI SHAH 204 CTR 249(BOM). ITO VS. TAKSHILA DISTRIBUTORS (P) LTD.* (2009) 121 TTJ ( DELHI ) 973 THE RATIOS OF ABOVE JUDGMENTS ARE FULLY APPLICABLE IN THE PRESENT CASE, CONSIDERING IDENTICAL AND SIMILAR FACTS. 5. NO NOTICE U/S 148 HAS SERVED EITHER ON ASSESSEE OR ITS MEMBERS.: FURTHER IT IS SUBMITTED THAT IN THE PRESENT CASE NOTICE HAS NOT BEEN SERVED ON THE ASSESSEE OR ITS MEMBERS. THE NOTICE HAS BEEN SERVED ON SMT. SHOBHA DEVI W/O SH. O.P. PANDYA WHO IS NOT THE MEMBER OF ASSESSEE HUF AND RE SIDING AT 2. - KA - 13, HOUSING BOARD COLONY BANSWARA, WHILE THE ADDRESS OF THE KARTA OF HUF AND ITS MEMBERS WERE RESIDING AT VILLAGE JAUL ANA TEHSIL GARHI DISTT. BANSWARA 5 AC ) AS WELL AS THE ID. CIT(A) HAS IGNORED THESE VERY VITAL FACTS. THE PROPER SERVICE OF NOTICE IS PRE CONDITION FOR ASSESSMENT U/S 148. ON THIS PREPOSITION KINDLY 12 REFER A RECENT DIRECT DECISION OF THIS HONBLE BENCH IN THE CASE OF SH. PANNA LA L BHIL V/S ITO IN ITA NO. 453/J U /2013 DT. 11.06.2014. HENCE, WE REQUEST YOUR HONOR TO QUASH THE IMPUG NED REASSESSMENT ORDER U/S 147/143 (3) ON THE ABOVE STATED LEGAL GROUNDS, IN THE INTEREST OF EQUITY AND JUSTICE. 3. THE LD. D.R HAS SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAVE FOUND THAT A NOTICE U/S 148 CANNOT BE VALIDLY ISSUED TO ASSESS ANY CASE ON PROTECTIVE BASIS. THE A.O IS BOUND TO MAKE HIS FIRM OPINION REGARDING ESCAPEMENT OF INCOME OF AN ASSESSEE WHEREAS THE ASSESSMENT ON PROTECTIVE BASIS IS ONLY IN THE NATURE OF HIT AND TRIAL. THE FRAMING OF A PROTECTIVE ASSESSMENT IS ANTI - THESES OF FORMING AN OPINION BY THE A.O OF ESCAPEMENT OF INCOME OF AN ASSESSEE, AS SUCH A ACTION IS TAKEN ONLY TO PROTECT THE INTEREST OF THE REVENUE. THUS, IN VIEW OF THE ABOVE WE FIND THAT THE NOTICE(S) ISSUED U/S 148 OF THE ACT IN BOTH THE YEARS ARE INVALID AND RESULTANTLY THE ASSUMPTION OF JURISDICTION BY THE A.O U/S 148 IS ALSO INVALID. ANY ORDER MADE ON SUCH A JURISDICTION IS BOUND TO FALL BEING ILLEGAL. THEREFORE, WE QUASH THE ASSESSMENT ORDER MADE IN BOTH THE YEARS AND ALLOW BOTH THE APPEALS. THE DECISIONS ON 13 WHICH TH E LD. A.R HAS RELIED ARE NOT ONLY DIRECTLY APPLICABLE TO THE FACTS OF THESE CASES BUT ALSO HAVE A BINDING EFFECT. ACCORDINGLY, BOTH THE APPEALS OF THE ASSESSEE STAND ALLOWED. 5 . IN THE RESU LT, BOTH TH E APPEAL S OF THE ASSESSEE IN ITA NO. 129 & 13 0 /JU/2014 FOR A.Y S . 1985 - 86 & 1986 - 87 STAND ALLOWED . ORDER PRON OUNCED IN THE COURT ON 25 TH SEPTEMBER , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEM B ER DATED : 25 TH SEPTEMBER , 201 4 VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR SENIOR PRIVATE SECRETARY ITAT, JODHPUR