JAGDISH PRASAD YADAV, Jaipur V. ITO, Alwar

ITA 133/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4922 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 06-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA DHK
• Keywords: Initiation of penalty proceedings; Reassessment proceedings
• Section: 142(1); 147; 148; 144

Judgement Text

- VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 133/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI JAGDISH PRASAD YADAV BHURA SIDH ROAD ALWAR CUKE VS. THE ITO WARD 2(1) ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: BGYPP 6456 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY: SHRI R.A. VERMA, ADDL.CIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21/10/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23 /11/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A) , ALWAR DATED 14-11-2014 FOR THE ASSESSMENT YEAR 2 008-09. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS IN THIS APPEAL IN WHICH FIRST GROUND IS LEGAL AND SECOND GROUND IS ON MERIT. 1. THE LD. CIT(A) HAS ERRED IN FACT AND IN LAW BY WITHHOLDING AND CONFIRMING PROCEEDINGS U/S 147 OF A O, WHICH WAS NOT DULY SERVED UPON ASSESSEE AS ITSELF M ENTIONED ITA NO. 133/JP/2015 SHRI JAGDISH PRASAD YADAV VS. ITO , WARD- 2(1), ALW AR 2 BY THE ORDER OF AO THAT NOTICE U/S 147 WAS SERVED U PON THE SON OF ASSESSEE, NOTICE U/S 142(1) WAS SERVED UPON SHRI SATYA NARAIN (UNKNOWN PERSON). HOWEVER, SON OF ASSE SSEE WAS NOT RESIDING WITH ASSESSEE AND FURTHER THE ASSE SSEE IS OLD AGED ABOUT 82 YEARS AND ILLITERATE AND BED RIDDEN S INCE A LONG TIME. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING ADDITION OF RS. 8,64,700/- IN RESPECT OF LONG TERM CAPITAL GAIN WITHOUT GIVING BENEFIT OF PURCHAS E PRICE AND INDEXATION THEREON. FURTHER THE SAID AGRICULTUR E LAND WAS ANCESTRAL IN WHICH THE SON AND DAUGHTER OF THE ASSE SSEE WAS ALSO HAVING SHARE AS THE STATUS OF PROPERTY WAS HUF . 2.1 APROPOS GROUND NO. 1 OF THE ASSESSEE, IT IS NOT ED FROM THE ASSESSMENT ORDER THAT NOTICE U/S 148 DATED 05.04.2 010 WAS SERVED UPON SHRI CHIRANJI LAL YADAV, SON OF THE ASSESSEE ON 09 .04.2010. AGAIN NOTICE U/S 142(1) DATED 09.09.2010 WAS SERVED ON SH. CHIRA NJIV LAL YADAV ON 09.09.2010. THE ASSESSEE DID NOT FILE HIS RETURN OF INCOME IN COMPLIANCE TO SAID NOTICE, HENCE NOTICE U/S 142(1) OF I.T. AC T WAS ISSUED ON 09-09- 2010. THE SAID NOTICE WAS ALSO SERVED UPON SHRI CHI RANJI LAL YADAV, SON OF ASSESSEE ON 9-09-2010. DUE TO NON-COMPLIANCE OF ABOVE NOTICES, FRESH NOTICE U/S 142(1) ALONGWITH REQUISITION LETTER DATE D 7-10-2010 AND SHOW CAUSE NOTICE FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(B) WAS ISSUED FOR 15-10-2010. THE SAID NOTICE WAS ALSO UNCOMPLIED WITH. THEREAFTER, NOTICE U/S 142(1) DATED 09.09.2011 WAS SERVED ON SH . SATNARAYAN, PETROL ITA NO. 133/JP/2015 SHRI JAGDISH PRASAD YADAV VS. ITO , WARD- 2(1), ALW AR 3 PUMP, NAYA BAS, ALWAR. THEREAFTER, FRESH NOTICE U/S 142(1) WAS SERVED ON THE ASSESSEE AT BHURA SIDH ROAD, ALWAR. THE ASSE SSMENT WAS COMPLETED U/S 144 ON 18.11.2011 AT THE ADDRESS BHUR A SIDH ROAD, ALWAR. 2.2 BEFORE LD. CIT(A), THE ASSESSEE CONTENDED THAT NOTICE U/S 148 WAS NOT SERVED ON HIM AND THEREFORE THE ASSESSMENT MADE IS ILLEGAL AND BAD IN LAW. THE LD. CIT(A) CALLED A REMAND REPORT. IN THE REMAND REPORT, REPRODUCED AT PARA 4.3 OF THE ORDER OF LD. CIT(A), IT IS MENTIONED THAT AO ONLY REFERRED TO THE NON COOPERATION OF THE ASSESSE E IN THE COURSE OF ASSESSMENT PROCEEDINGS BUT HAS NOT STATED ANYTHING REGARDING THE SERVICE OF NOTICE U/S 148 TO THE ASSESSEE. THE LD. CIT(A) HOWEVER HELD THAT AO HAS ISSUED NOTICE U/S 148 ON THE BASIS OF THE INFOR MATION REGARDING SALE OF LAND MADE BY THE ASSESSEE. THE AO HAS THUS DISCHARG ED ITS DUTY BEFORE INITIATING THE REASSESSMENT PROCEEDINGS. HE THEREFO RE, UPHELD THE ORDER PASSED BY AO U/S 147/148 . 2.3 DURING THE COURSE OF HEARING, THE LD. AR CONTEN DED THAT SECTION 148(1) OF THE IT ACT PROVIDES THAT BEFORE MAKING RE ASSESSMENT U/S 147, AO SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING H IM TO FURNISH RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. THEREFORE, SERVICE OF NOTICE U/S 148 ON THE ASSESSEE IS A CONDITION PRECEDENT FOR MA KING REASSESSMENT U/S ITA NO. 133/JP/2015 SHRI JAGDISH PRASAD YADAV VS. ITO , WARD- 2(1), ALW AR 4 147. IN THE PRESENT CASE, IT IS AN ADMITTED FACT TH AT NOTICE U/S 148 IS NOT SERVED ON THE ASSESSEE. THE SERVICE OF SUCH NOTICE ON THE SON OF ASSESSEE WOULD NOT AMOUNT TO SERVICE ON THE ASSESSEE. THIS I S ALL THE MORE EVIDENT FROM THE FACT THAT NOTICE U/S 148 IS ISSUED AT THE ADDRESS NAYA BAS, ALWAR WHEREAS ASSESSMENT IS FRAMED AT THE ADDRESS BHURA S IDH ROAD, ALWAR. IT IS NOT THE CASE OF THE AO THAT SH. CHIRANJIV LAL YA DAV, SON OF THE ASSESSEE IS AUTHORISED TO RECEIVE SUCH NOTICE. EVEN IN THE R EMAND REPORT, THE AO HAS NOT STATED THAT NOTICE U/S 148 ISSUED ON THE SO N OF THE ASSESSEE IS A VALID SERVICE OF NOTICE. THE LD. CIT(A) HAS ALSO NO T GIVEN ANY FINDING THAT NOTICE U/S 148 IS SERVED ON THE ASSESSEE. THEREFORE , THE ASSESSMENT FRAMED U/S 147 WITHOUT SERVICE OF NOTICE U/S 148 TO THE AS SESSEE IS ILLEGAL AND BAD IN LAW. THE LD. AR RELIED ON THE FOLLOWING JUDGMENT S: 1. CIT VS. MINTU KALITA 253 ITR 334 (GUWAHATI) 2. JAYANTHI TALKIES DISTRIBUTORS VS. CIT 12 0 ITR 576 (MADRAS) 3. FATHECHAND AGARWAL VS. CWT 97 ITR 701 (O RISSA) 2.4 DURING THE COURSE OF HEARING, THE LD. DR ARGUED THAT NOTICE IS SERVED ON CHIRANJI LAL YADAV, WHO IS SON OF THE ASS ESSEE. HE RELIED ON THE DECISION OF IN CASE OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF DE SOUZA VS. CIT (1932) 6 ITC 130 (ALLAHABAD) WHEREIN IT WAS HELD THAT WHERE THE ASSESSEES SON WAS LIVING WITH ASSESSEE A ND WHEN ON PREVIOUS ITA NO. 133/JP/2015 SHRI JAGDISH PRASAD YADAV VS. ITO , WARD- 2(1), ALW AR 5 OCCASIONS NOTICE HAD TO BE SERVED ON ASSESSEE, THEY WERE TAKEN DELIVERY OF BY HIS SON. THE FACT THAT ASSESSEES SON WAS A MINO R, DID NOT PREVENT HIM FROM BEING AN AGENT OF HIS FATHER FOR PURPOSE OF AC CEPTING DELIVERY OF NOTICE AND THEREFORE SERVICE OF NOTICE ON ASSESSEE S SON WAS A GOOD SERVICE. 2.5 FURTHER THE LD. AR OF THE ASSESSEE DURING THE C OURSE OF HEARING CONTENDED THAT IN THE CASE DE SOUZA VS. CIT (SUPRA) REFERRED BY THE LD. DR, THE SON WAS LIVING WITH THE ASSESSEE WHEREAS IN THE PRESENT CASE, SHRI CHIRANJI LAL YADAV WAS NOT LIVING WITH ASSESSEE IN AS MUCH AS ASSESSEE WAS RESIDING AT BHURA SIDH, ALWAR WHEREAS HIS SON C HIRANJI LAL WAS RESIDING AT NAYA BAS ALWAR WHICH IS EVIDENT FROM T HE ASSESSMENT ORDER. THE LD. AR THEREFORE ARGUED THAT THE CASE RELIED BY THE LD. DR IS NOT APPLICABLE ON FACTS. 2.6 I HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL ON RECORD. IN THE COURSE OF HEARING, THE ASSESSMENT RE CORDS WERE CALLED FOR AND THE COPIES OF THE NOTICE ISSUED U/S 148 DATED 0 5.04.2010 SERVED ON SHRI CHIRANJI LAL YADAV AND THE SUBSEQUENT NOTICE U /S 142(1) DATED 09.09.2010 AGAIN SERVED ON SHRI CHIRANJI LAL YADAV IS TAKEN ON RECORD. IT IS FOUND THAT NOTICE U/S 148 DATED 05.04.2010 AND U /S 142(1) DATED ITA NO. 133/JP/2015 SHRI JAGDISH PRASAD YADAV VS. ITO , WARD- 2(1), ALW AR 6 09.09.2010 IS SERVED ON THE SON OF THE ASSESSEE SHR I CHIRANJI LAL YADAV AT THE ADDRESS NAYA BAS, ALWAR. IT IS NOT THE CASE OF THE REVENUE THAT SHRI CHIRANJI LAL YADAV WAS AUTHORISED TO RECEIVE THE NO TICE OR THAT ASSESSEE WAS RESIDING WITH HIS SON. THEREFORE , THE CASE LAW RELIED BY THE LD. DR IS NOT APPLICABLE ON FACTS. AS AGAINST THIS, THE HONBLE SUPREME COURT IN CASE OF CIT VS. KURBAN HUSSAIN IBRAHIMJI MITHIBORWA LA 82 ITR 821 HELD THAT ITOS JURISDICTION DEPENDS UPON ISSUANCE OF VA LID NOTICE. IF IT IS INVALID FOR ANY REASON THE ENTIRE PROCEEDINGS WOULD BECOME VOID. HON'BLE GUWAHATI HIGH COURT IN CASE OF CIT VS. MINTU KALITA 253 ITR 334 HELD THAT SERVICE OF THE NOTICE PRESCRIBED BY SECTION 14 8 ON THE ASSESSEE FOR THE PURPOSE OF INITIATING PROCEEDINGS FOR REASSESSMENT IS NOT A MERE PROCEDURAL REQUIREMENT BUT IT IS A CONDITION PRECED ENT TO THE INITIATION OF PROCEEDINGS FOR REASSESSMENT. MERE ISSUANCE OF NOTI CE IS NOT SUFFICIENT. NO PROOF THAT NOTICE WAS SERVED ON THE ASSESSEE. AP PEARANCE OF AN EMPLOYEE OF AN ASSESSEE IN RESPONSE TO NOTICE U/S 1 42(1) DOES NOT MEAN THAT ASSESSEE HAD KNOWLEDGE OF THE PROCEEDINGS U/S 147. THEREFORE, REASSESSMENT IS NOT JUSTIFIED. THE FACT OF THE ASSE SSEES CASE IS SIMILAR TO THAT OF THIS CASE IN AS MUCH AS THERE IS NO EVIDENC E OF SERVICE OF NOTICE U/S 148 TO THE ASSESSEE. HENCE, THE REASSESSMENT ORDER PASSED BY THE AO IS ITA NO. 133/JP/2015 SHRI JAGDISH PRASAD YADAV VS. ITO , WARD- 2(1), ALW AR 7 NOT AS PER LAW AND THE SAME IS QUASHED. SINCE THE A PPEAL IS DECIDED ON THE LEGALITY, THEREFORE I REFRAIN FROM DECIDING GROUND NO. 2 OF THE ASSESSEE. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 /11 /2016. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 23 /11/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI JAGDISH PRASAD YADAV, ALWAR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, 2(1), ALWAR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 133/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR