Ashish Sarin, New Delhi V. ACIT, New Delhi

ITA 1377/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96965 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: SANTOSH AGARWAL
• Keywords: Opportunity of being heard; Principle of natural justice; Competent authority
• Section: 143(3); 142(1); 27; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. J.S.REDDY , ACCOUNTANT MEMBER I.T.A .NO. - 1377 /DEL/201 3 (ASSESSMENT YEAR - 200 8 - 0 9 ) ASHISH SARIN, C - 141, PREET VIHAR, NEW DELHI. PAN - AIGPS1250A (APPELLANT) VS ACIT, CIRCLE - 46(1), NEW DELHI (RESPONDENT) APPELLANT BY SH. SANTOSH AGARWAL, CA RESPONDENT BY MS.Y.KAKKAR, DR ORDER PER DIVA SINGH, JM BY THE PRESENT APPEAL FILED BY THE ASSESSEE TH E CORRECTNESS OF THE ORDER DATED 07.01.2013 OF CIT(A) - XXX, NEW DELHI P ERTAINING TO 200 8 - 0 9 ASSESSMENT YEAR HAS BEEN ASSAILED ON VARIOUS GROUNDS. HOWEVER, ONLY GROUND NO. - 1 WAS ARGUED BY THE PARTIES BEFORE US AS SUCH REFERENCE IS BEING MADE ONLY TO THE SAID GROUND. THE SAME READS AS UNDER: - 1. FAILING TO APPRECIATE THAT THE ASSESSEE HAS NOT BEEN SERVED WITH MANDATORY NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 ( THE ACT ) AND HENCE C NOT RENDERING THE ASSESSMENT AS VOID - AB - INITIO. 2. THE RECORD SHOWS THAT THAT THE ASSESSEE DECLARED AN INCOME OF RS.36,13,863/ - WHICH WAS PROCESSED U/S 143(1) AND SUBSEQUENTLY SELECTED FOR SCRUTINY THROUGH CASS. THE SUBJECT MATTER OF THE DISPUTE IS ON THE ISSUANCE OF NOTICE U/S 143(2). AS PER THE ASSESS MENT ORDER PARA 1, THIS NOTICE IS STATED TO BE SENT ON 12.08.2009 BY REGISTERED SPEED POST AT THE ADDRESS OF THE ASSESSEE AVAILABLE WITH THE DEPARTMENT. SUBSEQUENTLY, NOTICE U/S 142(1) WAS ISSUED ON DATE OF HEARING 2 2 .0 5 .2015 DATE OF PRONOUNCEMENT 07 .0 8 .2015 I.T.A .NO. - 1377 /DEL/201 3 PAGE 2 OF 9 22.06.2010. AS PER PARA 2 OF THE ASSESSMENT ORDER THE A SSESSEE APPEARED BEFORE THE AO ON 24.11.2010 AND OBJECTED THAT NOTICE U/S 143(2) HAD NOT BEEN RECEIVED. THE OBJECTION WAS REJECTED HOLDING THAT THE RECORD SHOWED THAT IT HAD BEEN SENT THROUGH SPEED POST AT THE CURRENT ADDRESS OF THE ASSESSEE AND AS PER TH E INFORMATION ON RECORD, IT HAD NOT BEEN RETURNED UNSERVED WITH ANY POSTAL COMMENTS. PURSUANT TO THIS RELYING UPON THE CASE OF CAPITAL GEM OVERSEAS (P.) LTD. VS ITO (ITAT, DEL) 101 ITD 117; RAMESH KHOSLA VS ITO & ANR. (P&H) 155 ITR 556; CIT VS YAMU INDU STRIES LTD. [2008] 167 TAXMAN 67 (DELHI), THE AO REJECTED THE CLAIM OF THE ASSESSEE AS AN AFTER THOUGHT HOLDING AS UNDER: - FURTHER, IT IS IMPORTANT TO NOTE HERE THAT AS PER RECORDS THE ASSESSEE S AUTHORIZED REPRESENTATIVE HAS ATTENDED THE HEARINGS ON THE FOLLOWING DATES 02.07.2010, 23.08.2010, 02.09.2010, 15.09.2010, 22.10.2010 & 19.11.2010 AND NO WHERE HE HAS RAISED THE ISSUE OF NON - RECEIPT OF NOTICE UNDER SEC.143(2). ONLY WHEN THE SHOW CASE WAS ISSUED TO HIM TO CLARIFY AS TO WHY NOT THE LOSS UNDER THE HEAD HOUSE PROPERTY OF RS.3.23.493/ - AND THE EXEMPTION UNDER SEC 10 OF RS.10,20,000/ - SHOULD NOT BE DISALLOWED. , THE ASSESSEE HAS COME UP WITH THE SUBMISSION THAT HE HAS NOT RECEIVED NOTICE UNDER SEC.143(2). THUS, IT IS VERY CLEAR THAT IT IS AN AFTERTH OUGHT AND AR HAS RAISED THIS OBJECTION TO DERAIL THE ASSESSMENT PROCEEDINGS. 2.1. THEREAFTER CONSIDERING THE MATERIAL AVAILABLE ON RECORD ADDITION RS.1,73,493/ - WAS MADE BY WAY OF DISALLOWING THE LOSS CLAIMED UNDER THE HEAD HOUSE PROPERTY AND ADDITION OF RS.10,20,000/ - WAS MADE BY WAY OF DISALLOWING THE CLAIM OF HOUSE RENT ALLOWANCE U/S 10. ACCORDING LY THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.12,36,000/ - . 3. AGGRIEVED BY THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE ASSESSEE AGAIN CHALLENGED THE PROCEEDINGS ON THE GROUND THAT NOTICE U/S 143(2) HAD NOT BEEN ISSUED. RELIANCE WAS PLACED UPON THE FOLLOWING DECISIONS SO AS TO CANVASS THAT THE PROCEEDINGS FOR WANT OF ISSUANCE OF NOTICE U/S 143(2) DESERVED TO BE DROPPED: - (I) CIT VS VARDHMA N ESTATE PRIVATE LTD. [2006] 287 ITR 368 (DEL.); (II) BHPE KINHILL JOINT VENTURE VS ADDITIONAL DIRECTOR OF INCOME TAX, RANGE - 1; (III) RAJ KUMAR CHAWLA VS ITO (ITAT, DEL.); (IV) LALLY JACOB VS ITO [1992] 197 ITR 439 (KER.) 3.1. APART FROM THAT RELIANCE WAS FURTHER PLACED ON THE FOLLOWING DECISIONS: - (I) TULIKA MISHRA VS JCIT SPL.RANGE - 23, NOW CIT 6(1), NEW DELHI; (II) AEGIS CHEMICAL IND. LTD. VS INCOME TAX OFFICER [1998] 65 ITD 147 (MUM.); (III) COMMISSIONER OF INCOME TAX VS CPR CAPITAL SERVICES LTD. [2011] 11 TAXMANN.COM 150 (DELHI); I.T.A .NO. - 1377 /DEL/201 3 PAGE 3 OF 9 (IV) CI T VS RAJEEV SHARMA [2002] 192 TAXMAN 1697 (ALL.); (V) P.SUKUMAR HUF VS ACIT [2011] 15 TAXMANN.COM 326 (CHENNAI); (VI) CIT VS H.GOUTHAMCHAND [2012] 17 TAXMANN.COM (KAR.); AND (VII) DCIT, CENTRAL CIRCLE - 11, NEW DELHI VS MAYAWATI [2010] 42 SOT 59 (DELHI). 4. A PERUSAL OF THE RECORD SHOWS THAT THE CIT(A) AFTER CONSIDERING THE ISSUE OF SERVICE OF NOTICE DISMISSED THE SAME BY A REASONED ORDER HOLDING AS UNDER: - .THE AR ON THE OTHER HAND IS ON THE POINT THAT ASSESSMENT SHOULD BE CANCELLED, SINCE 143(2) NOTICE WAS NO T SERVED BY THE APPELLANT. CONSIDERING THE DIFFICULTIES OF TAX ADMINISTRATION BY THE DEPARTMENT AND DISTRIBUTION OF JURISDICTION OF THE CASES TO SALARIES ITO, IT IS NOT POSSIBLE TO MONITOR SERVICE OF NOTICE 142(1)/143(2) ON EACH CASE EXCLUSIVELY. THEREFO RE, THIS GROUND OF APPEAL TAKEN BY THE APPELLANT OF NON SERVICE OF NOTICE 143(2) IS DISMISSED. (EMPHASIS PROVIDED) 5. THE LD. AR RELYING UPON THE FINDING RECORDED IN THE ASSESSMENT ORDER SUBMITTED THAT IN VIEW OF THE FACT THAT THE CIT(A) HAS NOT GIVEN A POSITIVE FINDING HOLDING THAT NOTICE U/S 143(2) HAS BEEN ISSUED THE ASSESSMENT DESERVES TO BE QUASHED. INVITING ATTENTI ON TO THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS LUNAR DIAMONDS LTD. [2006] 281 ITR 1 (DEL.) IT WAS HIS SUBMISSION THAT THE SAID PRAYER IS FULLY SUPPORTED BY THIS DECISION OF THE JURISDICTIONAL HIGH COURT. 5.1. INVITING ATTENTION TO THE ASSESSMENT ORDER PAGE 2, IT WAS HIS SUBMISSION THAT IT WAS INCORRECT ON THE PART OF THE AO TO STATE THAT THE OBJECTION TO NON - RECEIPT OF NOTICE U/S 143(2) WAS MADE ONLY ON 24.11.2010. REFERRING TO THE SAID ORDER IT WAS STATED BY THE LD.AR THAT THE ASSESSEE BEFORE THE AO WAS ALSO REPRESENTED BY HIM AND IN THIS BACKGROUND HE STATED THAT HE WAS MAKING A STATEMENT AT BAR STATING HE APPEARED FOR THE ASSESSEE BEFORE THE AO AND HAD REPEATEDLY PLEADED THIS FACT ORALLY BEFORE THE AO ON EACH OF THE DATES ME NTIONED BY THE AO AND ONLY WHEN THE AO ADAMANTLY INSISTED THAT THE ISSUE WOULD BE REJECTED WITHOUT DEALING WITH THE OBJECTIONS ORALLY CONVEYED THAT THE OBJECTIONS WERE PUT IN WRITING. IT WAS SUBMITTED THAT SINCE HIS STATEMENT AT BAR IS BASED ON PERSONAL KN OWLEDGE THUS ACCEPTING THE STATEMENT THE PROCEEDINGS SHOULD BE QUASHED. 5.2. REFERRING TO T HE RECORD IT WAS RE - ITERATED THAT WHEN THE CIT(A) ACCEPTS THAT IT IS NOT POSSIBLE TO GIVE A POSITIVE FINDING ON THE ISSUANCE OF NOTICE U/S 143(2), IT LEADS TO THE ONLY CONCLUSION THAT THE DEPARTMENT IS UNABLE TO STATE POSITIVELY I.T.A .NO. - 1377 /DEL/201 3 PAGE 4 OF 9 WHETHER SERVICE HAS BEEN EFFECTED OR NOT THUS WHERE SERVICE IS DISPUTED BY THE ASSESSEE AND THE DEPARTMENT ACCEPTS THAT IT IS NOT POSSIBLE TO MONITOR WHETHER IT WAS SERVED OR NOT THEN REL YING UPON THE DECISION THE PROCEEDINGS DESERVE TO BE QUASHED. 6. THE LD. SR. DR, MS. Y.KAKKAR RELYING UPON THE ASSESSMENT ORDER SUBMITTED THAT ON FACTS THERE IS A CATEGORIC FINDING IN THE ASSESSMENT ORDER THAT NOTICE HAS BEEN ISSUED ON 12.08.2009 AT THE C ORRECT ADDRESS AND IT HAS NOT COME BACK UNSERVED. IN THESE CIRCUMSTANCES, IT WAS HER SUBMISSION THAT THE AO TAKING NOTE OF THE FACT THAT THE OBJECTION WAS POSED ONLY ON 21.04.2010 HAS CORRECTLY COME TO THE CONCLUSION THAT IT WAS AN AFTER THOUGHT. 6.1. R EFERRING TO THE IMPUGNED ORDER IN THE CONTEXT OF THE ARGUMENTS MADE BY THE LD. AR, IT WAS HER REQUEST THAT THE ISSUE MAY BE SENT BACK TO THE FILE OF THE CIT(A) AS THE FINDINGS IN THE SECOND HALF OF THE PENULTIMATE PARA AT UN - NUMBERED PAGE 5 READ OUT IN T HE COURT BY THE LD.AR AT BEST CAN BE SAID TO BE THE PERSONAL THOUGHTS OF THE CONCERNED CIT DR AND CAN NEVER BE TAKEN TO BE THE STAND OF THE REVENUE ON THE LARGER ISSUE INVOLVED. IN VIEW OF THE FACT THAT THE LD.CIT(A INSTEAD OF DECIDING THE ISSUE HAS EXPRE SSED HIS PERSONAL OPINION/PHILOSOPHY IN THOSE CIRCUMSTANCES IT WAS HER EARNEST PRAYER THAT THE DECISION SHOULD NOT BE BASED ON THE GENERAL OPINION EXPRESSED.. ACCORDINGLY EXPRESSING REGRET IT WAS SUBMITTED THAT THE OBSERVATIONS MADE IN THE ORDER MAY NOT BE CONSIDERED AS THE DEPARTMENTAL STAND AS POSSIBLY DUE TO SOME STRANGE MISTAKEN PERSONAL PHILOSOPHY IT MAY HAVE BEEN INCLUDED AS A JUSTIFICATION OF THE PROCEEDINGS BY THE LD. CIT(A) BUT THE PERCEIVED CASUALNESS IF ANY IN THE FINDING MAY KINDLY BE CONSIDERE D A PERSONAL OPINION OF THE CONCERNED OFFICER AND NOT THE DEPARTMENTAL STAND. IT WAS HER FIRM STAND THAT THE DUTY AND RESPONSIBILITY TO ENSURE SERVICE OF NOTICE IS ALWAYS DISCHARGED WITH DUE CARE AND CAUTION BY THE TAX AUTHORITIES AND IS NEVER TAKEN LIGHT LY BY THE DEPARTMENT. IN THE CIRCUMSTANCES, IT WAS HER REQUEST THAT THE ITAT AS THE LAST FACT FINDING AUTHORITY MAY, IN THE FACTS OF THE PRESENT CASE, STEP IN AND CORRECT THE SHORTCOMING NOTICED AND POINTED OUT IN THE ORDER BY THE PARTIES AND CORRECT TH E WRONG AT THE STAGE AT WHICH IT HAS OCCURRED BY SETTING ASIDE THE ORDER AND RESTORING THE ISSUE BACK TO THE FILE OF THE CIT(A) DIRECTING HIM TO RETURN A POSITIVE FINDING WHETHER NOTICE U/S 143(2) HAS BEEN SERVED OR NOT. QUASHING I.T.A .NO. - 1377 /DEL/201 3 PAGE 5 OF 9 THE ASSESSMENT IN THE PEC ULIAR FACTS AND CIRCUMSTANCES, IT WAS SUBMITTED, WOULD NOT MEET THE ENDS OF JUSTICE. THE PERSONAL THOUGHTS/OPINIONS OF THE CIT(A) HAVING TRAVELLED TO THE FINDING, IT WAS SUBMITTED, CANNOT DISTRACT FROM THE FACTUAL POSITION THAT AS PER RECORD THE NOTICE U/S 143(2) HAS BEEN SERVED. THE ASSESSMENT IT WAS SUBMITTED ON FACTS CANNOT BE QUASHED RELYING UPON CIT VS LUNAR DIAMONDS LTD.(CITED SUPRA) AS CANVASSED BY THE LD. AR AS THE SAID DECISION PROCEEDED ON ITS OWN PECULIAR FACTS AND WAS DISTINGUISHABLE ON FACTS. RELIANCE INSTEAD WAS PLACED UPON CIT VS MADHSY FILMS PVT. LTD. 301 ITR 69 (DEL.). 6.3. IT WAS REITERATED THAT THE VIEW EXPRESSED BASED ON SOME PERSONAL THINKING, IT SHOULD NOT BE TAKEN AS AN ACCEPTANCE OF THE INABILITY OF THE REVENUE TO DO THEIR DUTY CAREFULLY AND RESPONSIBLY. IN THE CIRCUMSTANCES, IT WAS HER EARNEST PLEA THAT AN OPPORTUNITY IN GOOD FAITH BE GRANTED TO ADDRESS THE SITUATION AS THE TRIBUNAL AS PER SETTLED LEGAL PRINCIPLES ALWAYS HAS THE INHERENT POWERS TO TAKE CORRECTIVE ACTIONS WHERE VER THE SITUATION IN FACTS AND LAW WARRANTS SUCH AN ACTION. IT WAS HER SUBMISSION THAT THE TRIBUNAL VESTED WITH ALL THE INHERENT POWERS UNDER THE ACT TO SET RIGHT WHAT PATENTLY AND EVIDENTLY IS AN ERROR IN FACT AND LAW MAY IN THE FACTS OF THE PRESENT CASE EXERCISE THE INHERENT POWERS. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION THEREOF, WE FIND THAT ON THE FACE OF IT, THE ISSUE WHICH ARISES FOR CONSIDERATION APPEARS TO BE A SIMPLE QUESTION OF FACT NAMELY WAS THE NOTICE U/S 143(2) SERVED UPON THE ASSESSEE OR NOT. THE QUESTION IF ANSWERED IN FAVOUR OF THE ASSESSEE HAS LEGAL CONSEQUENCES NECESSITATING AS PER SETTLED LEGAL PRINCIPLES THE QUASHING OF THE PROCEEDINGS. HOWEVER THE SIMPLICITY OF THE ISSUE ON THE FACT APPEARS TO HAVE BEEN COMPLICATED BY THE REASONING GIVEN BY THE LD. CIT(A). IN HIS WISDOM THE LD.CIT(A) INSTEAD OF DECIDING THE ISSUE RAISED ON FACTS APPEARS TO HAVE UTILIZED THE OPPORTUNITY TO EITHER EXPRESS HIS PERSONAL OPINION/KNOWLED GE OR EXPERIENCE OF ENORMITY OF THE DIFFICULTIES AND BURDEN FACED BY THE TAX ADMINISTRATION IN MONITORING WHETHER NOTICE TO THE ASSESSEE HAS BEEN SERVED OR NOT WHEN THE TAX ADMINISTRATION IS CHALLENGED IN THE APPELLATE PROCEEDINGS. THE POSITION IN LAW ON T HE SERVICE OF NOTICE U/S 143(2) IS WELL SETTLED. THE ISSUANCE OF NOTICE U/S 143(2) IS MANDATORY I.T.A .NO. - 1377 /DEL/201 3 PAGE 6 OF 9 IN NATURE AS PER SETTLED LEGAL JURISPRUDENCE. IT HAS BEEN INBUILT IN SECTION 143(2) OF THE ACT GIVING VOICE TO THE WELL CELEBRATED RULE OF NATURAL JUSTICE AUD I ALTERAM PARTEM I.E. NO ONE SHOULD BE CONDEMNED UNHEARD. THE POWER OF THE ASSESSING OFFICER IN FINALIZING THE ASSESSMENT U/S143(3) OF THE ACT IS SUBJECTED TO THE CHECK OF FIRST ISSUANCE OF NOTICE U/S 143(2) TO THE ASSESSEE THEREBY PUTTING THE ASSESS EE TO NOTICE THAT ON CONSIDERATION OF THE RETURN OF INCOME FURNISHED, THE AO CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR UNDERPAID THE TAX IN ANY MANNER SETTING OUT CL EARLY THE DATE, TIME AND PLACE FOR THE HEARING. THUS IN CASE WHERE ON A CHALLENGE POSED BY THE TAXPAYER THE REVENUE IS UNABLE TO PROVE ON THE BASIS OF RECORD THAT THE SERVICE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN AFFECTED ON THE TAXPAYER THEN THE CONSE QUENCES IN LAW FOR THIS ERROR IN PROCEDURE NECESSARILY FOLLOW. THE STATUTORY MANDATE INSULATES THE TAX PAYER IN THE EVENT THE RETURN FILED BY IT IS VARIED TO ITS DISADVANTAGE BY NOT FIRST PUTTING THE ASSESSEE TO NOTICE OF THE SAID INTENTION BY THE ASSESSI NG OFFICER BY ISSUANCE OF NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961. IN THE SAID BACKGROUND WE FIND THAT IF THE BASIS OF THE AFORE - SAID FINDING OF THE CIT(A) IS HIS PERSONAL KNOWLEDGE, THEN IT OPENS A MINE FIELD OF DEFENCE FOR INACTION OF THE REVENU E AND IF THE VIEW EXPRESSED IN THE FINDINGS OF THE LD.CIT(A) IS ACCEPTED, IT WILL AMOUNT TO ACCEPTING AND ENDORSING THE INABILITY AT THE FIELD LEVEL OF THE DEPARTMENT TO MONITOR WHETHER NOTICE U/S 143(2) HAS BEEN SERVED UPON THE ASSESSEE OR NOT. EITHER OF THE CONCLUSIONS ARE FRAUGHT WITH GRAVE DANGERS TO THE SYSTEM AND REQUIRED TO BE ADDRESSED AT THE EARLIEST. 8. HOWEVER, BEFORE WE ADDRESS THESE ISSUES, WE FIND ON FACTS THAT BEFORE US THE LD. AR HAS SOUGHT FOR QUASHING THE PROCEEDINGS RELYING UPON THE DECISION OF THE HON BLE HIGH COURT IN THE CASE OF CIT VS LUNAR DIAMONDS (CITED SUPRA). ON A CONSIDERATION OF THE S AID DECISION WE FIND THAT THE DEPARTMENTAL STAND THAT THE ISSUE IS DISTINGUISHABLE MADE OUT BY THE LD.SR.DR CANNOT BE FAULTED W I T H . IT IS SEEN THAT THE FACTUM OF NON - SERVICE OF NOTICE U/S 143(2) WAS NOT BASED ON MERE ORAL STATEMENT OF THE LD.AR BUT WAS SUPP ORTED BY A DULY SWORN AFFIDAVIT OF THE ASSESSEE WHICH REMAINED UNREBUTTED ON RECORD. IN FACT THE REVENUE IN SUPPORT OF ITS CLAIM COULD ONLY PRODUCE AN EMPTY ENVELOPE ON WHICH THE ASSESSEE S NAME WAS WRITTEN. HOWEVER NO ADDRESS WAS PRINTED ON TH E SAME. IN I.T.A .NO. - 1377 /DEL/201 3 PAGE 7 OF 9 THESE CIRCUMSTANCES THEIR LORDSHIPS CONCLUDED THAT IT WAS DOUBTFUL WHETHER THE NOTICE AT ALL HAD BEEN SENT TO THE ASSESSEE. IN THE FACTS OF THE PRESENT CASE WE FIND THAT THERE IS NO AFFIDAVIT OF THE ASSESSEE ON RECORD AND THE EVIDENCE ON RECO RD HAS NOT BEEN CARED TO BE ADDRESSED BY THE LD.CIT(A) IN HIS WISDOM. IT MAY NOT BE OUT OF PLACE TO REFER THAT RULE 10 OF THE ITAT RULES, 1963 MANDATES THAT WHERE A FACT CONTRARY TO RECORD IS ALLEGED THEN THE RULE MANDATES THAT IT SHOULD BE SUPPORTED BY A DULY SWORN AFFIDAVIT WHICH EVIDENTLY IS NOT ON RECORD. IN THE SAID FACTUAL BACKGROUND, WE FIND THAT THE PRAYER OF THE ASSESSEE CANNOT BE ACCEPTED. WE FURTHER FIND THAT IN CIT VS MADHSY FILMS P.LTD. (CITED SUPRA) RELIED UPON BY THE LD.SR.DR ALSO OF THE JURISDICTIONAL HIGH COURT THEIR LORDSHIPS INFACT ALLOWED THE APPEAL OF THE REVENUE HOLDING THAT IN THE ABSENCE OF ANY REBUTTAL BY WAY OF AN AFFIDAVIT OF THE ASSESSEE NOTICE BY SPEED POST WAS DEEMED TO HAVE BEEN SERVED IN THE ORDINARY COURSE OF POST WITHIN 2/3 DAYS BY VIRTUE OF PRESUMPTION UNDER SECTION 27 OF THE GENERAL CLAUSES ACT, 1897 . IN THE FACTS OF THAT CASE NOTICE HAD BEEN SENT TO THE ADDRESS INDICATED IN THE RETURN OF INCOME DISPATCHED BY SPEED POST AND HAD NOT BEEN RECEIVED BACK. IN THE SAID BA CKGROUND HOLDING THAT THE PRAYER OF THE LD. AR IN THE FACTS ON RECORD IS NOT MAINTAINABLE, WE NOW PROPOSE TO ADDRESS THE ISSUES ARISING FROM THE FINDINGS OF THE FIRST APPELLATE AUTHORITY. 9. IN ORDER TO INVITE ATTENTION TO THE GRAVITY OF THE ISSUE, WE REFE R TO THE FOLLOWING THE SPEAKING OBSERVATIONS OF THE HON BLE APEX COURT IN THE CASE OF PARSHURAM POTTERY WORKS CO.LTD. VS ITO (1997) 106 ITR 1 (SC) WHERE THEIR LORDSHIPS ADDRESSING THE LAPSES COMMITTED BY THE DEPARTMENT WERE MOVED TO OBSERVE IN PARA 16 : - IT HAS BEEN SAID THAT THE TAXES ARE THE PRICE, WE PAY FOR CIVILIZATION. IF SO IT IS ESSENTIAL THAT THOSE WHO ARE ENTRUSTED WITH THE TASK OF CALCULATING AND REALIZING THAT PRICE SHOULD FAMILIARIZE THEMSELVES WITH THE RELEVANT PROVISIONS AND BECOME WELL VE RSED WITH THE LAW ON THE SUBJECT. ANY REMISSION ON THEIR PART CAN ONLY BE AT THE COST OF THE NATIONAL EXCHEQUER AND MUST NECESSARILY RESULT IN LOSS OF REVENUE. (EMPHASIS PROVIDED) 10. IT NEED NOT TO BE EMPHASIZED THAT IT IS THE ISSUANCE OF NOTICE U/S 143(2) WHICH EMPOWERS THE AO TO PASS AN ORDER U/S 143(3) AND IN CASE THE AO IS UNABLE TO ENSURE THE SERVICE OF THE SAID NOTICE THEN RELYING UPON THE PRINCIPLES SETTLED BY THE APEX COURT IN THE CASE OF PARSURAM POTTERY WE DID WONDER WHY I.T.A .NO. - 1377 /DEL/201 3 PAGE 8 OF 9 THE ASSESSMENT MADE IN THE ABSENCE OF NOTICE U/S 143(2) SHOULD NOT BE QUASHED. THE SAID COURSE OF ACTION IN THE PECULIAR FACTS OF THE CASE CONTEMPLATED AT THE TIME OF DICTATION ON CONSIDERATION WAS GIVEN UP ON ACCOUNT OF THE FACTS RECORDED IN THE EARLIER PART OF THIS ORDER, NAMELY THAT THE FACTS ARE NOT ASCERTAINED AS THE LD.CIT(A FAILED TO GIVE A CLEAR CUT FINDING . HAVING SO SAID, WE LEAV E IT TO THE TAX ADMINISTRATIVE FOR TAKING APPROPRIATE ACTIONS BY DIRECTING THE REGISTRY TO MARK THIS SPECIFIC ORDER FOR CONSIDERATION OF THE CHAIRMAN, CBDT WHO MAY CONSIDER TAKING APPROPRIATE CORRECTIVE ACTIONS AT THE LEAST THAT THE CONCERNED OFFICERS WHO ADMINISTER THE LAW NOT ONLY KNOW THE LAW BUT ALSO RESP ECT THE LAW AS APPOINTMENT OF UNSUITABLE PERSONS TO THESE SENSITIVE POS ITIONS SERIOUSLY UNDERMINES THE FAITH IN THE CAPABILITY AND FAIRNESS OF THE TAX ADMINISTRATION WHICH SHOULD ALWAYS REMAIN BEYOND REPROACH. IF WHAT IS CONCLUDED BY THE LD. CIT(A) IS COR RECT THEN THERE IS NO LEGAL MANDATE FOR THE REVENUE TO VARY THE RETURNED INCOME, RE - OPEN THE CONCLUDED ASSESSMENTS ETC. IT WOULD LAY THE REVENUE OPEN TO THE UNFOUNDED CRITICISM OF THE TAX PAYERS THAT THE FATE OF THE TAX PAYER I S OPEN TO THE ARBITRARY EXER CISE OF POWER BY THE TAX DEPARTMENT TO THE DETRIMENT OF THE RIGHTS AND SAFETY OF THE TAX PAYER IN THE FACE OF THE PERCEIVED AUTHORITY OF THE TAX DEPARTMENT TO SELECTIVELY AND MISCHIEVOUSLY ABUSE THE POWER UNDER THE SHELTER OF THE ARGUMENT THAT SHEER NUMBE RS DEFEAT THE MANDATORY EXERCISE. EVEN IF THE VIEW EXPRESSED IS ONLY AN OPINION BASED ON THE PERSONAL MISREADING OF THE PROCEDURE BY THE LD. CIT(A) UNDER A MISTAKEN BELIEF THAT ISSUANCE OF NOTICE U/S 143(2) IS AN EMPTY FORMALITY INSPITE OF THE LEGAL POS ITION ON THIS STATUTORY MANDATE, THEN IT THROWS A VERY PUBLIC GLARE ON THE SERIOUS MALAISE WHICH THE TAX ADMINISTRATION CAN BE SAID TO BE INFECTED WITH AND IN SUCH A SITUATION ALSO WE ARE CONFIDENT THAT THE COMPETENT AUTHORITY IN THE DEPARTMENT WOULD BE EQUALLY CONCERNED TO ADDRESS THE SITUATION AND SEND OUT CORRECT SIGNALS AT THE EARLIEST POINT OF TIME. 11 . HAVING EXPRESSED OUR ANGUISHED DISSATISFACTION WITH THE REASONING ARRIVED AT IN THE IMPUGNED ORDER, THE IMPUGNED ORDER IS SET ASIDE AND THE ISSUE I S RESTORED BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO DECIDE THE SAME AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD BY WAY OF A SPEAKING ORDER IN ACCORDANCE WITH LAW . THE FINDING ON MERITS IS ALSO SET ASIDE I.T.A .NO. - 1377 /DEL/201 3 PAGE 9 OF 9 AS FIRST AS PER SE TTLED LEGAL PRINCIPLES THE CIT(A) SHALL DECIDE THE JURISDICTIONAL ISSUE AND THEN PROCEED TO DECIDE THE APPEAL ON MERITS IF SO WARRANTED ON FACTS. 1 2 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN T HE OPEN COURT ON 0 7 T H OF AUGUST , 2015. S D / - S D / - ( J.S.REDDY ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 0 7 / 0 8 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI