Zafar Alam, Meerut V. ITO, Ward- 1(1), Meerut

ITA 1609/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5371 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUNSHI RAM BIHAGRA SENIOR
• Keywords: Unexplained investment; Peak credit
• Section: 271(1)(b); 142(1); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCHES (CAMP AT MEERUT) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1609/DEL./2018 (ASSESSMENT YEAR : 2009-10) ITA NO.1610/DEL./2018 (ASSESSMENT YEAR : 2009-10) SHRI ZAFAR ALAM, VS. ITO, WARD 1 (1), C/O SHRI VINOD KUMAR GOEL, MEERUT. 282, BOUNDARY ROAD, CIVIL LINES, MEERUT. (PAN : ADHPA7371C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VINOD KUMAR GOEL, ADVOCATE REVENUE BY : SHRI MUNSHI RAM BIHAGRA, SENIOR DR DATE OF HEARING : 11.01.2019 DATE OF ORDER : 29.01.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN BOTH THE AFORESAID APPEALS, THE SAME ARE BEING D ISPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DI SCUSSION. 2. THE APPELLANT, SHRI DINESH KUMAR (HEREINAFTER RE FERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL I.E. I TA NO.1610/DEL/2018, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED ITA NO.1609 & 1610/DEL./2018 2 27.12.2017 PASSED BY LD. CIT (APPEALS), MEERUT QUA THE ASSESSMENT YEAR 2009-10 ON THE GROUNDS INTER ALIA T HAT :- 1. THAT CIT(A) IS IN ERROR IN MAKING ADDITION OF R S. 5% OF TOTAL TURNOVER OF RS.42,50,993/- BY APPLYING SECTION 44AF AND TREATED NET PROFIT @ 5% OF RS. 2,12,550/- BUT CIT(A) IS IN ERROR IN HOLDING THAT O UT OF TURNOVER PEAK CREDIT OF RS.3,39,035/- ALSO ADDED IN THE INCOME OF PEAK BALANCE IN THE BANK ACCOUNT OF SAME TURNOVER AS UNEXPLAINED INCOME. THEREFORE, CIT(A) H AS MADE ADDITION OF RS.3,39,035/- AS INCOME OF THE ASSESSEE IS AGAINST THE FACTS AND LAW. 2. THAT THE ASSESSEE HAS FURNISHED THE INCOME TAX RETURN WITH INCOME TAX OFFICER, WARD-2(4), MEERUT A S HIS NAME IS ZAFAR ALAM BECAUSE THE JURISDICTION OF THE CASE LIE WITH INCOME TAX OFFICER, WARD-2(4), MEERUT BUT THE INCOME TAX OFFICER, WARD-1(1) HAS ISSUED NOTICE U/S 148, 142(1) AND 147 IN THE NAME OF ALAM ZAFAR. THEREFORE, ALL THE NOTICES ISSUED BY THE A.O . IS BAD IN LAW IN VIEW OF A.O. DOES NOT HAVE JURISDICTI ON BUT AFTER CHANGE THE NAME OF THE ASSESSEE ZAFAR ALAM TO ALAM ZAFAR, HE TRYING TO CREATE JURISDICTION WHICH IS BAD IN LAW. 3. THE APPELLANT, SHRI DINESH KUMAR (HEREINAFTER RE FERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL I.E. I TA NO.1609/DEL/2018, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 04.01.2018 BY CONFIRMING THE PENALTY ORDER DATED 15 .05.2017 PASSED U/S 271(1)(B) OF THE INCOME-TAX ACT, 1961 (F OR SHORT THE ACT) PASSED BY LD. CIT (APPEALS), MEERUT QUA THE A SSESSMENT YEAR 2009-10 ON THE GROUNDS INTER ALIA THAT :- 1. THAT NO NOTICE UNDER SECTION 148, 147, 144 AND 142(1) WAS RECEIVED BY THE ASSESSEE BECAUSE NAME OF THE ITA NO.1609 & 1610/DEL./2018 3 ASSESSEE APPEAR IN THE ASSESSMENT ORDER AND NOTICES AS ALAM ZAFAR. HOWEVER, AS PER PAN NAME OF THE ASSESSE E IS ZAFAR ALAM, HENCE ASSESSMENT COMPLETED U/S 147 R.W.S. 144 IS BAD IN LAW. LD. CIT(A) HAS NOT CONSID ERED THE SAME. 2. THAT THE PENALTY IMPOSED U/S 271 (1)(B) BY THE A.O. IS NOT PERMITTED IN LAW AS NO NOTICE WAS EVER SERVED UPON THE ASSESSEE AND PENALTY IMPOSED BY THE A.O. OUT OF JURISDICTION. ITA NO.1610/DEL/2018 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSING OFFICER FRAMED ASSESSMENT UNDER SECTION 144/147 OF THE INCOME-TAX ACT, 1961 ( FOR SHORT THE ACT) BY MAKING ADDITION OF RS.42,50,993/- DEPOSITE D AS CASH IN SAVING BANK ACCOUNT ON ACCOUNT OF UNEXPLAINED INVES TMENT U/S 68 OF THE ACT. 5. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (APPEALS) WHO HAS ESTIMATED THE PROFIT BY A PPLYING THE PROVISIONS OF SECTION 44AF OF THE ACT @ 5% AND THER EBY TREATED AN AMOUNT OF RS.2,12,550/- ON ACCOUNT OF PROFIT AS UNE XPLAINED INCOME OF THE YEAR UNDER ASSESSMENT. THE CIT (A) A LSO TREATED AN AMOUNT OF RS.3,39,035/- AS UNEXPLAINED INCOME OF TH E YEAR UNDER ASSESSMENT BY TAKING THE PEAK VALUE OF INVESTMENT B Y PARTLY ALLOWING THE APPEAL. FEELING AGGRIEVED, THE ASSESSE E HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL. ITA NO.1609 & 1610/DEL./2018 4 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. SO FAR AS QUESTION OF ESTIMATING THE PROFIT @ 5% TO THE TUNE OF RS.2,12,550/- U/S 44AF OF THE ACT AS UNEXPLAINE D INCOME BY LD. CIT (A) IS CONCERNED, THE LD. AR FOR THE ASSESSEE H AS ACCEPTED THE SAME AND HAS NOT PRESSED GROUND NO.1 TO THAT EXTENT . SO, WE CONFIRM THE FINDINGS OF LD. CIT (A) AS TO ESTIMATIN G THE PROFIT @ 5% OF THE TOTAL TURNOVER OF RS.42,50,993/-. 8. HOWEVER, LD. AR FOR THE ASSESSEE CHALLENGED THE ADDITION OF RS.3,39,035/- MADE BY THE LD. CIT (A) BY TAKING PEA K VALUE OF INVESTMENT BEING UNEXPLAINED INVESTMENT ON THE GROU ND THAT WHEN PROFIT HAS BEEN ESTIMATED @ 5% OF THE TOTAL TURNOVE R, THE PEAK VALUE OF INVESTMENT OF RS.3,39,035/- AS UNEXPLAINED INCOME CANNOT BE MADE. WE ARE INCLINED TO AGREE WITH THE CONTENT ION RAISED BY THE LD. AR BECAUSE WHEN PROFIT @ 5% ON THE TOTAL TU RNOVER HAS BEEN ESTIMATED BY THE LD. CIT (A) THEN PEAK VALUE O F THE INVESTMENT CANNOT BE TREATED AS UNEXPLAINED INCOME WHICH WOULD OTHERWISE AMOUNT TO DOUBLE ADDITION WHICH IS NOT PE RMISSIBLE UNDER THE ACT. SO, WE ORDER TO DELETE THE ADDITION OF RS.3,39,035/- ITA NO.1609 & 1610/DEL./2018 5 MADE BY THE LD. CIT (A) BY MAKING THE PEAK VALUE OF THE INVESTMENT. 9. GROUND NO.2 IS DISMISSED HAVING NOT BEEN PRESSED DURING THE COURSE OF ARGUMENTS. 10. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, PRESE NT APPEAL BEING ITA NO.1610/DEL./2018 FILED BY THE ASSESSEE I S PARTLY ALLOWED. ITA NO.1609/DEL/2018 11. ASSESSING OFFICER INITIATED THE PENALTY PROCEED INGS U/S 271(1)(B) ON THE GROUND THAT THE ASSESSEE HAS FAIL ED TO COMPLY WITH THE NOTICE ISSUED U/S 142 (1) OF THE ACT ON 27 .07.2016 AND FURTHER NOTICE U/S 144 WAS ISSUED ON 09.12.2016 AND 23.12.2016 AND CONSEQUENTLY COMPLETED THE ASSESSMENT U/S 144/1 47 OF THE ACT ON 30.12.2016. AO, AFTER TREATING THE ASSESSEE AS A DEFAULTER, LEVIED THE PENALTY OF RS.10,000/- U/S 271(1)(B) OF THE ACT. 12. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (APPEALS) WHO HAS CONFIRMED THE PENALTY LEV IED BY THE AO BY DISMISSING THE APPEAL. FEELING AGGRIEVED, THE AS SESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 13. IT IS THE CATEGORIC CASE OF THE ASSESSEE THAT T HE NOTICE U/S 148 OF THE ACT HAS NEVER BEEN SERVED UPON HIM AS THE AS SESSMENT ORDER ITA NO.1609 & 1610/DEL./2018 6 ITSELF SHOWS THAT THE NOTICE WAS SENT THROUGH SPEED POST IN THE NAME OF ALAM ZAFAR WHEREAS ASSESSEES NAME IS ZAFAR ALAM . ASSESSEES CONTENTION IS SUSTAINABLE AS THE NOTICES HAVE BEEN SENT TO THE ASSESSEE FOR COMPLIANCE IN THE NAME OF ALAM ZAFAR W HICH COULD NOT HAVE BEEN EXPECTED TO HAVE BEEN SERVED ON THE A SSESSEE WHO IS ADMITTEDLY KNOWN AS ZAFAR ALAM BY ANY STRETCH OF IM AGINATION. 14. EVEN THE REVENUE HAS NOT BROUGHT ON RECORD ANY ACKNOWLEDGEMENT BEARING SIGNATURES OF THE ASSESSEE IN TOKEN OF HAVING RECEIVED THE REPEATED NOTICES ISSUED BY THE AO. THE LD. CIT (A) HAS CONFIRMED THE PENALTY ON THE BASIS OF A SSUMPTIONS AND PRESUMPTIONS THAT WHEN THE NOTICE TO THE ASSESSEE W AS ISSUED IN THE NAME OF ALAM ZAFAR IN PENALTY PROCEEDINGS AND HE AT TENDED THE PENALTY PROCEEDINGS THEN HE MUST HAVE BEEN SERVED I N THE QUANTUM PROCEEDINGS ALSO. HOWEVER, WE ARE OF THE CONSIDERE D VIEW THAT PENALTY CANNOT BE IMPOSED ON THE BASIS OF ASSUMPTIO NS AND PRESUMPTIONS RATHER TO LEVY THE PENALTY THE REVENUE HAS TO MAKE OUT A CATEGORIC CASE THAT THE ASSESSEE WAS SERVED U PON BY PROVING ON RECORD ACKNOWLEDGEMENTS TO SHOW THAT ASSESSEE HA S RECEIVED THE NOTICE AND HAS FAILED TO COMPLY WITH THE SAME B Y ATTENDING THE PROCEEDINGS. 15. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT WHEN THE REVENUE HAS FAILED TO PROVE THE ITA NO.1609 & 1610/DEL./2018 7 SERVICE OF NOTICE UPON THE ASSESSEE, QUESTION OF LE VYING THE PENALTY U/S 271(1)(B) DOES NOT ARISE, HENCE PENALTY LEVIED U/S 271(1)(B) IS ORDERED TO BE DELETED. CONSEQUENTLY, THIS APPEAL BE ING ITA NO.1609/DEL/2018 FILED BY THE ASSESSEE IS ALLOWED. 14. RESULTANTLY, THE APPEAL BEING ITA NO.1610/DEL/2 018 IS PARTLY ALLOWED AND APPEAL IN ITA NO.1609/DEL/2018 I S ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF JANUARY, 2019. SD/- SD/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 29 TH DAY OF JANUARY , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.