Delhi Kalyan Samiti, New Delhi V. ITO (E), Delhi

ITA 1693/DEL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86913 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-12-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 15-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSMENT YEARS TO A
• Assessee Lawyers: OTHER THREE APPEALS; ASSESSMENT YEAR TO
• Keywords: Procedural lapse; Assessment record; Benefit of exemption; Revised return; Reason to believe
• Section: 143(3); 142(1); 12A; 147; 148; 144; 11; 139

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI S.V.MEHTORA , ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 1693 /DEL/ 2010 (ASSESSMENT YEAR: 2000 - 01 ) ITA NO. 1694 /DEL/ 2010 (ASSESSMENT YEAR: 2001 - 02 ) ITA NO. 1695 /DEL/ 2010 (ASSESSMENT YEAR: 2002 - 03 ) DELHI KALYAN SAMITI, GOVT. OF NCT OF DELHI, FINANCE DEPARTMENT, 4 TH LEVEL WING - A, DELHI SECRETARIAT, IP ESTATE , NEW DELHI PAN:AAALD0236B VS. ITO(E), TRUST WARD III, DELHI (APPELLANT) (RESPONDENT) ITA NO. 1770 /DEL/ 2010 (ASSESSMENT YEAR: 2003 - 04 ) ITA NO. 1771 /DEL/ 2010 (ASSESSMENT YEAR: 2004 - 05 ) ITA NO. 1772 /DEL/ 2010 (ASSESSMENT YEAR: 2005 - 06 ) ITO, TRUST WARD III, AAYAKAR BHAWAN, LAXMI NAGAR, DISTT CENTRE DELHI VS. DELHI KALYAN SAMITI, GOVT. OF NCT OF DELHI, FINANCE DEPARTMENT, 4 TH LEVEL WING - A, DELHI SECRETARIAT, IP ESTATE NEW DELHI PAN:AAALD0236B (APPELLANT) (RESPONDENT) DATE OF HEARING 09 . 12 . 2014 DATE OF PRONOUNCEMENT 04 . 03 .2015 O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THESE SIX APPEALS OF WHICH THREE APPEALS ARE PREFERRED BY THE ASSESSEE FOR ASSESSMENT YEAR 2001 TO 2002 - 03 AND THE OTHER THREE APPEALS BY REVENUE FOR THE ASSESSMENT YEARS 2003 - 04 TO 2005 - 06 AGAINST THE ORDER S OF THE LD CIT(A) - XXI, NEW APPELLANT BY : SH. RAJESH, MANU GIRI, ADV RESPONDENT BY : PARWINDER KAUR, SR. DR PAGE 2 OF 15 DELHI DATED 29.01.2010 . SINCE ISSUES ARE COMMON FOR ALL THE APPEALS OF THE ASSESSEE WE TAKE UP THE APPEAL FOR ASSESSMENT YEAR 2000 - 01 FOR DISPOSAL. 2. FOUR GROUNDS HAVE BEEN RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2000 - 01 AND ARE AS UNDER: - 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE ORDER OF ASSESSMENT FRAMED UN DER SECTION 144/148 OF THE ACT DATED 24.12.2007 IN DETERMINING THE INCOME OF THE APPELLANT AT RS.3,79,00,000/ - . 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE ACT AND ALSO THE ASSE SSMENT FRAMED UNDER SECTION 144/ 148 OF THE ACT WITHOUT APPRECIATING THAT THERE WAS NO MATERIAL ON RECORD MUCH LESS VALID MATERIAL TO ALLEGE THAT INCOME OF THE APPELLANT HAD ESCAPED ASSESSMENT AND AS SUCH, INITI ATION OF PROCEEDINGS AND ASSESSMENT FRAMED WERE WITHOUT JURISDICTION AND THEREFORE, DESERVE TO BE QUASHED AS SUCH. 2.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT IN ABSENCE OF ANY VALID APPROVAL FROM THE LEARNED A DDITIONAL COMMISSIONER OF INCOME TAX FOR INITIATION OF PROCEEDINGS UNDER SECTION 148 OF THE ACT, INITIATION OF PROCEEDINGS WAS OTHERWISE NOT IN ACCORDANCE WITH LAW AND THEREFORE, DESERVE TO BE QUASHED AS SUCH. 3. THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS ALSO ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE ASSESSMENT FRAMED UNDER SECTION 144 / 148 OF THE ACT WITHOUT APPRECIATING THAT SINCE NO NOTICE UNDER SECTION 143 OF THE ACT HAD BEEN SERVED ON THE APPELLANT SUBSEQUENT TO FILING OF RETURN O F INCOME ON 19.12.2007 IN RESPONSE TO A NOTICE UNDER SECTION 148 OF THE ACT AND PRIOR TO THE FRAMING OF ASSESSMENT ON 24.12.2007, ASSESSMENT FRAMED IS WITHOUT JURISDICTION AND NOT TENABLE. 3.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN UPHO LDING THE AFORESAID ASSESSMENT, HAS OVERLOOKED THE DECISION OF THE HON'BLE TRIBUNAL IN THE CASE OF CHANDRA R. GANDHI REPORTED IN 122 TTJ 786 AND DECISION IN THE CASE OF ITO VS. R.K. GUPTA REPORTED IN 308 ITR 49 (AT) (DELHI) AND AS SUCH, FINDINGS SO RECORDE D BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE NOT IN ACCORDANCE WITH LAW AND THEREFORE, UNSUSTAINABLE. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN HOLDING THAT SINCE RETURNS WERE FILED BEYON D THE TIME STATED IN THE NOTICE UNDER SECTION 148 OF THE ACT DESPITE THE FACT THAT NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AFTER FILING A RETURN OF INCOME, ASSESSMENT FRAMED WAS VALID. THE FINDING SO RECORDED IS LEGALLY MISCONCEIVED AND NOT TE NABLE. IN FACT, RETURN OF INCOME FILED ON 19.12.2007 THOUGH WAS FILED BEYOND PAGE 3 OF 15 THE TIME PRESCRIBED IN NOTICE UNDER SECTION 148 OF THE ACT WAS A VALID RETURN OF INCOME THEREFORE, NOTICE ISSUED AND ASSESSMENT FRAMED WAS WITHOUT JURISDICTION AND THEREFORE, DESE RVE TO BE QUASHED AS SUCH. 3.3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN UPHOLDING THE DETERMINATION OF INCOME OF THE APPELLANT AT RS. 3,79,00,000/ - FOR ASSESSMENT YEAR 2000 - 01 WHICH IS NOT IN ACCORDANCE WITH LAW AND THEREFORE, NOT TENABLE . 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEVY OF INTEREST UNDER SECTION 234 B OF THE ACT WHICH IS NOT LEVIABLE ON THE FACTS OF THE INSTANT CASE. 3. GROUND NO. 1,2 AND 2.1 ARE AGAINST THE JURISDICTION OF THE AO TO REOPEN THE PROCEEDINGS AGAINST THE ASSESSEE AS PER SECTION 147 READ WITH SECTION 148 OF THE ACT. 4. THE BRIEF FACTS OF THE CASE AS NOTED BY THE LD CIT(A ) ARE THAT APPELLANT IS A SOCIETY FORMED BY THE GOVERNMENT OF N ATIONAL CAPITAL TERRITORY OF DELHI AND REGISTERED UNDER THE SOCIETIES REGISTRATION ACT VIDE CERTIFICATE OF REGISTRATION DATED 31.03.1995. THE APPELLANT SOCIETY APPLIED FOR REGISTRATION IN FORM NO. 10A ON 30.06.2005 AND, IN PURSUANCE THERETO, IT HAD BEEN GR ANTED REGISTRATION UNDER SECTION 12A OF THE INCOME TAX ACT VIDE ORDER OF REGISTRATION DATED 12.01.2006 BY DIRECTOR OF INCOME TAX (EXEMPTIONS), DIT(E) NEW DELHI. THE SAID REGISTRATION WAS GRANTED W.E.F. 01.04.2005 AND, ACCORDINGLY APPLIES FOR ASSESSMENT YEA R 2006 - 07 ONWARDS. FROM THE APPLICATION FILED BY THE ASSESSEE FOR REGISTRATION BEFORE DIT(E) , IT CAME TO LIGHT THAT, APPELLANT SOCIETY WAS ESTABLISHED AS A RESULT OF CABINET DECISION NO. 125 DATED 16.03.1995, WHEREBY AN AMOUNT OF RS. 38.74 CRORES OUT OF T HE ERSTWHILE LOTTERY FUND (WHICH WAS LYING AS FIXED DEPOSIT) WAS TRANSFERRED TO THE WELFARE FUND OF THE ASSESSEE SOCIETY. NOTICING THIS FACT , THE ASSESSING OFFICER WAS OF THE OPINION THAT, THE AMOUNT TRANSFERRED FROM DELHI LOTTERY WAS AVAILABLE IN ALL THE SUBSEQUENT YEARS, AS WAS ALSO EVIDENT FROM THE COPIES OF ACCOUNT FOR THE YEAR ENDED 31.03.2002 TO 31.03.2004, WHEREIN, LIABILITY OF RS. 53.26 CRORES ON ACCOUNT OF 'DEPOSIT TRANSFERRED FROM DELHI LOTTERIES' APPEARS IN THE BALANCE SHEET FOR THE YEAR END ED 31.03.2002, 31.03.2003 AND 31.03.2004. THESE ACCOUNTS HAD BEEN ENCLOSED ALONG WITH THE APPLICATION FOR REGISTRATION U/S 12A FILED BY THE ASSESSEE BEFORE DIT(E). AO , THEREFORE, WAS OF THE PAGE 4 OF 15 BELIEF THAT, INCOME OF THE APPELLANT SOCIETY HAD ESCAPED ASSESSMENT SINCE NEITHER REGISTRATION U/S 12A OF THE ACT WAS GRANTED FOR EACH OF THE THREE ASSESSMENT YEARS NAMELY I.E, 2000 - 01,2001 - 02 AND 2002 - 03 AND, NOR RETURNS OF INCOME WERE FILED BY THE APPELLANT SOCIETY. IN VIEW THEREOF, THE ASSESSING OFFICER ISSUED NOTICES U /S 148 OF THE ACT DATED 29.03.2007 WHICH WERE SERVED ON ASSESSEE ON 30.03.2007. THAT IN PURSUANCE TO THE ABOVE NOTICES, THE ASSESSING OFFICER DETERMINED THE INCOME OF THE APPELLANT IN THREE SEPARATE ORDERS OF ASSESSMENT DATED 24.12.2007 IN THE FOLLOWING MA NNER: SR. ASSESSMENT ESTIMATED INTEREST (LESS) ESTIMATED NET TAXABLE NO. YEAR INCOME EXPENDITURE INCOME 1 2000 - 01 3,87,00,000/ - 8,00,000/ - 3,79,00,000/ - 2. 2001 - 02 3,87,00,000/ - 10,00,000/ - 3,77,00,000/ - 3. 2002 - 03 3,83,00,000/ - 10,35,000/ - 3,72,65,000/ - 5 . THE ASSESSEE RAISED OBJECTIONS FOR INITIATION OF REOPENING PROCEEDINGS BEFORE THE AO WHICH WAS REJECTED BY THE AO, WHO PROCEEDED TO ESTIMATE THE INTEREST I NCOME FROM THE FDRS FOR ASSESSMENT YEAR 2000 - 01 FOR DETERMINING OF INTEREST INCOME AT RS.3,79,00,000/ - , RS.3,77,00,000/ - AND RS.3,72,65,000/ - FOR ASSESSMENT YEARS 2000 - 01 , 2001 - 02 AND 2002 - 03 RESPECTIVELY. 6 . AGGRIEVED BY THE SAID ORDER OF THE AO , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT(A) RAISING VARIOUS GROUNDS INCLUDING THE AFORESAID JURISDICTION ISSUE WHICH WAS DISMISSED. AGGRIEVED BY THE SAID ORDER OF THE LD CIT(A), THE ASSESSEE IS BEFORE US. 7 . LD AR CONTENDED THAT THERE WAS NO MATERIAL MUCH LESS VALID MATERIAL, WHICH HAD NEXUS WITH THE FORMA TION OF THE REQUISITE BELIEF REQUIRED AS STIPULATED U/S 147 READ WITH SECTION 148 OF THE ACT BEFORE INITIATION OF NOTICES FOR REOPENING THE ASSESSMENT. IT WAS CONTENDED BY THE LD AR THAT A MERE PERUSAL OF THE REASONS RECORDED BY THE AO WOULD SHOW THAT, NOT ICE WAS ISSUED IN VIEW OF THE PURPORTED INFORMATION RECEIVED FROM DIT(E) DELHI, WHEREIN, IT HAS BEEN ALLEGED THAT APPELLANT RECEIVED DEPOSIT FROM DELHI LOTTERY FUND . IT WAS SUBMITTED BY THE LD AR THAT THE MERE FACT OF RECEIPT OF INFORMATION CANNOT BE THE B ASIS TO ALLEGE THAT INCOME OF THE APPELLANT HAS ESCAPED ASSESSMENT, MORE PARTICULARLY WHEN PAGE 5 OF 15 SUCH PURPORTED INFORMATION HAD NOT EVEN BEEN CONFRONTED TO THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS, THUS, SUBMITTED THAT THE REASONS RECORDED AR E HIGHLY VAGUE, INDEFINITE, FAR - FETCHED, REMOTE AND CAN NOT BY ANY STAN DARD OF IMAGINATION L E A D TO A CONCLUSION OF THE ESCAPEMENT OF INCOME AND THEY ARE MERELY PRESUMPTUOUS IN NATURE. IN OTHER WORDS, ACCORDING TO THE LD AR THE PROCEEDINGS INITIATED ARE BASED ON MERE SUSPICION AND THAT REASON TO SUSPECT IS NOT THE SAME THING AS REASON TO BELIEVE AND RELIED ON THE CASE OF HON'BLE SUPREME COURT, IN THE CASE OF CIT VS INDIAN OIL CORPORATION REPORTED IN 159 ITR 956, WHEREIN, IT HAS BEEN HELD THAT THE, 'RE ASON TO BELIEVE' IS NOT THE SAME THING AS 'REASON TO SUSPECT'. IN VIEW OF THE AFORESAID, CONTENTIONS, LD AR PRAYED THAT THE PROCEEDINGS INITIATED BY INVOKING' THE PROVISIONS OF SECTION 147 OF THE ACT AND, ASSESSMENTS FRAMED THEREAFTER ARE NON - EST IN LAW AN D, WITHOUT JURISDICTION AND THEREFORE IT NEEDS TO BE QUASHED . 8 . THE LD DR RELIED ON THE ORDER OF THE LD CIT(A). 9 . WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE RECORDS AND HAVE GONE THROUGH THE CASE LAWS CITED BEFORE US. IT IS NO LONGER RES - INTEG RA, THAT BEFORE ISSUING A NOTICE U/S 148, THE AO MUST HAVE REASONS TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR WHICH HE INTENDS TO REOPEN/REASSESS. UNLESS THE AO RECORDS THE REASON TO BELIEVE THAT INCOME CHAR GEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THAT YEAR, THE AO HAS NO JURISDICTION TO ISSUE NOTICE U/S 148 OF THE ACT. BEFORE ISSUANCE OF NOTICE U/S 148 OF THE ACT, IT IS A CONDITION PRECEDENT TO RECORDS HIS SATISFACTION AS TO WHAT MAKES HIM BELIEVE THAT INCOM E CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. SECTION 148(2) MANDATES THE AO TO RECORD HIS REASON BEFORE ISSUANCE OF NOTICE U/S 148. SINCE THE STATUTE MANDATES THE AO TO DO SUCH A EXERCISE BEFORE ISSUANCE OF NOTICE U/S 148, THEN ONLY THE AO ACQUIRE JURISDICTION TO REASSESS THE ASSESSEE. IN THE SAID WELL SETTLED LAW, WHEN THERE IS A CHALLENGE TO ASSUMPTION OF JURISDICTION TO ISSUE NOTICE U/S 148 OF THE ACT. THE SATISFACTION OF THE AO MUST BE BASED ON THE INFORMATION RECEIVED B Y HIM ; AND IT MUST BE AN OBJECTIVE SATISFACTION; AND THE SAME MUST EMERGE FROM A READING OF THE SAID REASONS RECORDED AND IT CANNOT BE INFERRED OR IMPLIED OR DEDUCED AND THAT, IT IS PAGE 6 OF 15 THE REASON S THUS RECORDED BY THE ASSESSING OFFICER ALONE, WHICH CAN BE THE BASIS OF ASSUMING JURISDICTION. WE AGREE THAT THE PRECONDITION FOR INVOKING SECTION 147 OF THE ACT IS THAT THERE MUST BE INFORMATION / MATERIAL BEFORE THE AO TO HAVE REASON S TO BELIEVE WHICH MUST BE THE BASIS FOR THE AO TO FORM SATISFACTION AS ENVISAGED U/S 147 THAT INCOME OF THE APPELLANT HAS ESCAPED ASSESSMENT. THEREFORE IT IS A PPOSITE TO REPRODUCE THE SATISFACTION NOTE RECORDED BY THE AO FOR THE RELEVANT ASSESSMENT YEARS (2000 - 01 TO 2002 - 03) WHICH IS REPRODUCED BY THE LD CIT(A) IN HIS ORDER AS UNDER: - 5.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT, PERUSED THE MATERIAL ON RECORD. THE REASONS RECORDED FOR ASSESSMENT YEAR 2000 - 01 FOR INITIATING ACTION U/S 147 OF THE ACT ARE AS UNDER: ' THE DELHI KALYAN SAMITI WAS INCORPORATED ON 31.3.1995 AS A REGISTERED SOCIETY. NO RETURN OF INCOME HAS BEEN FILED FOR THE ASSESSMENT YEAR 2000 - 01. VIDE LETTER NO. 32820 DATED 23.03.2007 OR DIT(E) DELHI IT WAS INFORMED THAT THE SAMITI HAD APPLIED FOR REGISTRATION U/S 12A ON 13.07.2005 AND HAS BEEN GRANTED REG ISTRATION W.E.F. 01.04.2005. ALONG WITH THE APPLICATION FOR REGISTRATION U/S 12A DATED 13.07.2005, FILED BY THE ASSESSEE BEFORE THE DIT(E), DELHI A COPY OF THE INSTRUMENT UNDER WHICH THE SAMITI WAS ESTABLISHED, NAMELY, A COPY OF CABINET DECISION 125 DATED 16.3.1995 HAS BEEN ENCLOSED. AS PER THIS DECISION AN AMOUNT OF RS. 38.74 CRORES OUT OF THE ERSTWHILE LOTTERY FUND WHICH WAS LYING AS FIXED DEPOSIT WAS TO BE TRANSFERRED TO THE WELFARE FUND OF THE ASSESSEE SOCIETY. THE ASSESSEE HAS CONTINUED TO HOLD THE A MOUNT TRANSFERRED FROM DELHI LOTTERY IN ALL SUBSEQUENT YEARS AS EVIDENT FROM THE COPIES OF ACCOUNT FOR THE YEAR ENDED 31.03.2002 TO 31.03.2004 WHEREIN A LIABILITY OF RS. 53.26 CRORES ON ACCOUNT OF 'DEPOSIT TRANSFERRED FROM DELHI LOTTERIES 'APPEARS IN THE B ALANCE SHEET FOR THE Y.E. 31.03.02, 31.03.03 AND 31.03.04. THESE AMOUNTS HAVE BEEN ENCLOSED ALONG WITH THE APPLICATION FOR REGISTRATION U/S 12A FILED BY THE ASSESSEE ON 13.07.2005. INCOME BY WAY OF INTEREST @ 10% ON THE ABOVE FUND OF RS. 38.79 CRORES, HEL D DURING A.Y. 2000 - 01, ALONE COMES TO 3.97 CRORES. FURTHER, A PERUSAL OF THE INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31.03.2002, 31.03.2003 AND 31.03.2004 SHOW EXPENDITURE, OTHER THAN BY WAY OF GRANTS, AS UNDER: PAGE 7 OF 15 FINANCIAL YEAR EXPENDITURE 2001 - 02 10.351AKHS 2002 - 03 12.311AKHS 2003 - 04 11.191AKHS THE EXPENDITURE FOR A.Y. 2000 - 01, ON THE BASIS OF INFORMATION AVAILABLE ON RECORD, AS ABOVE, IS ESTIMATED AT RS. 8 LAKHS. ACCORDINGLY INCOME FOR A.Y. IS ESTIMATED AT 3.79 CRORES. SINCE THE SOCIETY IS NOT REGISTERED U/S 12A OF THE INCOME TAX ACT FOR THE A.Y. 2000 - 01 THIS INCOME IS NOT EXEMPT U/S 11 AND 12. IN VIEW OF THE ABOVE FACTS, I HAVE REASON TO BELIEVE THAT INCOME OF RS.3.79 CRORES HAS ESCAPED ASSESSMENT IN ASSESSMENT YEAR 2000 - 01. 10 . FROM A PERUSAL OF THE AFORESAID SATISFACTION NOTE , WE FIND THAT THE AO HA D REFERRED TO THE APPLICATION FOR REGISTRATION U/S 12A DATED 13.07.2005 FILED BY THE ASSESSEE BEFORE DIT(E), DELHI, WHEREIN ALONG WITH THE SAID APPLICATION, THE ASSESSEE HAD DISCLOSE D THE FACT THAT AN AMOUNT OF RS.38.74 CRORES LYING AS FIXED DEPOSIT IN THE NAME OF THE ASSESSEE COMPANY. SINCE NO RETURN WAS FILED BY THE ASSESSEE FROM ASSESSMENT YEARS 2000 - 01 TO 2002 - 03, THE AO AFTER SATISFYING THAT INTEREST INCOME ON THE SAID FIXED DEPOSIT OF THE ASSESSEE HAS ESCAPED A SSESSMENT HAS INITIATED 147/148 PROCEEDINGS AGAINST THE ASSESSEE. THE LD CIT(A) WHILE DISMISSING THE SAID CLAIM OF THE ASSESSEE HAS HELD AS UNDER: - 5.3 IT IS EVIDENT FROM THE ABOVE THAT APPELLANT HAD RECEIVED FIXED DEPOSITS OF RS. 53.26 CRORES AND, FURTHER HAD NOT BEEN GRANTED REGISTRATION U/S 12A OF THE ACT FOR EACH OF THREE ASSESSMENT YEARS. IT HAS BEEN HELD BY VARIOUS JUDICIAL PRONOUNCEMENTS THAT, IT IS ONLY NECESSARY TO PRIMA - FACIE SHOW THAT INCO ME HAS ESCAPED ASSESSMENT BEFORE INITIATING ACTION 147/148 OF THE ACT. IN THE CASE OF RAYMOND WOLLEN MILLS LTD. VS. ITA 36 ITR (SC), IT WAS HELD BY THE APEX COURT THAT SOME PRIMA FACIE INFORMATION IS REQUIRED WHICH IS SUFFICIENT TO REOPEN THE ASSESSMENT PR OCEEDINGS. THIS VIEW HAS BEEN REITERATED IN THE CASE OF CIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. REPORTED IN 291 ITR 500. ALSO, DELHI HIGH COURT IN CIT VS. BATRA BHATTA CO. (2008) 174 TAXMAN 444, HAS OBSERVED THAT, IF THERE IS SOME MATERIAL ON THE BAS IS OF WHICH, THE AO HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, IT IS SUFFICIENT TO INVOKE THE PROVISIONS OF SECTION 1471/48. IT DOES NOT MATTER WHETHER THE BELIEF OF THE AO IS ULTIMATELY PROVED TO BE RIGHT OR WRONG. IN THE INSTANT CASE, IT I S UNDISPUTED THAT, APPELLANT HAD FDR'S AND, INTEREST INCOME ACCRUED ON SUCH FDR'S WHICH WAS NOT ELIGIBLE FOR EXEMPTION U/S 11 AND 12 OF THE ACT. UNDER THESE CIRCUMSTANCES, I AM FULLY CONVINCED THAT, THE ACTION TAKEN BY THE AO U/S 147/148 OF THE ACT IS FULL Y JUSTIFIED. ACCORDINGLY, THE ISSUE RAISED BY THE APPELLANT IS REJECTED. PAGE 8 OF 15 11 . WE DO NOT FIND ANY INFIRMITY IN THE AFORESAID REASONED ORDER OF THE LD CIT(A) AND THEREFORE THIS GROUND OF THE ASSESSEE IS REJECTED. 12 . THE NEXT GROUND IS THAT SINCE NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE AFTER THE ASSESSEE HAS FILED RETURN OF INCOME ON 19.12.2007 IN RESPONSE TO A NOTICE U/S 148 / 142(1) OF THE ACT AND PRIOR TO FRAMING THE IMPUGNED ORDER DATED 24.12.2007 , THE ASSESSMENT THUS FRAMED WAS WITHOUT JURISDICTION. 13 . THE LD AR CONTENDED THAT IT IS NOW SETTLED LAW THAT SERVICE OF NOTICE U/S 143(2) WITHIN THE STATUTORY TIME LIMIT IS MANDATORY AND ISSUANCE OF THE SAID NOTICE IS NECESSARY TO PROCEEDINGS EVEN U/S 147/148 AS HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF ALPINE ELECTRONICS ASIA PTE LTD. VS. DGIT & OTHERS, 341 ITR 247 . THE LD COUNSEL ALSO RELIED ON THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON, (2010) 321 ITR 362 (SC) AND CONTENDED THAT SI NCE THE ASSESSING AUTHORITY DID NOT ISSUE NOTICE U/S 143(2) BEFORE FRAMING ASSESSMENT ORDER, THE SAID DEFECT CANNOT BE SAID TO BE A PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE DEFECT; AND THEREFORE FRAMING THE ASSESSMENT ORDER WITHOUT THE ISSUANCE OF NOTICE U/S 143(2) WAS WITHOUT JURISDICTION AND THEREFORE THE ORDER SHOULD BE QUASHED. ON THE OTHER HAND THE LD DR CONTENDED THAT NOTICE U/S 148 OF THE ACT WAS ISSUED ON 29.03.2007 AND THE SAME WAS DULY RECEIVED BY THE ASSESSEE ON 30.03.200 7 . A CCO RDINGLY, THE ASSESSEE WAS REQUIRED TO FILE ITS RETURN FOR THE ASSESSMENT YEAR 2000 - 01 WITHIN 30 DAYS I.E. WITHIN 28.04.2007. HOWEVER THE ASSESSEE DID NOT FURNISH THE REQUISITE RETURN WITHIN THE STI PULATED TIME; I.E. BY 28.04.2007. DUE TO NON - COMPLIANCE ON THE PART OF THE ASSESSEE IN THIS REGARD, THERE WAS NO ALTERNATIVE FOR THE AO, OTHER THAN TO ISSUE NOTICE U/S 142(1) OF THE ACT ON 12.09.2007. ACCORDING TO THE LD DR, THIS WAS THE ONLY RECOURSE AVAILABLE AS PER LAW TO PUT THE ASSESSMENT PROCESS IN MOTION, PARTICULARLY WHEN NO RETURN WAS FURNISHED BY THE ASSESSEE WITHIN 30 DAYS FROM THE DATE OF SERVICE OF NOTICE U/S 148 OF THE ACT . LD DR SUBMITTED THAT THE RECORDS SHOW THAT RETURN FOR AY 2000 - 01 WAS IN - FACT FILED ON 19.12.2007, AS A G AINST THE STATUTORY TIME LIMIT AVA ILABLE U P TO 28.04.2007. THUS, THE RETURN SO FURNISHED ON 0 9.12.2007 WAS INVALID RETURN IN THE EYES OF LAW AS IT W AS NOT IN ACCORDANCE WITH THE TIME ALLOWED TO PAGE 9 OF 15 THE ASSESSEE TO FURNISH THE RETURN IN RESPONSE TO NOTICE U/S 148 ISSUED ON 29.03.2007. LD DR EMPHASISED THAT THE PROVISIONS CONTAINED IN SECTION 148 CLEARLY MENTION ABOUT FURNISHING OF RETURN WITHIN THE PERIOD SPECIFIED IN THE NOTICE. THIS IS MANDATORY REQUIREMENT AND THERE IS NO PROVISION TO RELAX THE TIME THUS GIVEN IN THE 148 NOTICE . IN OTHER WORDS, ACCORDING TO THE LD DR, THE SPECIFIED DATE FOR FURNISHING THE RETURN AS PER NOTICE U/S 148 CANNOT BE EXTENDED UNDER ANY CIRCUMSTANCES. LD DR CONTENDED THAT ASSESSMENT IN THE INSTANT CASE WAS RIGHTLY MADE BY THE AO U/ S 144 OF THE ACT ON 2 4 . 12.2007 AS NO NOTICE U / S 143(2) WAS REQUIRED TO BE ISSUED ON THE BASIS OF INVALID RETURN FURNISHED BY THE ASSESSEE ON 19.12.2007. IN THE SAID CIRCUMSTANCES, THE LD DR DOES NOT WANT US TO INTERFERE WITH THE ORDER OF THE LD CIT(A). 14 . WE HAVE HEARD BOTH T HE PARTIES AND PERUSED THE RECORDS AND HAS GONE THROUGH THE CASE LAWS CITED BY THE PARTIES BEFORE US. SECTION 148 STIPULATES THAT ANY RETURN FILED IN RESPONSE TO THE SAID NOTICE, THE PROVISIONS OF ACT SHALL APPLY AS IF SUCH RETURN WAS FILED AS REQUIRED U/S 139 OF THE ACT . THE FIRST PROVISO AND SECOND PROVISO TO SECTION 148 CURES THE DEFECT IN NOT ISSUING 143(2) NOTICE WITHIN SPECIFIED PERIOD I.E. FROM 01.10.1991 TO 30.09. 2005. SO THE LEGISLATIVE INTENT IS CLEAR THAT DURING SECTION 148 PROCEEDING THE NOTICE U/S 143(2) SHALL BE ISSUED BEFORE THE COMPLETION OF ASSESSMENT PROCEEDING EVEN THOUGH IT IS ISSUED BEYOND THE PRESCRIBED TIME LIMIT PRESCRIBED U/S 143(2) OF THE ACT . THE EXPLANATION TO SECTION 148(1) CLARIFIES THAT ISSUANCE OF NOTICE U/S 14 3 (2) IS MANDATOR Y IN RESPECT OF RETURNS FILED ON OR AFTER 1 ST OCTOBER 2005 SINCE IT IS CLARIFIED THE FIRST AND SECOND PROVISO TO SECTION 148(1) HAS NO APPLICATION ON AFTER 1 ST OCTOBER 2005 ONWARDS . A READING OF SECTION 143, CONTEMPLATES TWO CIRCUMSTANCES I.E. WHEN RETURN IS FILED U/S 139 AND RE TURN FILED IN RESPONSE TO NOTICE U/S 142(1) , THE SAID RETURN SHOULD BE PROCESSED IN THE MANNER PRESCRIBED U/S 143 OF THE ACT . 15 . NOW WE HAVE TO EXAMINE UNDER WHICH CIRCUMSTANCES AS STATED ABOVE, THE ASSESSEE CASE COMES UNDER , SI NCE THE ASSESSEE HAS FILED A BELATED RETURN ON 19.12.2007 . THE LD CIT(A) HAS RECORDED THAT NOTICE U/S 148 WAS ISSUED ON 29.03.2007 AND NOTICES U/S 142(1)WAS ISSUED ON 12.09.2007, 15.11.2007 AND PAGE 10 OF 15 30.11.2007 ; AND SECTION 142(1) NOTICE REQUIRE THE ASSESSEE TO FURNISH RETURN ON A DATE TO BE THEREIN SPECIFIED , IN OTHER WORDS, THE ONLY REQUIREMENT OF THE SECTION IS THAT AO HAS TO SPECIFY THE DATE WHEN THE RETURN IN PURSUANT TO SECTION 142(1) NEED TO BE FILED. HERE IT IS NOT THE CASE OF REVENUE THAT THE RETURN FILE D BY THE ASSESSEE DATED 19.12.2007 WAS NOT WITHIN THE DATE SPECIFIED IN ANY OF THE THREE NOTICE S ISSUED BY IT UNDER SECTION 142(1) OF THE ACT. THE CONSISTENT CONTENTION OF THE AO IS THAT SINCE ASSESSEE DID NOT FILE THE RETURN WITHIN 30 DAYS OF ISSUANCE OF 148 NOTICE, THE RETURN FILED IS INVALID ; AND SO THEREAFTER HE ISSUED 3 NOTICES U/S 142(1) AND PROCEEDED TO ASSESS THE ASSESSEE U/S 144 OF THE ACT, WHICH APPROACH CANNOT COUNTENANCED, BECAUSE AFTER ISSUANCE OF NOTICE U/S 142(1) IN ACCORDANCE TO LAW, THE PRO VISIONS OF SECTION 143 (2) NAMELY ISSUANCE OF NOTICE FOR SCRUTINY PROCEEDINGS GETS TRIGGERED , SO THAT ASSESSEE IS GIVEN AN OPPORTUNITY TO PRODUCE BOOKS OF ACCOUNTS, OTHER DOCUMENTS BEFORE THE AO AND ASSESSMENT CAN BE COMPLETED U/S 143(3) OF THE ACT. 16 . FROM THE ABOVE, IT COULD BE SEEN THE LEGISLATURE IN ITS WISDOM HAD CONTEMPLATED FILING OF RETURN, IN RESPONSE TO 142(1) NOTICE IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNE R ON A SPECIFIED DATE. SO ON A CONJOINT READING OF SECTION 143(2) VIS - A - VIS 142(1), AND CASE LAWS RELIED BY THE ASSESSEE ON THIS ISSUE I.E. 321 ITR 362(SC), HOTEL BLUE MOON, 341 ITR 247 (DEL) ALPINE ELECTRONICS, ITA NO.3523/DEL/2013 FOR ASSESSMENT YEAR 1999 - 2000 MOHINDER KUMAR CHABBRA , IT COULD BE CONCLUDED THAT ISSUANCE OF NOTICE U/S 143(2) BECOMES MANDATORY, ONCE THE RETURN IS FILED BY THE ASSESSEE WITHIN THE SPECIFIED DATE . IN THE INSTANT CASE, THE AO HAS NOT ISSUED 143(2) NOTICE AFTER ASSESSEE HAD FILED RETURN ON 19.12.2007 PURSUANT TO NOTICES U/S 142(1) OF THE ACT WHICH IS NOT IN ACCORDANCE TO LAW . 17. THE OTHER ARGUMENT OF THE LD DR, THAT SINCE THE ASSESSEE DID NOT FILE THE RETURN ON OR BEFORE 28.04.2007, THE RETURN WAS INVALID AND THEREFORE AO RESORTED TO ESTIMATE INCOME OF THE ASSESSEE U/S 144 OF THE ACT ALSO DOES NO T INSPIRE US TO TAKE A VIEW THAT THE IMPUGNED ASSESSMENT WAS VALID BECAUSE AS PER SECTION 144, BEST JUDGEMENT ASSESSMENT CAN BE RESORTED TO ONLY IF THE ASSESSEE FAILS TO MAKE THE RETURN REQUIRED UNDER SUB - SECTION (1) OF SECTION 139 AND HAS NOT PAGE 11 OF 15 MADE A RETURN OR A REVISED RETURN UNDER SUB - SECTION (4) OR SUB - SECTION (5) OF THAT SECTION, OR FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE IS SUED UNDER SUB - SECTION (1) OF SECTION 142 OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER SUB - SECTION (2A) OF THAT SECTION, OR HAVING MADE A RETURN, FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISSUED UNDER SUB - SECTION (2) OF SECTION 143 AND IF SUCH FAILURE IS THERE THE N , THE ASSESSING OFFICER, AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH THE ASSESSING OFFICER HAS GATHERED, SHALL, AFT ER GIVING THE ASSESSEE AN OPPOR TUNITY OF BEING HEARD, MAKE THE ASSESSMENT OF THE TOTAL INCOME OR LOSS TO THE BEST OF HIS JUDGME NT AND DETERMINE THE SUM PAYABLE BY THE ASSESSEE O N THE BASIS OF SUCH ASSESSMENT. 18. SO ADMITTEDLY SINCE THE ASSESSEE HAS FILED RETURN PURSUANT TO SECTION 142(1) NOTICE ON 19.12.2007, THERE IS NO FAILURE TO FILE RETURN AS CONTEMPLATED U/S 144(1)(B) OF THE ACT, FOR THE AO TO RESORT TO BEST JUDGEMENT ASSESSMENT , SO THE SAID CONTENTION OF THE REVENUE ALSO FAILS . IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES, WE FIND THAT AO FAILED TO ISSUE MANDATORY NO TICE U/S 143)2), AFTER THE ASSESSEE HAS FILED RETURN ON 19.12.2007 PURSUANT TO NOTICE ISSUED U/S 142(1) OF THE ACT, THEREFORE, THE IMPUGNED ASSESSMENT CANNOT BE UPHELD SINCE THE NON - ISSUANCE OF MANDATORY NOTICE U/S 143(2) CANNOT BE CURED AS HELD BY THE APE X COURT AND SO WE HAVE NO ALTERNATIVE BUT TO QUASH IT. SO ALL THE THREE APPEALS OF THE ASSESSEE IS ALLOWED. 19 . NOW WE TAKE UP THE REST OF THE 3 APPEALS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) FOR ASSESSMENT YEAR 2003 - 04 IS 2005 - 06. 2 0 . THE GROUND S OF APPEAL BEING SIMILAR IN ALL THE THREE APPEAL, WE TAKE UP THE GROUNDS RAISED IN ASSESSMENT YEAR 2003 - 04 WHICH IS AS FOLLOWS: - 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT PARTICU LARLY WHEN REASONS U/S 147 OF THE ACT WERE DULY RECORDED BY THE ASSESSING OFFICER ON 28/03/2008 BEFORE ISSUE OF NOTICE U/S 148 OF THE ACT. THE FACTS ARE CLEARLY VERIFIABLE FORM THE RECORDS WHICH THE LD. CIT(A) HAS FAILED TO TAKE INTO CONSIDERATION BEFORE D ECIDING THE MATTER. 2. ALTERNATIVELY, ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, WHETHER IT WOULD BE JUDICIOUS IF THE MATTER IS RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR TAKING A FRESH DECISION AFTER PROPER EXAMINATION OF THE PAGE 12 OF 15 ASSESSMENT RECORDS VIS - A - VIS THE ISSUE OF VALIDITY OF PROCEEDINGS INITIATED U/S 147 OF THE ACT BY PROPERLY RECORDING THE REASONS REGARDING ESCAPEMENT OF INCOME BY THE ASSESSING OFFICER BEFORE THE ISSUE OF NOTICE U/S 148 OF THE ACT BY HIM. 3. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 21 . THE SOLE GROUND OF THE REVENUE IS THAT THE LD CIT(A) ERRED IN QUASHING THE REOPENING OF ASS ESSMENT BY HOLDING THAT SATISFACTION AS REQUIRED U/S 147 OF THE ACT HAS NOT BEEN RECORDED BY THE AO BEFORE ISSUANCE OF NOTICE U/S 148 , WHEN THE RECORDS SUGGEST OTHERWISE. 22 . THE LD DR SUBMITTED THAT SECTION 12A REGISTRATION WAS GRANTED TO THE ASSESSEE W .E.F. 01 . 04 . 2005. SO, PRIOR TO 01.04.2005, THE ASSESSEE WAS NOT ENTITLED TO BENEFIT OF EXEMPTION OF INCOME ALLOWABL E U/S 11 & 12 OF THE ACT . CONSIDERING THIS POSITION , THE AO DULY RECORDED THE REASONS ON 28.03.2008 TO FORM A BELIEF REGARDING ESCAPEMENT OF I NTEREST INCOME FROM ITS FIXED DEPOSIT FOR ASSESSMENT IN A Y 20 03 - 04 TO 2005 - 06 . ACCORDING TO THE LD DR, IT WAS ONLY AFTER FOLLOWING STATUTORY PRE - CON DITION OF RECORDING PROPER REASONS U/S 147 THAT NOTICE U/S 148 OF THE ACT WAS ISSUED FOR THE RESPECTIVE THREE ASSESSMENT YEARS IN THIS CASE. LD DR ALSO SUBMITTED THAT THE ASSESSMENT FRAMED U/S 143(3) ON 24.12.2008 FOR THE ASSESSMENT YEAR 2003 - 04 TO 2005 - 06 DO NOT SUFFER FROM ANY INFIRMITY AS THE PROCEEDINGS U/S 147/148 WERE VALIDITY INITIATED AS PER THE RELE VANT PROVISIONS CONTAINED UNDER THE ACT AND THE LD CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE IN SPITE OF EARNING INTEREST INCOME FROM FIXED DEPOSIT WAS NOT FILING ANY RETURN FOR THE RELEVANT ASSESSMENT YEARS AND FOR ASSESSMENT YEAR 2000 - 0 1 TO 2002 - 03 WAS COMPLETED ON 24 TH DECEMBER 2007. 23 . ON THE OTHER HAND LD AR SUBMITTED THAT NO REASONS HAVE BEEN RECORDED PRIOR TO INITIATION OF PROCEEDINGS U/ S 147 OF THE ACT. IT WAS SUBMITTED THAT, PERUSAL OF THE PURPORTED REASONS RECORDED WOULD SHOW T HAT, NO SATISFACTION HAS BEEN RECORDED - THAT INCOME OF THE APPELLANT HAS ESCAPED ASSESSMENT. IT WAS THUS SUBMITTED THAT, IN ABSENCE OF ANY SUCH SATISFACTION THE INITIATION OF PROCEEDINGS IS WITHOUT JURISDICTION AND THEREFORE VOID AB - INITIO . PAGE 13 OF 15 24 . WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE RECORDS. THE ISSUE BEFORE US IS NO LONGER RES - INTEGRA, THAT BEFORE ISSUING A NOTICE U/S 148, THE AO MUST HAVE REASONS TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASS ESSMENT FOR ANY ASSESSMENT YEAR WHICH HE INTENDS TO REOPEN/REASSESS. UNLESS THE AO RECORDS THE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THAT YEAR, THE AO HAS NO JURISDICTION TO ISSUE NOTICE U/S 148 OF THE ACT. BEFORE ISSUANCE OF NOTICE U/S 148 OF T HE ACT, IT IS A CONDITION PRECEDENT TO RECORDS HIS SATISFACTION AS TO WHAT MAKES HIM BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. SECTION 148(2) MANDATES THE AO TO RECORD HIS REASON BEFORE ISSUANCE OF NOTICE U/S 148. SINCE THE STATUTE MANDATES THE AO TO DO SUCH A EXERCISE BEFORE ISSUANCE OF NOTICE U/S 148, THEN ONLY THE AO ACQUIRE JURISDICTION TO REASSESS THE ASSESSEE. IN THE LIGHT OF THE SAID WELL SETTLED LAW, WHEN THERE IS A CHALLENGE TO ASSUMPTION OF JURISDICTION TO ISSUE NOTICE U/S 148, WE HAVE TO EXAMINE THE REASONS RECORDED BY THE AO ON 28.03.2008 BEFORE ISSUING NOTICE U/S 148 IN THIS CASE FOR ASSESSMENT YEAR 2003 - 04 TO 2005 - 06, SO IT IS REPRODUCED BELOW: - 5.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT, PERUSED THE M ATERIAL ON RECORD. THE REASONS RECORDED FOR THREE ASSESSMENT YEAR S FOR INITIATING ACTION U/S 147 OF THE ACT ARE AS UNDER: 'THE DELHI KALYAN SAMITI WAS INCORPORATED ON 31.3.1995 AS A REGISTERED SOCIETY. NO RETURN OF INCOME HAS BEEN FILED FOR THE ASSESSMENT YEAR 200 3 - 04, 2004 - 05 AND 2005 - 06 . VIDE LETTER NO. 32820 DATED 23.03.2007 OR DIT(E) DELHI IT WAS INFORMED THAT THE SAMITI HAD APPLIED FOR REGISTRATION U/S 12A ON 13.07.2005 AND HAS BEEN GRANTED REGISTRATION W.E.F. 01.04.2005. ALONG WITH THE APPLICATION FOR REGISTRATION U/S 12A DATED 13.07.2005, FILED BY THE ASSESSEE BEFORE THE DIT(E), DELHI A COPY OF THE INSTRUMENT UNDER WHICH THE SAMITI WAS ESTABLISHED, NAMELY, A COPY OF CABINET DECISION 125 DATED 16.3.1995 HAS BEEN ENCLOSED. AS PER THIS DECISION AN AMO UNT OF RS. 38.74 CRORES OUT OF THE ERSTWHILE LOTTERY FUND WHICH WAS LYING AS FIXED DEPOSIT WAS TO BE TRANSFERRED TO THE WELFARE FUND OF THE ASSESSEE SOCIETY. THE ASSESSEE HAS CONTINUED TO HOLD THE AMOUNT TRANSFERRED FROM DELHI LOTTERY IN ALL SUBSEQUENT YEA RS AS EVIDENT FROM THE COPIES OF ACCOUNT FOR THE YEAR ENDED 31.03.2002 TO 31.03.2004 WHEREIN A LIABILITY OF RS. 53.26 CRORES ON ACCOUNT OF 'DEPOSIT TRANSFERRED FROM DELHI LOTTERIES 'APPEARS IN THE BALANCE SHEET FOR THE YEAR ENDED 31.03. 20 02, PAGE 14 OF 15 31.03. 20 03 AND 31.03. 20 04. THESE ACCOUNTS HAVE BEEN ENCLOSED ALONG WITH THE APPLICATION FOR REGISTRATIO N U/S 12A FILED BY THE ASSESSEE. IN VIEW OF ABOVE ACCOUNTS THE INCOME ACCRUED ON ACCOUNTS OF INTEREST ESTIMATES AS UNDER FINANCIAL YEAR EXPENDITURE 2002 - 03 2,64,30,606 2003 - 04 1,84,37,256 2004 - 05 2,64,30,000 INTEREST ACCRUED HAS BEEN ESTIMATED AT THE RATE OF 10% ON TOTAL INVESTMENT OF RS.83,00,00,000 AND EXPENDITURE KEEPING IN VIEW THE PREVIOUS YEARS EXPENDITURE. IN VIEW OF THE ABOVE FACTS YOU ARE REQUESTED TO PRODUCE YOUR BOOKS OF ACCOUNTS RELEVANT FOR AY 2003 - 04, 2004 - 05 AND 2005 - 06 BY THE DATE GIVEN IN THE NOTICE REVERSE. PLEASE ALSO PRODUCE DOCUMENTS IF YOU HAD FILED RETURN OF INCOME FOR THE FOR THE ABOVE SAID PERIOD. 25 . A PERUSAL OF THE ABOVE SATISFACTION NOTE REPRODUCED BY THE LD CIT(A) AT PAGE 5 OF THE IMPUGNED ORDER DOES NOT RECORDS SATISFACTION OF THE AO, THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. HOWEVER, WE FAIL TO COMPREHEND AS TO WHY THE AO HAS NOT SPECIFICALLY RECORDED SATISFACTION ABOUT ESCAPEMENT OF INCOME IN HIS REASONS RECORDED ON 28.03.2008, WHEN ON SIMILAR FACTS HE HAD RECORDED REASONS BEFORE ISSUANCE OF NOTICE U/S 148 ON 29.03.2007 FOR ASSESSMENT YEAR 2000 - 01 TO 2003 - 04 WHI CH WAS DECIDED BY US TO BE VALID AND REPRODUCED IN PARA 10 AND 11 (SUPRA). THE SAID REASONS (29.03.2007) WHEREIN THE SATISFACTION OF ESCAPEMENT OF INCOME WAS RECORDED FINALLY ENDED UP WITH AN ASSESSMENT ON 24.12.2007 MAKING ADDITIONS OF MORE THAN 3 CRORES FOR ASSESSMENT YEAR 2000 - 01 TO 2002 - 03 . SO FOR THE RELEVANT ASSESSMENT YEARS I.E. 2003 - 04 TO 2005 - 06, WHEN THE IMPUGNED NOTICE WAS RECORDED ON 28.03.2008, THE ESCAPED INCOME OF THE ASSESSEE WAS ALREADY ASSESSED AGAINST IT. AND WE TAKE NOTE THAT OF THE REV ENUES PAPER BOOK DATED ON 11.07.2013 ANNEXURE PAGE 11 CLEARLY BRINGS OUT THAT AO HAS RECORDED SATISFACTION ON 28.03.2005 THE RELEVANT PORTION READS AS UNDER: - IN VIEW OF THE ABOVE, FACTS, I HAVE REASON TO BELIEVE THAT THE INCOME OF RS.4,06,28,917/ - . FOR THE ASSESSMENT YEAR 2003 - 04, RS.2,70,44,782/ - . FOR THE ASSESSMENT YEAR 2004 - 05 AND RS.5,65,70,000/ - . FOR THE ASSESSMENT YEAR 2005 - 06 HAS ESCAPED ASSESSMENT. NOTICE U/S 148 ARE THEREFORE, HAVE BEEN ISSUED. PAGE 15 OF 15 26. IN THE LIGHT OF THE AFORESAID FACT WHICH THE CIT(A) MIGHT NOT HAVE TAKEN NOTE WHILE PASSING THE IMPUGNED ORDER , WE FIND MERIT IN THE REVENUES CONTENTION THAT THIS ISSUE MAY BE REMANDED BACK TO THE LD CIT(A) FOR FRESH ADJUDICATION . 27. THEREFORE, IN THE LIGHT OF THE NOTE - SHEET DATED 28.03.2008 IN WHI CH SATISFACTION AS AFORE - STATED IS RECORDED, WE DEEM IT FIT TO SET - ASIDE THE IMPUGNED ORDER OF THE LD CIT(A) AND REMAND IT BACK TO THE LD C(T)A TO RE - ADJUDICATE THE ISSUE AND OTHER GROUNDS REMANDED BACK TO HIM AFRESH AFTER CALLING FOR THE RECORDS FROM AO A ND NEEDLESS TO SAY THAT THE ASSESSEE BE GIVEN SUFFICIENT OPPORTUNITY BEFORE ADJUDICATING THE APPEAL. 28 . IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 0 4 . 03 .2015 . - S D / - - S D / - ( S.V.MEHTORA ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 4 . 03 .2015 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI