ITO-III, Jagaron V. Smt. Babaljit Kaur, Ludhiana

ITA 171/CHANDI/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90192 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 25-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Salary income; Opportunity of being heard; Period of limitation; Assessment record
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 171/CHD/2013 (ASSESSMENT YEAR: 2008-09) THE INCOME TAX OFFICER-III, VS. SMT.BABALJIT KAUR , MOGA, HQ. JAGRAON. W/O SHRI HARPAL SINGH, 352/45-A, GURDIP NAGAR, 6-RIGHT SAHEED KARNAIL SINGH GATE, JAGRAON, LUDHIANA. PAN NO. AHTPK4643 H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K.MITTAL, DR RESPONDENT BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 25.06.2015 DATE OF PRONOUNCEMENT : 26.06.2015 O R D E R PER H.L.KARWA, VP : THIS APPEAL FILED BY THE REVENUE IS DIRE CTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, LUDHIANA DATED 28.12.2012 RELATING TO ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOWI NG 2 GROUNDS : 1. WHETHER ON THE FACT & IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) IS JUSTIFIED IN ANNULLING THE ASSESSMENT M ADE BY THE AO U/S 143 (3) BY IGNORING THAT NOTICES WERE IS SUED AND SENT TO THE ASSESSEE WELL WITHIN THE PRESCRIBED TIME LIMIT. 2. WHETHER ON THE FACT & IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) IS RIGHT IN RENDERING SERVICE OF THE NOT ICE THROUGH AFFIXTURE IRREGULAR BY IGNORING THE FACT THAT THE A O WAS LEFT WITH NO PRACTICAL OPTION OF SERVICE THE NOTICE EXCEPT TH ROUGH FIXATION AS THE WHOLE FAMILY OF THE ASSESSEE WENT ABROAD WIT HOUT GIVING THERE WHEREABOUTS . 3. WHETHER ON THE FACT & IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) IS RIGHT IN DELETING THE ADDITION OF RS.1 1,64,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH DEPOS ITS BY IGNORING THE FACT THAT CASH WITHDRAWAL ON DIFFERENT DATES WHERE DEPOSITED IN BANK ON SUBSEQUENT DATES IS NOT VERIFIA BLE. 3. AS REGARDS GROUND NO.1 AND 2 OF THE APPEAL, THE RELEVANT FACTS ARE THAT THE ASSESSEE IS AN INDIVIDU AL. SHE DERIVES INCOME FROM SALARY AS A TEACHER EMPLOYED WI TH THE GOVERNMENT SENIOR SECONDARY SCHOOL, GALIB KALAN (CO MPLEX), GOVERNMENT GIRLS SCHOOL, GALIB RAN SINGH (LUDHIANA) . FOR THE ASSESSMENT YEAR 2008-09, SHE FILED HER RETURN O F INCOME ON 24.6.2008 DECLARING TOTAL INCOME AT RS.1,38,064/ -. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE I NCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 5.3.2010. THE C ASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AS PER NORMS. ACCORDINGLY, THE ASSESSMENT PROCEEDINGS WERE TAKEN UP BY ISSUING STATUTORY NOTICES UNDER SECTION 143(2) OF THE ACT DATED 7.9.2009, WHICH WAS SENT THROUGH REGISTERED P OST ON 9.9.2009 FOR 18.9.2009. THE ASSESSING OFFICER HAS NOTED THAT 3 THE SAID NOTICE WAS RECEIVED BACK WITH THE REMARKS OF THE POSTAL AUTHORITIES LEFT INDIA RETURN TO THE SENDER . THEREAFTER, THE ASSESSING OFFICER ISSUED A DETAILED QUESTIONNAIRE DATED 12.7.2010 TO THE ASSESSEE ALONG WITH NOTICE UNDER SECTIONS 142(1) AND 143(2) OF THE ACT FIXING THE CASE ON 26.8.2010. ON THE SAID DATE, NOBODY APPEA RED ON BEHALF OF THE ASSESSEE. THE ASSESSING OFFICER FUR THER OBSERVED THAT AS PER THE AIR (ANNUAL INFORMATION RE TURN) THE ASSESSEE HAS MADE CASH DEPOSITS OF RS.11,64,000/- I N AXIS BANK, JAGRAON BEARING ACCOUNT NO.31073. THE ASSES SING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THESE CASH DEPOSITS BY ALLOWING HER FINAL OPPORTUNITY VIDE LETTER DATE D 30.11.2010 ALONGWITH NOTICE UNDER SECTION 142(1) OF THE ACT FO R 6.12.2010. ACCORDING TO THE ASSESSING OFFICER, TH E SAID LETTER WAS SERVED THROUGH AFFIXTURE UNDER RULE 20 ORDER V OF CIVIL PROCEDURE CODE, 1908 ON 2.12.2010 THROUGH SHRI RATT AN SINGH, INSPECTOR OF THE DEPARTMENT. THE ASSESSING OFFICER FURTHER OBSERVED THAT LOCAL ENQUIRIES MADE, REVEALE D THAT THE ASSESSEE SMT.BABALJIT KAUR HAD LEFT INDIA AND PRESE NTLY RESIDING IN CANADA WITH HER FAMILY. SINCE THIS WA S A TIME BARRING ASSESSMENT, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT EX-PARTE TO THE BEST OF HIS JUDGMENT UND ER SECTION 144 OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED CIT (AP PEALS) ON 31.11.2011 AND THE LEARNED CIT (APPEALS) AFTER COND ONING THE 4 DELAY IN FILING THE APPEAL ANNULLED THE ASSESSMENT ORDER OBSERVING AS UNDER : 3.3 I HAVE CAREFULLY CONSIDERED THE APPELLANT'S SU BMISSIONS. I HAVE ALSO PERUSED THE ASSESSMENT FOLDER. AS PER THE ASSESSMENT RECORDS THE FIRST NOTICE U/S 143(2) WAS ISSUED ON 07.09.2009. THIS NOTICE WAS SENT BY REGISTERED POST. THE NOTICE WAS R ECEIVED BACK WITH THE COMMENTS 'RECEIVER GONE ON SOMEWHERE WITHOUT GIVEN ADDRESS.' THEREAFTER ANOTHER NOTICE DATED 23.09.2009 WAS SENT PROBABLY THROUGH ORDINARY POST. THERE IS NO EVIDE NCE TO SHOW WHETHER THIS NOTICE WAS SERVED ON THE APPELLANT. AS THE NOTICE WAS PROBABLY SENT THROUGH THE ORDINARY POST, THE S AME WAS NOT RECEIVED BACK. APPARENTLY, WHEN THE 1 ST NOTICE WAS RECEIVED BACK IT WAS IN KNOWLEDGE OF AO THAT THE APPELLANT HAD GONE SOMEWHER E AND WAS NOT AVAILABLE AT THE ADDRESS. NO EFFECT WAS MADE BY THE AO TO SERVE THE NOTICE THROUGH AFFIXTURE. THERE IS NOTHIN G ON RECORD TO SHOW THAT THERE WAS A VALID SERVICE OF NOTICE WITHI N THE PERIOD OF LIMITATION PRESCRIBED UNDER I.T. ACT. VALID SERVICE OF NOTICE WITHIN THE PERIOD OF LIMITATION IS AN ESSENTIAL REQUIREMENT FOR ASSESSMENT PROCEEDINGS. IN THE INSTANT CASE AS DISCUSSED ABOVE TH ERE WAS NO SERVICE OF NOTICE U/S 143(2) WITHIN PERIOD OF LIMITATION. 5. I HAVE HEARD SHRI S.K.MITTAL, LEARNED D.R FOR T HE REVENUE AND SHRI TEJ MOHAN SINGH, LEARNED COUNSEL F OR ASSESSEE AT LENGTH AND HAVE ALSO PERUSED THE MATERI ALS AVAILABLE ON RECORD. IT IS OBSERVED THAT NOTICE U NDER SECTION 143(2) OF THE ACT DATED 7.9.2009 FOR ATTENDANCE ON 18.9.2009 WAS NEVER SERVED UPON THE ASSESSEE AND SO ALSO THE SUBSEQUENT NOTICES WERE RETURNED WITH THE POSTAL RE MARKS LEFT INDIA RETURN TO THE SENDER. THE FACT OF TH E ASSESSEE HAVING LEFT INDIA WAS, THUS, IN THE KNOWLEDGE OF TH E ASSESSING 5 OFFICER. FOR THE REASONS BEST KNOWN TO THE ASSESS ING OFFICER, THE PROVISIONS OF RULE 25 OF ORDER V OF THE CIVIL P ROCEDURE CODE, 1908, WERE NEVER FOLLOWED BY HIM. THE NOTIC E ISSUED UNDER SECTION 143(2) OF THE ACT WAS NEVER SERVED UP ON THE ASSESSEE AND THUS, THE ASSESSMENT FRAMED WOULD BE N ULLITY AND VOID AB INITIO. RECENTLY, THE I.T.A.T. MUMBA I BENCH IN THE CASE OF ABACUS DISTRIBUTION SYSTEMS (INDIA) PV T. LTD. VS. DCIT (2014) 159 TTJ 156 (MUM.) HELD THAT ISSUANCE AND SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT W ITHIN TIME PERIOD PRESCRIBED IN SECOND PROVISO TO SECTION 143( 2) OF THE ACT IS MANDATORY AND NOT MERELY PROCEDURAL FORMALITY AN D, THEREFORE, IF SUCH REQUIREMENT OF SERVICE OF NOTICE IS NOT FULFILLED THEN CONSEQUENT ASSESSMENT ORDER PASSED B Y THE ASSESSING OFFICER WOULD BE NULL AND VOID . CONSIDERING THE ENTIRE FACTS OF THE PRESENT CASE, I AM OF THE OPINI ON THAT THE LEARNED CIT (APPEALS) WAS FULLY JUSTIFIED IN HOLDIN G THAT IN THIS CASE, THERE WAS NO SERVICE OF NOTICE UNDER SEC TION 143(2) OF THE ACT WITHIN THE PERIOD OF LIMITATION, WHICH I S MANDATORY UNDER THE LAW. THEREFORE, I DECLINE TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT (APPEALS) ON THIS ISSUE AND ACCORDINGLY, I UPHOLD THE SAME AND DISMISS GROUND N OS.2 AND 3 OF THE APPEAL. 6. AS REGARDS GROUND NO.3 OF APPEAL, THE LEARNED C IT (APPEALS) HELD AS UNDER : 6 4.5 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS . AS PER THE AO'S REPORT, AMOUNT OF RS. 6 LACS WAS WITHDRAWN FROM THE BANK ACCOUNT ON 10.11.2007. THIS EXPLAINS THE DEPOSITS OF RS.6 LACS IN THE BANK ACCOUNT ON 14.11.2007. OUT OF THE REMAINING CASH WITHDRAWALS, THE AO HAS CONFIRMED TOTAL WITHDRAWALS OF RS. 3,33,986/-. THE APPELLANT HAS SUBMITTED THAT IN ADD ITION TO THE WITHDRAWALS CONFIRMED BY THE APPELLANT, THE FOLLOWI NG AMOUNTS WERE ALSO WITHDRAWN FROM THE BANKS. 1. WITHDRAWAL OF RS. 1 LAC ON 07.11.2007 FROM BANK ACCO UNT IN PNB. 2. WITHDRAWAL OF RS.1,18,000/- ON 08.11.2007 FROM BANK ACCOUNT IN SBI. 3. WITHDRAWAL OF RS. 50,000/- ON 24.10.2007. THE EVIDENCES PERTAINING TO THESE WITHDRAWALS WERE A LSO SUBMITTED. IF THESE WITHDRAWALS ARE ADDED UP TO THE WITHDRAWAL OF RS. 3,33,986/- WHICH AS PER AOS REPORT IS ALREADY EX PLAINED, THE TOTAL AMOUNT WITHDRAWN WORKS TO RS.6,01,986/-. THUS THE APPELLANT HAD SUFFICIENT CASH WITHDRAWALS TO EXPLAIN THE CASH DEPOSITS TOTALING RS.5,64,000/-. ALL THE CASH DEPOSITS IN BANK ACCOUNTS STAND FULLY EXPLAINED. THE ADDITION MADE BY THE AO IS ACCORDINGLY DELETED. THIS GROUND OF APPEAL IS ACCOR DINGLY ALLOWED. 7. IT IS OBSERVED THAT WHILE FRAMING THE EX-PARTE ORDER, THE ASSESSING OFFICER MADE AN ADDITION OF RS.11,6 4,000/- ON ACCOUNT OF CASH DEPOSITS. THE ASSESSING OFFICER H AS MADE THIS ADDITION WITHOUT AFFORDING ANY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN MY CONSIDERED OPINION, THE L EARNED CIT (APPEALS) HAS CORRECTLY APPRECIATED THE FACTS AND A LSO THE EXPLANATION PUT-FORTH BY THE ASSESSEE REGARDING THE DEPOSITS AND WITHDRAWALS MADE IN THE BANK ACCOUNT. THERE I S NO MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF TH E LEARNED CIT (APPEALS) ON THIS ISSUE. SHRI S.K.MITTAL, LEAR NED D.R FOR THE REVENUE ALSO COULD NOT CONTROVERT THE FINDINGS GIVEN BY THE LEARNED CIT (APPEALS) ON THIS ISSUE. EVEN ON MERITS ALSO, THE 7 APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. T HE ORDER OF THE LEARNED CIT (APPEALS) REQUIRES NO INTERFERENCE AT THIS STAGE. CONSEQUENTLY, I REJECT GROUND NO.3 OF THE APPEAL. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF JUNE, 2015. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 26 TH JUNE, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH