Sh. Sardara Singh, Haryana V. ITO, Bhiwani

ITA 1813/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3426 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 1990-1991
• Appeal Filed On: 06-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NK JAIN
• Keywords: Principle of natural justice; Non compliance
• Section: 142(1); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NOS.1812 TO 1815/DEL/2016 ASSESSMENT YEARS : 1989-90 TO 1992-93 SARDARA SINGH, S/O SH. BHOLA THROUGH L/H KANWAR PAL, SATPAL, HUKUM SINGH SONS AND SURAJBAI WIDOW, GALI BHOJA WALI DEVI, NAYA BAZAR, BHIWANI, HARYANA. VS. ITO, WARD- 2, BHIWANI. PAN : FBJPS2742J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N. K. JAIN, ADV. DEPARTMENT BY : SHRI ATIQ AHMAD, SR.DR DATE OF HEARING : 07-02-2018 DATE OF PRONOUNCEMENT : 21-02-2018 O R D E R PER BENCH : THIS BATCH OF 4 APPEALS FILED BY THE ASSESSEE ARE D IRECTED AGAINST THE COMMON ORDER DATED 29.01.2016 OF THE CIT(A), HISAR CONFIRMING PENALTY OF RS.10,000/- EACH LEVIED BY THE ASSESSING OFFICER U/ S 271(1)(B) OF THE I.T. ACT, 1961 RELATING TO ASSESSMENT YEARS 1989-90 TO 1992-9 3 RESPECTIVELY. FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGET HER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL. THE ASSESSING OFFICER ISSUED NOTICE U/S 148 IN THE NAME OF THE ASSESSEE FOR THE 2 ITA NOS.1812 TO 1815/DEL/2016 ASSESSMENT YEARS 1989-90 TO 1996-97 DATED 21.05.200 1 AFTER SEEKING APPROVAL OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, ROHTA K RANGE, ROHTAK. SUCH NOTICES WERE SENT THROUGH POST BUT WERE RETURNED BA CK UNSERVED WITH THE POSTAL REMARKS INCOMPLETE ADDRESS. THEREAFTER, THE NOTI CES WERE SENT THROUGH THE NOTICE SERVER, WHO REPORTED THAT IN SPITE OF REPEAT ED VISITS THE ASSESSEE HAS REFUSED TO RECEIVE THE NOTICES. THE ASSESSING OFFI CER ACCORDINGLY HELD REFUSAL TO RECEIVE THE NOTICES TANTAMOUNT TO BE A VALID SER VICE. SINCE NO RETURN OF INCOME WAS FILED BY THE ASSESSEE IN RESPONSE TO NOT ICE U/S 148, THE ASSESSING OFFICER ISSUED NOTICES U/S 142(1) DATED 28.10.2003 FIXING THE DATE ON 07.11.2003. THE NOTICE WAS ISSUED IN THE NAME OF S HRI KANWAR PAL SINGH, SHRI SATPAL, SHRI HUKAM SINGH AND SMT. SURAJ BAI, WHO AR E ALL LEGAL HEIRS OF THE ASSESSEE BUT ALL OF THEM REFUSED TO RECEIVE THE NOT ICES AS REPORTED BY THE NOTICE SERVER. THE ASSESSING OFFICER OBTAINED A DEATH CER TIFICATE OF SHRI SARDARA SINGH FROM THE MUNICIPAL COUNSEL BHIWANI. AGAIN NOTICES WERE SENT THROUGH THE NOTICE SERVER WHO REPORTED THAT THE LEGAL HEIRS HAV E REFUSED TO RECEIVE THE NOTICES ISSUED. THE ASSESSING OFFICER, THEREAFTER, CONTACTED SHRI KANWAR PAL SINGH, ELDEST SON OF THE ASSESSEE AND CALLED HIM TO HIS OFFICE ON 21.01.2004 AND TRIED TO MAKE HIM UNDERSTAND TO TAKE THE SERVICE OF NOTICES AND TO FILE THE RETURN OF INCOME AND TO CO-OPERATE WITH THE DEPARTMENT FOR FINALIZATION OF THE ASSESSMENT PROCEEDINGS. IN THE BODY OF THE ASSESSM ENT ORDER, THE ASSESSING OFFICER, HOWEVER, MENTIONED THAT SHRI KANWAR PAL SI NGH REFUSED TO DO SO ON THE PLEA THAT HIS FATHER HAS NOT GIVEN ANYTHING OUT OF THE COMPENSATION AMOUNT 3 ITA NOS.1812 TO 1815/DEL/2016 RECEIVED BY HIM AND, THEREFORE, HE WILL NOT CO-OPER ATE WITH THE DEPARTMENT. THE ASSESSING OFFICER QUOTED THE PROVISIONS OF SECTION 159 OF THE I.T. ACT AND HELD THAT THE LEGAL REPRESENTATIVES ARE LIABLE TO PAY AN Y SUM WHICH THE DECEASED WOULD HAVE BEEN LIABLE TO PAY IF HE HAD NOT DIED, I N THE LIKE MANNER AND TO THE SAME EXTENT AS THE DECEASED. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT EX-PARTE U/S 144 OF THE I.T. ACT FOR VARIOUS YEARS. IN THE MEANTIME, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(B) OF THE I.T. ACT. SINCE THERE WAS NO RESPONSE FROM THE SIDE OF THE AS SESSEE, THE ASSESSING OFFICER LEVIED PENALTY OF RS.10,000/- FOR ASSESSMENT YEARS 1989-90 TO 1992-93. SIMILAR PENALTIES HAVE BEEN LEVIED FOR OTHER ASSESSMENT YEA RS I.E. A.Y. 1993-94 TO 1996-97. 3. IN APPEAL, THE LD. CIT(A) IN THE COMMON ORDER DA TED 29.01.2016 DISMISSED THE APPEAL FILED BY THE ASSESSEE BY OBSER VING AS UNDER :- 5. I HAVE CONSIDERED THE SUBMISSION OF THE APPELLA NT AND MY OBSERVATION IN THIS CASE IS AS UNDER :- 5.1 NOTICES U/S. 148 WERE ISSUED IN THE YEAR 2001 W HEN ASSESSEE WAS ALIVE. BUT IN SPITE OF SEVERAL VISITS OF NOTICE SERVER, NOTICES W ERE REFUSED TO BE SERVED UPON. THERE WAS TOTAL NON COOPERATION ON PART OF THE ASSESSEE W HICH IS EVIDENT FROM THE FACTS THAT NO RETURN OF INCOME WAS FILED IN RESPONSE TO NOTICE U/ S. 148. LATER ON NOTICES U/S. 142(1) WERE ISSUED BY AO TO THE LEGAL HEIRS WHO ALS O REFUSED TO RECEIVE THE NOTICES AS REPORTED BY NOTICE SERVER OF INCOME TAX DEPARTMENT. EVEN THE INSPECTOR OF THE DEPARTMENT WAS MADE TO SERVE THE NOTICES U/S. 142(1 ) OF I. T. ACT THROUGH AFFIXTURE. HENCE, AO HAS MADE ALL POSSIBLE EFFORTS TO ENSURE A VALID SERVICE OF THE NOTICE. IT IS SEEN FROM ASSESSMENT ORDERS U/S. 144 OF I.T. ACT DATED 30.01.2004, SHRI KANWAR PAL SINGH, ELDEST SON OF THE ASSESSEE WAS CO NTACTED BY AO AND HE ATTENDED THE OFFICE ON 21.01.2004. AO TRIED HIS BEST TO MAKE HIM UNDERS TAND TO TAKE THE SERVICE OF THE NOTICES AND TO TILE THE RETURN OF INCOME. HE HAS ME NTIONED IN HIS ORDER THAT THE SON REFUSED TO DO SO AS HE HAS NOT GOT ANYTHING OUT OF COMPENSA TION AMOUNT RECEIVED BY HIS FATHER. IN THIS CASE AIL THE LEGAL HEIRS HAV E NOT COOPERATED WITH THE DEPARTMENT TO FINALIZE THE CASE. THEREFORE, AO HAS RIGHTLY LEV IED THE PENALTY OF RS. 10,000/- FOR NON COMPLIANCE TO THE NOTICES IN THIS CASE. 5.2 IN CASE, ADDRESS MENTIONED IN THE NOTICES WAS N OT CORRECT BUT, IT WAS THE DUTY OF THE APPELLANT TO INFORM THE CORRECT ADDRESS TO T HE AO. THEREFORE, IT IS VERY APPARENT 4 ITA NOS.1812 TO 1815/DEL/2016 EVEN WHEN THE ELDEST SON OF THE ASSESSEE ATTENDED T HE OFFICE HE DID NOT BOTHER TO INFORM THE CORRECT ADDRESS WHERE THE NOTICES CAN BE SENT. THEREFORE, THE PLEA OF THE ASSESSEE THAT THERE ARE SHORT COMINGS IN THE SERVIC E OF THE NOTICES AND IT HAS NOT BEEN SERVED CANNOT BE ACCEPTED. IT WOULD HAVE BEEN THE M ISTAKE OF AO IF THE CORRECT ADDRESS WAS COMMUNICATED TO HIM AND IN THAT CASE NO TICES WERE NOT SERVED AT THE GIVEN ADDRESS. IN THIS CASE THERE IS NO MISTAKE ON PART OF AO AS HE WAS NEVER INFORMED ABOUT ANY OTHER ADDRESS WHERE NOTICE COULD HAVE BEEN SERVED. CONSIDERING THE ABOVE FACTS I UPHOLD THE PENALTY OF RS. 10.000/ - IMPOSED BY AO FOR EACH ASSESSMENT YEAR I.E. A.YS. 1988-1989 TO 1996-1997. 6. IN RESULT, THE APPEALS ARE DISMISSED. 4. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. COUNSEL FOR THE ASSESSEE STRONGLY OBJECTED T O THE ORDER OF THE LD. CIT(A) CONFIRMING THE PENALTY SO LEVIED. HE SUBMIT TED THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY FOR NON-COMPLIANCE O F THE NOTICE U/S 142(1) WHICH WAS ISSUED BUT NOT SERVED AS NO RETURN WAS FILED IN RESPONSE TO NOTICE U/S 148 OF THE I.T. ACT. HE SUBMITTED THAT THE PROCEEDINGS TO ISSUE NOTICE U/S 142(1) IS ILLEGAL SINCE SUCH NOTICE U/S 142(1) CAN ONLY BE IS SUED AFTER THE END OF THE PERIOD U/S 139(1) AND BEFORE THE END OF THE RELEVANT ASSES SMENT YEAR AND NOT AFTER THE END OF THE RELEVANT ASSESSMENT YEAR. HE SUBMITTED THAT IN ALL THE CASES THE NOTICE U/S 142(1) HAS BEEN ISSUED AFTER THE END OF THE RELEVANT ASSESSMENT YEARS I.E. A.Y. 1988-89 TO 1996-97. FOR THE ABOVE PROPOS ITION, HE REFERRED TO THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF MOTOROLA INC. VS. DCIT REPORTED IN 96 TTJ 1 (DELHI) WHEREIN IT HAS BE EN HELD THAT THE NOTICE U/S 142(1)(I) HAS TO BE ISSUED AFTER THE END OF PERIOD IN SECTION 139(1) AND BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR BUT IT CANN OT BE ISSUED AFTER THE END OF 5 ITA NOS.1812 TO 1815/DEL/2016 THE RELEVANT ASSESSMENT YEAR. HE ALSO RELIED ON TH E DECISION OF THE KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF SHAW WALLAC AN D CO. LTD. VS. DCIT REPORTED IN 101 TTJ 258. SO FAR AS CLAUSE (II) AND CLAUSE (III) OF SECTION 142(1) ARE CONCERNED, HE SUBMITTED THAT NO INFORMATION HAS BEEN CALLED FOR THROUGH SAID NOTICE. EVEN NONE OF THE POINT AT (B) AND (C) HAS BEEN STRUCK OUT, THEREFORE, THE NOTICE IS ILLEGAL AND VAGUE AND NO NON-COMPLIANCE O F THE NOTICE CAN BE INFERRED. FOR THE ABOVE PROPOSITION, HE REFERRED TO THE DECIS ION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF HARVINDER SINGH JAGGI VS. A CIT REPORTED IN 150 ITD 702 WHEREIN IT HAS BEEN HELD THAT THE FAILURE OF ASSESS EE TO APPEAR IN RESPONSE TO VAGUE NOTICE U/S 142(1) DID NOT ATTRACT PENALTY U/S 271(1)(B) OF THE I.T. ACT. HE FURTHER SUBMITTED THAT THE PENALTY NOTICE U/S 274 R .W.S. 271 DATED 30.01.2004 IS ALSO VAGUE SINCE OUT OF NON-COMPLIANCE OF VARIOUS N OTICES IT DOES NOT INDICATE FOR NON-COMPLIANCE OF WHICH NOTICE, EXPLANATION WAS SOUGHT BECAUSE NONE OF VARIOUS SECTIONS HAS BEEN STRUCK OUT. THEREFORE, T HE PENALTY ORDER U/S 271(1)(B) IS NOT VALID IN LAW. FOR THE ABOVE PROPOSITION, HE RELIED ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MUNINAG A REDDY VS. ACIT REPORTED IN 396 ITR 398 WHEREIN IT HAS BEEN HELD TH AT IN ORDER TO LEVY OF PENALTY, THE NOTICE WOULD HAVE TO SPECIFICALLY STAT E THAT THE GROUND MENTIONED IN SECTION 271(1)(C) OF THE I.T. ACT NAMELY WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME THAT THE PENALTY PROCEEDINGS ARE BEING INITIATED. SENDING A PRINTED FORM WITH T HE GROUNDS MENTIONED IN SECTION 271 OF THE I.T. ACT WOULD NOT SATISFY THE R EQUIREMENT OF LAW. THE 6 ITA NOS.1812 TO 1815/DEL/2016 ASSESSEE SHOULD KNOW THE GROUND WHICH HE HAS TO MEE T SPECIFICALLY OTHERWISE THE PRINCIPLES OF NATURAL JUSTICE WOULD BE VIOLATED AND CONSEQUENTLY, NO PENALTY COULD BE IMPOSED ON THE ASSESSEE IF THERE IS NO SPE CIFIC GROUND MENTIONED IN THE NOTICE. 6. LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE EN TRY IN THE ORDER-SHEET, COPY OF WHICH IS PLACED IN PAPER BOOK, SUBMITTED THAT NO ATTEMPT TO EFFECT PERSONAL SERVICE WAS MADE AND ALL THE NOTICES WERE SENT THRO UGH THE NOTICE SERVER WHO REPORTED THAT THE LEGAL HEIRS REFUSED TO RECEIVE, A FACT WHICH IS AGAINST FACTUAL POSITION. FURTHER, NO SATISFACTION WAS RECORDED BE FORE INITIATING THE PENALTY PROCEEDINGS, A LEGAL REQUIREMENT OF SECTION 275 OF THE I.T. ACT. HE SUBMITTED THAT SINCE NO NOTICE WAS SERVED THEREFORE, COMPLIAN CE OF NOTICE WAS NOT POSSIBLE. EVEN OTHERWISE ALSO, HE SUBMITTED THAT T HE PROCEEDINGS ARE ILLEGAL BECAUSE THE NOTICE U/S 148 WAS ILLEGAL SINCE ENHANC ED COMPENSATION ARE ASSESSABLE IN THE YEAR OF RECEIPT U/S 45(B) AFTER F INAL DECISION OF SLP BY THE HONBLE SUPREME COURT ON 12.11.2002. REFERRING TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. CHET R AM HUF AND OTHERS REPORTED IN 400 ITR 23, HE SUBMITTED THAT THE HON'B LE SUPREME COURT IN THE SAID DECISION HAS HELD THAT WHERE THE ASSESSEE HAD RECEI VED SOME AMOUNT OF ENHANCED COMPENSATION AS ALSO INTEREST THEREON UNDE R AN INTERIM ORDER PASSED BY THE HIGH COURT IN PENDING APPEALS RELATING TO LA ND ACQUISITION, THE SAME IS LIABLE TO BE ASSESSED TO INCOME-TAX IN THE YEAR IN WHICH IT WAS RECEIVED. HE SUBMITTED THAT WITHOUT CONSIDERING ALL THESE LEGAL ASPECTS, THE LD. CIT(A) 7 ITA NOS.1812 TO 1815/DEL/2016 DISMISSED THE APPEAL FILED BY THE ASSESSEE ONLY BEC AUSE THE ASSESSEE REFUSED TO RECEIVE THE NOTICES AND DID NOT COOPERATE WITH THE DEPARTMENT. HE FURTHER SUBMITTED THAT THE PENALTY NOTICE HAS BEEN ISSUED I N THE NAME OF THE DEAD PERSON. HE ACCORDINGLY SUBMITTED THAT THE PENALTY SO LEVIED SHOULD BE DELETED. 7. LD. DR ON THE OTHER HAND HEAVILY RELIED ON THE O RDER OF THE LD. CIT(A). HE SUBMITTED THAT WHEN THE ASSESSEE DID NOT APPEAR BEFORE THE ASSESSING OFFICER DESPITE NOTICE SERVED THROUGH AFFIXTURE AS THE ASSE SSEE REFUSED TO RECEIVE THE NOTICE, THE ASSESSING OFFICER WAS FULLY JUSTIFIED I N LEVYING PENALTY U/S 271(1)(B) FOR SUCH DEFAULT AND THE LD. CIT(A) WAS ALSO JUSTIF IED IN UPHOLDING SUCH PENALTY. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECI SIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE. WE FIND THE ASSESSEE SHR I SARDARA SINGH HAS EXPIRED ON 04.05.2003, A FACT BROUGHT ON RECORD BY THE ASSE SSING OFFICER IN THE ASSESSMENT ORDER. HOWEVER, DESPITE RECORDING SUCH DEATH IN THE BODY OF THE ASSESSMENT ORDER AND DESPITE ISSUING THE NOTICE U/S 142(1) TO THE LEGAL HEIRS, THE NOTICE U/S 274 R.W.S. 271 DATED 30.01.2004 HAS BEEN ISSUED TO SHRI SARDARA SINGH, SON OF SHRI BHOLA, LOHAR BAZAR, BHIWANI. TH IS INDICATES THAT THE NOTICE HAS BEEN ISSUED TO A DEAD PERSON WHICH IS NOT PERMI SSIBLE IN LAW. FURTHER, WHEN THE ASSESSING OFFICER WAS ABLE TO CONTACT SHRI KANW AR PAL SINGH, THE ELDEST SON OF THE ASSESSEE AND CALL HIM TO HIS OFFICE IN JANUA RY, 2004, WE DO NOT FIND ANY REASON AS TO HOW HE COULD NOT GET THE CORRECT ADDRE SS AND SEND THE NOTICES 8 ITA NOS.1812 TO 1815/DEL/2016 THROUGH THE NOTICE SERVER AND NOT BY REGISTERED POS T. APART FROM THIS, WE FIND THE INAPPROPRIATE PORTIONS OF THE NOTICE HAVE NOT B EEN STRUCK OUT. SINCE ADMITTEDLY THE ASSESSEE IS ALREADY DEAD AND THERE I S NO PROPER ATTEMPT BY THE ASSESSING OFFICER TO SERVE THE NOTICE ON THE ASSESS EE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE ARE OF THE CO NSIDERED OPINION THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(B) OF THE I .T. ACT. WE, THEREFORE, SET-ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSIN G OFFICER TO CANCEL THE PENALTY SO LEVIED. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 9. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST FEBRUARY, 2018. SD/- SD/- (BEENA A. PILLAI) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21-02-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI