M/s. Shri Vardhman Knityarn, New Delhi V. ITO, New Delhi

ITA 1842/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7742 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 17-05-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 20-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 147; 68; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 1842/DEL/201 2 A.Y. : 2003 - 04 SHRI VARDHMAN KNITYARN PVT. LTD., 205, 2 ND FLOOR, CHOUDHARY COMPLEX, SHAKARPUR, DELHI- 110 092 (PAN:AACCS2940) VS. INCOME TAX OFFICER, WARD 8(3), ROOM NO. 196-A, CR BUILDING, IP ESTATE, NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH.CS ANAND, ADV. DEPARTMENT BY : SH. AMIT JAIN, SR. DR DATE OF HEARING : 17 DATE OF HEARING : 17 DATE OF HEARING : 17 DATE OF HEARING : 17- -- -5 55 5- -- -2016 2016 2016 2016 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 01 0101 01- -- -6 66 6- -- -2016 2016 2016 2016 ORDER ORDER ORDER ORDER PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(APPEALS-XI, NEW DELHI DATED 06.1.2012 PERTAINING TO ASSESSMENT YEAR 2003-04 ON THE FOLLOW ING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LD. CIT(A) IS BAD IN LAW AND ERRONEOUS. ITA NO. 1842/DEL/2012 (AY 2003-04) 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSUMPTION OF J URISDICTION U/S. 147 BY THE AO WAS VALID. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT THE NOTICE U/S. 148 WAS SERVED ON THE ASSESSEE AND THUS ALL THE SUBSEQUENT PROCEEDINGS INCLUDING PASSING OF THE ORDER U/S. 147/144 ARE VALID AND NOT LIABLE TO BE QUASHED. 4. WITHOUT PREJUDICE TO THE GROUND NO.2 & 3, ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT SUFFICIENT OPPORTUNITY WAS GIVEN TO THE APPELLANT WITHOUT DECIDING ON THE SPECIFIC GROUND AS TO HOW THE ASSESSM ENT COULD HAVE BEEN FRAMED U/S. 144 IN THE ABSENCE OF ANY NOTICE BEING GIVEN TO THAT EFFECT UNDER THE INCOME TAX ACT. 5. WITHOUT PREJUDICE TO THE LEGAL GROUNDS NO. 2, 3 & 4 RAISED ABOVE, ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING AN ADDITION OF RS. 10 LACS M ADE BY THE AO UNDER THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT. ITA NO. 1842/DEL/2012 (AY 2003-04) 3 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, THEREFORE, NEED NOT TO REPEAT HERE FOR THE S AKE OF CONVENIENCE. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSE E SH. CS ANAND, ADVOCATE HAS STATED THAT THE AO ISSUED NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED THE ACT) ON 22.3.2010 WHI CH WAS NOT SERVED UPON THE ASSESSEE, BECAUSE ACCORDING TO THE POSTAL AUTHORITIE S REPORT ON 25.3.2010 AND 26.3.2010 THERE WAS A LOCK AT THE PREMISES OF TH E ASSESSEE AND THE NOTICE RETURNED BACK BY THE POSTAL AUTHORITIES VIDE REPORT DATED 29.3.2010 AND THEN THE AO HAS COMPLETED THE ASSESSMENT ON 28.12.2010 U/ S. 147/144 OF THE I.T. ACT BY MAKING ADDITION OF RS. 10 LACS AS UNEXPLAINED CA SH CREDIT U/S. 68 OF THE I.T. ACT, 1961. HE FURTHER STATED THAT SIMILARLY, THE LD. CIT(A) HAS ALSO NOT APPRECIATED THESE FACTS AND BELIEVED THE REASONING ME NTIONED BY THE AO AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. HE FUR THER STATED THAT THE SERVICE OF NOTICE U/S. 148 OF THE ACT THROUGH AFFIXTURE HAS B EEN DONE BY THE AO, CONTRARY TO THE PROCEDURE PRESCRIBED IN THE CIVIL PROCEDURE CODE AND THE ADDITION IN DISPUTE HAS BEEN MADE IS CONTRARY TO THE LAW AND FACTS OF THE CASE, WITHOUT PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. HE REQUESTED THAT THE ASSESSMENT IN DISPUTE MAY BE QUASHED BY ACCEPTING TH E APPEAL FILED BY THE ASSESSEE. IN SUPPORT OF HIS CONTENTION, HE HAS ALSO F ILED A SMALL PAPER BOOK CONTAINING PAGES 1 TO 12 IN WHICH HE HAS ATTACHED THE C OPY OF OUR APPLICATION ITA NO. 1842/DEL/2012 (AY 2003-04) 4 SEEKING DOCUMENT FROM THE ITO, WARD 8(3), DATED 21.6. 2012; COPY OF ORDER SHEET; NOTICE U/S. 148 DATED 22.3.2010; POSTAL CERTI FICATE REGARDING NON SERVICE OF ORDER; REPORT OF NOTICE SERVER/ INSPECTOR REGARD ING AFFIXTURE AND COPY OF THE ASSESSMENT ORDER IN THE CASE OF SHEFALI BAGARIA VS. ITO, WARD 29(4) OF ITAT-G BENCH. 4. ON THE OTHER HAND, SHRI AMIT JAIN, SR. DR ON BEHA LF OF THE DEPARTMENT HAS RELIED UPON THE ORDERS PASSED BY THE REVENUE AUTH ORITIES AND STATED THAT ASSESSEE HAS NOT SUPPLIED ANY FRESH ADDRESS AND THE REVENUE AUTHORITIES HAS SERVED THE NOTICE UPON THE ASSESSEE ON THE ADDRESS AV AILABLE WITH THEM, BUT THE OPPORTUNITY HAS NOT BEEN AVAILED BY THE ASSESSEE. THE REFORE, HE REQUESTED THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES ALONGWITH THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE IN THE SHAPE OF PAPE R BOOK CONTAINING PAGES 1 TO 12 IN WHICH HE HAS ATTACHED THE VARIOUS DOCUMENTARY EVIDENCES (AS DETAILED IN PARA 3 ABOVE OF THIS ORDER) SUPPORTING HIS CLAIM AND WE ARE OF THE CONSIDERED VIEW THAT THE AO AS WELL AS LD. CIT(A) HAS NOT GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE FOR SUBSTANTIATING ITS CLAIM BEFORE THEM. WE ALSO FIND THAT IN THE NOTICE U/S. 148 OF THE I.T. ACT DATED 22.8.2010, THE AO HA S RECORDED THE REASONS THAT THE ASSESSEE HAS RECEIVED CREDIT TO THE TUNE OF RS. 10 LACS IN ITS BANK ACCOUNT ITA NO. 1842/DEL/2012 (AY 2003-04) 5 DURING THE FINANCIAL YEAR 2002-03 RELEVANT TO THIS ASS ESSMENT YEAR ON THE BASIS OF SOME INFORMATION WHICH HAS NOT BEEN SUPPLIED TO THE ASSESSEE BY THE AO AS WELL AS BY THE LD. CIT(A) WHICH IS CONTRARY TO THE P RINCIPLES OF NATURAL JUSTICE. SECONDLY, THE PROCEDURE ADOPTED BY THE AO FOR SERVIC E OF NOTICE U/S. 148 OF THE ACT THROUGH AFFIXTURE IS ALSO CONTRARY TO THE CIVIL PROCEDURE CODE AND IS NOT PERMISSIBLE UNDER THE LAW. 5.1 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE NOT COMMENTING UPON THE MERIT OF THE CASE BECAUSE IT WILL PREJUDICE TO THE MIND OF THE AO AND IN THE INTEREST OF JUSTICE, WE ARE SETTING ASIDE THE ISSUES IN DISPUTE TO THE FILE OF THE AO FOR DECIDING THE SAME DENOVO, AS PER LAW, AFTER GIVING FULL OPPORTUNITY OF HEARING AND SUBSTANTIATING IT S CLAIM BY FILING THE DOCUMENTARY EVIDENCES TO THE ASSESSEE. 5.2 WE HAVE SEEN THAT THE ASSESSEE REMAINED NON-COOP ERATIVE BEFORE THE AO, BECAUSE THE ASSESSEE HAS NOT SUPPLIED ANY FRESH ADDRESS TO THE DEPARTMENT FOR SERVICE OF NOTICE. THEREFORE, WE ARE DIRECTING THE ASSESSEE THROUGH ITS COUNSEL SH. CS ANAND, ADVOCATE TO APPEAR BEFORE THE AO ON 27.7.2016 AT 10.00 AM AND COOPERATE HIM TO COMPLETE THE ASSESSMENT PROCEEDINGS WITHOUT SEEKING ANY UNNECESSARY ADJOURNMENT, BEING THE MATTER IS VERY OLD RELATING TO ASSESSMENT YEAR 2003-04. THERE IS NO NEED TO ISSUE NOTICE BY THE AO TO THE ASSESSEE FOR HEARING ON 27.7.2016, BECAUSE THIS DATE HAS ITA NO. 1842/DEL/2012 (AY 2003-04) 6 BEEN PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AND SH. CS ANAND, LD. COUNSEL OF THE ASSESSEE HAS UNDERTAKEN TO APPEAR BEFORE THE ASSESSING OFFICER ON 27.7.2016, FAILING WHICH THE AO IS AT LIBERTY TO PROCEED, AS PER LAW. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01/6/2016. SD/- SD/- [O.P. KANT] [O.P. KANT] [O.P. KANT] [O.P. KANT] [H.S. SIDHU] [H.S. SIDHU] [H.S. SIDHU] [H.S. SIDHU] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATE 01/6/2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES