ITO, New Delhi V. Sh. Ajay Pal Singh, New Delhi

ITA 1874/DEL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0104 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence; Question of law; Procedural lapse; Assessment record
• Section: 143(3); 142(1); 68; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A , NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 1874/DEL/2012 AY: 2008 - 09 ITO, WARD 21(1), ROOM NO.D - 3 VS. SH.AJAY PAL SINGH D BLOCK VIKAS BHAWAN C 5/81, SECTOR 5, ROHINI NEW DELHI 110 002 NEW DELHI 110 085 C.O.NO.223/DEL/2012 (IN ITA NO. 1874/DEL/2012) AY: 2008 - 09 SH.AJAY PAL SINGH VS. ITO, WARD 21(1) NEW DELHI NEW DELHI DEPT. BY : MS.Y.KAKKAR, D.R. ASSESSEE BY : SH. RAJIV SAXENA, ADV. ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE LD.CIT(A) - X VI , NEW DELHI DATED 30.11.2011 PERTAINING TO THE ASSESSMENT YEAR (AY) 200 8 - 09 . THE ASSESSEE HAS FILED C.O.NO.223/DEL/12. 2 . FACTS IN BRIEF: - T HE ASSESSEE IS ENGAGED IN SALE/PURCHASE OF AMUL MILK UNDER THE NAME M/S PAWAR BROTHERS SITUATED AT C - 5/81, JANTA FLATS, SECTOR 5, ROHINI, DELHI 110 085. HE FILED HIS RETURN OF INCOME AND THE SAME WAS PROCESSED U/S 143(1) OF THE ACT. THE ASSESSING OFFICER ( AO ) PASSED AN ORDER U/S 144 OF THE INCOME TAX ACT, 1961 (THE ACT ) ON 22.12.2010 DETERMINING THE TOTAL TAXABLE INCOME AT RS.61,04,975/ - . AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY GRANTED RELIEF. ITA NO. 1874/DEL/2012 C.O. NO.223/DEL/2012 (IN ITA 1874/DEL/12) A.Y.: 2008 - 09 SH. AJAY PAL SINGH, NEW DELHI 2 3. AGGRIEVED TH E REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) ERRED IN ADMITTING THE ADDITIONAL EVIDENCE OF THE ASSESSEE, AND DELETING THE ADDITION OF RS.59,87,420/ - , IGNORING THE FACT THAT THE CONDITIONS PRESCRIBED FOR ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A(1)(A) OF THE INCOME TAX RULES, 1962, DO NOT EXIST IN THIS CASE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) ERRED IN ADMITTING THE ADDITIONAL EVIDENCE OF TH E ASSESSEE,, WITHOUT GIVING ANY OPPORTUNITY TO THE AO OF BEING HEARD AND/OR TO CROSS CHECK AND REBUT THOSE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE BEFORE THE LD.CIT(A), AS REQUIRED VIDE RULE 46A(3) OF THE INCOME TAX RULES, 1962. THE SAME IS AGAINST T HE PRINCIPLES OF NATURAL JUSTICE. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR VARY THE ABOVE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING . 4. THE ASSESSEE HAS FILED CROSS OBJECTION ON THE FOLLOWING GROUNDS. 1. THAT THE ASSESSMENT MADE U/S 144 IS BAD IN LAW AND LIABLE TO BE QUASHED (A) BECAUSE NOTICE U/S 143 (2) WAS NOT SERVED ON THE ASSESSEE TERM OF WHICH ARE REQUIRED TO BE COMPLIED. (B) BECAUSE ASSESSEE FILED RETURN U/S 139 (1), CONDITION AND NOTICE U/S 142 (1) WAS NOT SERVED TO COMPLY WITH THE DIRECTION, OTHER CONDITIONS ARE NOT FULFILLED WHICH ARE REQUIRED TO MAKE AN ASSESSMENT U/S 144. (C) BECAUSE BEFORE COMPLETING ASSESSMENT U/S 144 THERE IS MANDATORY REQUIREMENT TO SERVE SHOW CAUSE NOTICE FOR COMPLETIN G BEST JUDGMENT ASSESSMENT OR TO SERVE NOTICE U/S 142 (1) UNDER PROVISO 1 & 2 OF SECTION 144 SUCH ASSESSMENT IS REQUIRED TO BE QUASHED ITSELF. (D) BECAUSE ON INSPECTION OF ASSESSMENT RECORD IT WAS FOUND THAT ALL THE NOTICES WERE SENT AT THE WRONG/ INACCU RATE ADDRESS. (E) BECAUSE THE AFFIXTURE NOTICE WAS EVEN AFFIXED AT THE WRONG/INACCURATE ADDRESS. 2. THAT GROUND NO. 1 RAISED BY A O FOR ADMITTING ADDITIONAL EVIDENCE COULD NOT BE RAISED BEFORE THE HON'BLE ITAT AS CIT (A) HAS NOT EXAMINED ANY ADDITIONAL E VIDENCE TO DECIDE THE APPEAL BUT HAS EXAMINE THE SAME BANK STATEMENT WHICH WAS ALREADY ON RECORD WITH THE A O . 3. THAT LD. A O HAS ALSO ERRED IN LAW AS WELL AS ON FACTS IN RAISING GROUND NO. 2 BECAUSE CIT (A) HAS APPRAISED THE SAME BANK STATEMENT ON THE BAS IS OF WHICH ADDITION WAS MADE AND FOUND THAT THE ASSESSEE IS OPERATING CURRENT ACCOUNT IN WHICH BUSINESS TRANSACTION OF SALES TO THE TUNE OF RS. 2,18,76,159/ - WERE ENTERED AGAINST THE PURCHASES MADE WHICH ARE MORE THAN ITA NO. 1874/DEL/2012 C.O. NO.223/DEL/2012 (IN ITA 1874/DEL/12) A.Y.: 2008 - 09 SH. AJAY PAL SINGH, NEW DELHI 3 THE DEPOSITS IN THE CURRENT ACCOUNT, APPRAISING THE SAME EVIDENCE CANNOT BE TREATED AS ADMITTING ADDITIONAL EVIDENCE. 4. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE GROUNDS CAN ALSO BE NOT RAISED ON ADMITTING OF ADDITIONAL EVIDENCE BECAUSE U/S 250 ( 4) OF THE IT ACT CIT ( A) MAY MAKE SUCH FURTHER ENQUIRY AS HE THINKS FIT, APPRAISING THE SAME EVIDENCE ALREADY ON RECORD BY EXAMINING THE BANK STATEMENT ONLY APPEAL WAS DISPOSED FOR WHICH HE WAS EMPOWERED. IT IS, THEREFORE, PRAYED THAT DEPARTMENTAL APPEAL MAY KINDLY BE DISMISSED. 5 . HEARD SH. RAJIV SAXENA, THE LD.COUNSEL FOR THE ASSESSEE AND MS.Y.KAKKAR, LD. D.R. ON BEHALF OF THE REVENUE. 6 . O N A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ON PERUSAL OF MATERIAL ON RECORD, ORDERS OF THE AUTHORITIES BELOW, CASE LAWS CITED, WE HOLD AS FOLLOWS . 7. WE FIRST TAKE UP THE JURISDICTIONAL ISSUE. THE CASE OF THE ASSESSEE IS THAT, THE A.O. HAS NOT SERVED THE NOTICES EITHER U/S 142(1) OR U/S 143(2) OF THE ACT OR THE MANDATORY NOTICE REQUIRED TO BE SERVED BEFORE COMPLETING THE ASSESSMENT U/S 144 OF THE ACT ON THE ASSESSEE. WE HAVE PERUSED THE PAPER BOOK FILED BY THE ASSESSEE CONSISTING OF 27 PAGES AND WE FIND THAT VARIOUS NOTICES ISSUED AND THE AFFIXTURE NOTICE DT. 20.12.2010 WAS ISSUED/ AFFIXED AT C - 5/ 18 , JANTA FLATS, SECTOR 16, ROHINI, NEW DELHI. A COPY OF THE SPEED POST DESPATCH LIST DEMONSTRATE THAT ONE NOTICE IN THIS CASE HAD BEEN ADMITTEDLY ISSUED AT THE ADDRESS C 5/5/81 , SECTOR 5, ROHINI, NEW DELHI. THE ASSESSEE HAS IN ITS RETURN OF INCOME HAS GIVEN THE ADDRES S AS C - 5 / 5/81 , JANTA FLATS, SECTOR 5, ROHINI, NEW DELHI 110 085. 7.1. LD.D.R. FILED A PAPER BOOK CONSISTING OF 27 PAGES AND POINTED OUT THAT IN THE TAX AUDIT REPORT FORM 3CB ADDRESS OF THE ASSESSEE WAS GIVEN A S C - 5 / 18 , SECTOR 5 , ROHINI, NEW DELHI. SHE FURTHER POINTED OUT TO THE DESPATCH REGISTER WHEREIN THE AO SENT SPEED POST TO THE ADDRESS 5/5/81 , JANTA FLATS, SECTOR 5, ROHINI, DELHI 85. SHE POINTED OUT TO THE COPIES OF DOCUMENTS OBTAINED FROM PUNJAB NATIONAL BANK TO DEMONSTRATE THAT THE ASSESSEE HAS GIVEN THE ADDRESS AS C - 5/18, SECTOR 16, ROHINI, DELHI 85. SHE ITA NO. 1874/DEL/2012 C.O. NO.223/DEL/2012 (IN ITA 1874/DEL/12) A.Y.: 2008 - 09 SH. AJAY PAL SINGH, NEW DELHI 4 RELIED ON A NUMBER OF CASE LAWS AND ARGUED THAT THE PRESUMPTION IS THAT THE NOTICE HAS BEEN SERVED ON THE ASSESSEE. 7.2 . AFTER VERIFYING THE RECORD WE COME TO A CONCLUSION THAT THE NOTICE I N QUESTION U/S 142(1) AND 143(2) HAVE NOT BEEN SERVED ON THE ASSESSEE THOUGH THERE IS PROOF OF ISSUE BY SPEED POST , OF ONLY ONE NOTICE AT THE ADDRESS 5/5/81, JANTA FLATS, SECTOR 5, ROHINI, DELHI 81 . W HICH NOTICE WAS SENT IS NOT KNOWN. THERE IS NO POSITIVE P ROOF PRODUCED BEFORE US O F SERVING OF THE NOTICE U/S 143(2) . THE ASSESSEE IN HIS RETURN OF INCOME HAS SHOWN THE ADDRESS AS C - 5/5/81, JANTA FLATS, SECTOR 5, ROHINI, DELHI 85, AND WHEREAS ALL THE NOTICES EXCEPT ONE HAVE BEEN SENT TO THE ADDRESS DOOR NO. C - 5/81, SECTOR 5, ROHINI , DELHI. AS O NLY ONE NOTICE IS SAID TO HAVE BEEN SENT TO THE ADDRESS C - 5/5/81 , WE AT BEST CAN PRESUME THAT ONE NOTICE WAS SERVED AS THE ASSESSEE. WE DO NOT KNOW WHICH IS THAT NOTICES. 7.3 . WE NOW EXTRACT THE RELEVANT PROVISIONS OF THE ACT. SECTION 143(2) OF THE ACT, READS AS UNDER: 'WHERE A RETURN HAS BEEN FURNISHED UNDER SECTION 139,OR IN RESPONSE TO A NOTICE UNDER SUB - SECTION (1) OF SECTION 142,THE ASSESSING OFFICER SHALL, - ................................................. (I I) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (I), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER - PAID THE TAX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN: PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED. ' SECTION 148 OF THE ACT, ISSUE OF NOTICE WHERE INCOME HAS ESCAPED ASSESSMENT. (1) BEFORE MAKING THE ASSESSMENT, REASSESSMENT OR RECOMPUT ATION UNDER SECTION 147,THE ASSESSING OFFICER SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, A RETURN OF HIS INCOME OR THE INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR CORRESPONDING TO THE RELEVANT ASSESSMENT YEAR, IN THE PRESCRIBED FORM AND VERIFIED IN THE ITA NO. 1874/DEL/2012 C.O. NO.223/DEL/2012 (IN ITA 1874/DEL/12) A.Y.: 2008 - 09 SH. AJAY PAL SINGH, NEW DELHI 5 PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRES - CRIBED; AND THE PROVISIONS OF THIS ACT SHALL, SO FA R AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 : ' SECTION 292BB OF THE ACT, NOTICE DEEMED TO BE VALID IN CERTAIN CIRCUMSTANCES. 'WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDING OR CO - OPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM, HAS BEEN DULY SERVED UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND S UCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDING OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS - 2(A) NOT SERVED UPON HIM; OR (B) NOT SERVED UPON HIM IN TIME; OR (C) SERVED UPON HIM IN AN IMPROPER MANNER: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT. ' 7. 4 . THE FACT THAT IN THE TAX AUDIT REPORT AND IN THE BANK PAPERS THE ADDRESS WAS NOTED AS C - 518, SECTOR 5, ROHINI, DELHI, DOES NOT TAKE US TO THE CONCLUSION THAT THE NOTICE IN QUESTION HAS BEEN SERVED ON THE ASSESSEE IN THE ABSENCE OF ANY EVIDENCE, WHEN THE ASSESSEE HAS SPECIFICALLY DENIED SERVICE. 7.4.1. WHEN NOTICE S ARE NOT SERVED, THE LEGAL POSITION LAID DOWN BY VARIOUS HIGH COURTS ARE AS FOLLOWS. THE HON BLE HIGH COURT IN THE CASE OF CIT VS. ADARSH TRAVEL BUS SERVICE (2012) 17 TAXMANN.COM 140 (ALL.) AT PARAS 5 TO 9 HAS HELD AS FOLLOWS. 5. BY CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF RECORD, IT APPEARS THAT SECTION 143(2) OF THE ACT IS IN TWO PARTS. THE FIRST PART DEALS WITH JURISDICTION AND SECOND WITH THE PROCEDURE. THE PROVISO TO SECTION 143(2) OF THE ACT PUTS AN EMBARGO ON THE ASSESSING OFFICER TO EXERCISE JURISDICTION AFTER THE EXPIRY OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FILED BY THE ASSESSEE. IT IS THE DISCRETION OF THE ASSESSING OFFICER TO ACCEPT THE RETURN AS IT IS OR TO PROCEED FURTHER WITH THE ASSESSMENT OF INCOME, ONCE THE ASSESSING OFFICER DECIDES TO PROCEED, HE HAS TO ISSUE NOTICE UNDER SECTION 143(2) WITHIN THE PRESCRIBED TIME - LIMIT TO MAKE THE ASSESSEE AWARE THAT HIS RETURN HAS BEEN SELECTED FOR SCRUTINY ASSESSMENT. ITA NO. 1874/DEL/2012 C.O. NO.223/DEL/2012 (IN ITA 1874/DEL/12) A.Y.: 2008 - 09 SH. AJAY PAL SINGH, NEW DELHI 6 6. IT MAY BE MENTIONED THAT THE HON'BLE SUPREME COURT IN THE CASE OF ASSTT: CIT V. HOTEL BLUE MOON [2010] 188 TAXMAN 113OBSERVED THAT THE NOTICE UNDER SECTION 143(2) WITHIN THE TIME PRESCRIBED, IS MANDATORY. SIMILAR VIEWS WERE EXPRESSED BY THIS COURT IN IT APPEAL NO. 134 OF 2005 (CIT V. BORA POLYCLINIC (P.) LTD.) DECIDED ON 05.07.2010 AS WELL AS IN CIT V. RAJEEV SHARMA [2010] 192 TAXMAN 197 (AIL.). 7. IN VIEW OF WELL SETTLED LEGAL PROPOSITION (SUPRA), WE ARE OF THE VIEW THAT PROVISO TO SECTION 143(2) APPL IES TO RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148. THEREFORE, IT WAS INCUMBENT UPON THE AO TO ISSUE NOTICE UNDER SECTION 143(2) WITHIN THE PERIOD, AS STIPULATED IN THE PROVISION. 8. IN THE INSTANT CASE, ADMITTEDLY, THE NOTICE UNDER SECTION 1 43(2) HAS BEEN ISSUED BEYOND THE PERIOD OF ONE YEAR FROM THE DATE OF FILING OF THE RETURN. FURTHER, IT MAY BE MENTIONED THAT OMISSION ON THE PART OF THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND THE SAM E IS NOT CURABLE, AND, THEREFORE, THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) CANNOT BE DISPENSED WITH AS ALREADY OBSERVED IN HOTEL BLUE MOON (SUPRA). 9. IN VIEW OF THE ABOVE, THE IMPUGNED ORDER PASSED BY THE TRIBUNAL IS HEREBY SUSTAINED ALONG WITH T HE REASONS MENTIONED THEREIN. THE ANSWER TO THE SUBSTANTIAL QUESTION OF LAW IS IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEAL HAS NO MERITS AND THE SAME IS DISMISSED. AGAIN THE HON BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJE EV SHARMA (2010) 192 TAXMAN 197 (ALL.) AT PARA 45 HAS HELD AS FOLLOWS. 45. IN VIEW OF THE ABOVE, THE PROVISION CONTAINED IN S.143(2) OF THE ACT IS MANDATORY IN NATURE AND IT SHALL BE OBLIGATORY FOR THE AO TO APPLY MIND TO THE CONTENTS OF THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT AND RECORD REASONS AND THEREAFTER, ISSUE NOTICE U/S 143(2) OF THE ACT BEFORE PROCEEDING TO DECIDE THE CONTROVERSY WITH REGARD TO ESCAPED ASSESSMENT . THE HON BLE DELHI HIGH COURT IN THE CASE OF ALPINE ELECT RONICS ASIA PTE. LTD. VS. DIT (2012) 18 TAXMAN.COM 246 (DELHI) AT PARA 24 HAS HELD AS FOLLOWS. 24. S.143(2) IS APPLICABLE TO PROCEEDINGS U/S 147/148 OF THE ACT. PROVISO TO S.148 OF THE ACT PROTECTS AND GRANTS LIBERTY TO THE REVENUE TO SERVE NOTICE U/ S 143(2) OF THE ACT BEFORE PASSING OF THE ASSESSMENT ORDER FOR RETURNS FURNISHED ITA NO. 1874/DEL/2012 C.O. NO.223/DEL/2012 (IN ITA 1874/DEL/12) A.Y.: 2008 - 09 SH. AJAY PAL SINGH, NEW DELHI 7 ON OR BEFORE 1 ST OCTOBER,2005. IN RESPECT OF RETURNS FILED PURSUANT TO NOTICE U/S 148 OF THE ACT AFTER 1 ST OCTOBER,2005, IT IS MANDATORY TO SERVE NOTICE U/S 143(2) OF THE ACT , WITHIN THE STIPULATED TIME LIMIT . 7. 5 . RESPECTFULLY FOLLOWING THE JUDGEMENT OF THE HON BLE HIGH COURT S, WE HOLD TH AT NON SERVICE OF NOTICE U/S 143(2) RESULTS IN THE ASSESSMENT ORDER BECOMING BAD IN LAW. THIS IS TRUE EVEN WHEN THE ASSESSMENTS ARE UNDER NORMAL PROVISIONS OF THE ACT. RELIANCE IS PLACED ON THE JUDGEMENT IN THE CASE OF ACIT VS. HOTEL BLUE MOON, 321 TTR 362 (SC). 7. 6 . COMING TO THE PROPOSITION AS TO WHETHER THE PROVISIONS OF S.292BB WOULD COME TO THE RESCUE OF THE REVENUE, WE FIND T HAT THE HON BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT - 2, LUCKNOW VS. SALARPUR COLD STORAGE (P) LTD. HAD AT PARA 13 HELD AS FOLLOWS. 13. IN OUR VIEW, WHERE THE ASSESSING OFFICER FAILS TO ISSUE A NOTICE WITHIN THE PERIOD OF SIX MONTHS AS SPELT OUT IN THE PROVISO TO CLAUSE (II) OF SECTION 143 (2) OF THE ACT, THE ASSUMPTION OF JURISDICTION UNDER SECTION 143(3) OF THE ACT WOULD BE INVALID. THIS DEFECT IN REGARD TO THE ASSUMPTION OF JURISDICTION CANNOT BE CURED BY TAKING RECOURSE TO THE DEEMING FICTION U NDER SECTION 292 BB OF THE ACT. THE FICTION IN SECTION 292 BB OF THE ACT OVERCOMES A PROCEDURAL DEFECT IN REGARD TO THE NON - SERVICE OF A NOTICE ON THE ASSESSEE, AND OBVIATES A CHALLENGE THAT THE NOTICE WAS EITHER NOT SERVED OR THAT IT WAS NOT SERVED IN TI ME OR THAT IT WAS SERVED IN AN IMPROPER MANNER, WHERE THE ASSESSEE HAS APPEARED IN A PROCEEDING OR CO OPERATED IN AN ENQUIRY WITHOUT RAISING AN OBJECTION. SECTION 292 BB OF THE ACT CANNOT COME TO THE AID OF THE REVENUE IN A SITUATION WHERE THE ISSUANCE O F A NOTICE ITSELF WAS NOT WITHIN THE PRESCRIBED PERIOD, IN WHICH EVENT THE QUESTION OF WHETHER IT WAS SERVED CORRECTLY OR OTHERWISE, WOULD BE OF NO RELEVANCE WHATSOEVER. FAILURE TO ISSUE A NOTICE WITHIN THE PRESCRIBED PERIOD WOULD RESULT IN THE AO ASSUMIN G JURISDICTION CONTRARY TO LAW. 7. 7 . IN VIEW OF THE ABOVE JUDGEMENTS OF THE HON BLE HIGH COURT, WE HAVE TO HOLD THAT, THE AO HAS WRONGLY ASSUMED JURISDICTION UNDER THE ACT. WE ALSO HOLD THAT, THIS DEFECT IN THE ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER CANNOT BE CURED BY TAKING RECOURSE TO THE DEEMING FICTION U/S 292 ITA NO. 1874/DEL/2012 C.O. NO.223/DEL/2012 (IN ITA 1874/DEL/12) A.Y.: 2008 - 09 SH. AJAY PAL SINGH, NEW DELHI 8 BB OF THE ACT. THUS WE DISMISS TH E CONTENTION S OF THE LD.D.R. AS DEVOID ON MERIT. 8 . BE IT AS IT MAY , THE SECOND ISSUE THAT COMES FOR OUR CONSIDERATION IS WHETHER THE FIRST APPELLATE AUTHORITY HAD ADMITTED ADDITIONAL EVIDENCE. IN OUR VIEW NO ADDITIONAL EVIDENCE HAS BEEN ADMITTED BY THE LD.CIT(A) IN THIS CASE . THE AO HAS TREATED THE ACCOUNT HELD BY THE ASSESSEE IN PUNJAB NATIONAL BANK AS THE SAVINGS BANK ACCOUNT AND WHEREAS IT WAS ACTUALLY A CURRE NT ACCOUNT. THIS WAS FACTUAL MISTAKE COMMITTED BY THE A.O. THE LD.CIT(A) HAS ALSO EXAMINED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND HAS OBSERVED THAT THE DEPOSITS IN THE CURRENT ACCOUNT IN THE BANK IS LESS THAN THE SALE FIGURE. 8.1 . THE FIRST APPELLATE AUTHORITY HAD AT PARA 4.2 HELD AS FOLLOWS. 4.2. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE A.R. IN PARA 2.0 I HAVE ALREADY GIVEN MY FINDINGS IN REGARD TO THE CONTENTION OF THE APPELLANT THAT NOTICES TO HIM WERE SENT BY THE AO AT THE WRONG ADDRESS. EVEN ON MERITS, IT IS SEEN THAT THE ACCOUNT WITH PUNJAB NATIONAL BANK, DEPOSITS IN WHICH HAVE BEEN TREATED AS UNEXPLAINED CASH CREDITS BY THE AO, IS ACTUALLY A CURRENT ACCOUNT OF THE APPELLANT AND NOT A SAVINGS BANK ACCOUNT. FROM THE P &L ACCOUNT IT IS OBSERVED THAT THE SALES DURING THE YEAR WERE TO THE TUNE OF RS.2,18,76,159/ - WHICH ARE MORE THAN THE DEPOSITS IN THE CURRENT ACCOUNT OF THE APPELLANT AND WHICH IS PART OF THE APPELLANT S BOOKS OF ACCOUNTS. IN VIEW OF THE FOREGOING DISCUSS ION, THE ADDITION TO INCOME MADE BY THE AO U/S 68 OF THE ACT IS DELETED. THESE GROUNDS OF APPEAL ARE ALLOWED. A PERUSAL OF THE ABOVE FINDING SHOWS THAT THE ASSESSEE HAD EXPLAINED THE DEPOSITS MADE IN ITS CURRENT ACCOUNT. THE SALES WERE DISCLOSED AND I T WAS THESE SALES THAT WERE APPEARING AS DEPOSITS IN THE BANK ACCOUNT. 8. 2 . LD.DR COULD NOT CONTROVERT THE FACTUAL FINDING OF THE LD.CIT(A). THUS WE UPHOLD THE SAME AND DISMISS THIS APPEAL BY THE REVENUE . WE ALLOW THE CROSS OBJECTION FILED BY THE ASSES SEE. ITA NO. 1874/DEL/2012 C.O. NO.223/DEL/2012 (IN ITA 1874/DEL/12) A.Y.: 2008 - 09 SH. AJAY PAL SINGH, NEW DELHI 9 9. IN THE RESULT, REVENUE S APPEAL STANDS DISMISSED AND ASSESSEE S CROSS OBJECTION IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2015. SD/ - SD/ - [ DIVA SINGH ] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DT. THE 30 TH JUNE, 2015 MANGA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES