The DCIT, 3(1), Indore V. Shri Ravi Pratap Singh Ranawat, Indore

ITA 202/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5674 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S SOLANKI
• Keywords: Business income
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO. 202/IND/2014 A.Y. : 2009-10 DCIT, 3(1), SHRI RAVI PRATAP SINGH RANAWAT, INDORE. VS INDORE. APPELLANT RESPONDENT PAN NO. ADXPR0553R APPELLANTS BY : SHRI R.A. VERMA, DR RESPONDENT BY : SHRI S. S. SOLANKI, CA O R D E R PER D.T.GARASIA, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-I, INDORE , DATED 09.12.2013 FOR THE ASS ESSMENT YEAR 2009-10. DATE OF HEARING : 17 . 0 3 .2016 DATE OF PRONOUNCEMENT : 17 . 0 3 .2016 DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 2 2 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUND, WHICH I S IDENTICAL AND READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) :- (I) ERRED IN QUASHING THE ASSESSMENT ORDER HOLDING THAT THE NOTICE U/S 143(2) OF THE ACT SELECTING THE CASE FOR SCRUTINY WAS NOT SERVED WHEREAS THE CASE WAS SELECTED THROUGH CASS AND NOTICE WAS GENERATED THROUGH COMPUTER SYSTEM AND SERVED ON THE SAME DAY I.E. 23/09.2010. (II) ERRED IN QUASHING THE ASSESSMENT ORDER ON THE BASIS OF NON-SERVICE OF NOTICE U/S 143(2) OF THE AC T WITHOUT APPRECIATING THE FACT THAT THE NOTICES ISSU ED ON 3./09.2010 AND THEREAFTER WERE DELIBERATELY RETURNED BACK WHEREAS THE NOTICE ISSUED BY THE LD. CIT(A) WAS PROMPTLY RECEIVED AND COMPLIED WITH THROUGH AR AND PLEADED BEFORE HIM OF NON-SERVICE OF STATUTORY NOTICE. (III) ERRED IN QUASHING THE ASSESSMENT ORDER ON THE BASIS OF NON-SERVICE OF NOTICE U/S 143(2) OF THE AC T DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 3 3 WITHOUT DELIBERATING THE VERY BASIC QUESTION AS TO HOW IT IS POSSIBLE THAT THE NOTICES ISSUED BY ONE AUTHORITY WERE RETURNED BACK UNSERVED AND AT THE SAME TIME THE NOTICE OF OTHER AUTHORITY I.E. THE LD . CIT(A) IS SERVED PROMPTLY ON THE SAME ADDRESS ? 3. FROM THE ORDER OF THE AO, IT WAS FOUND THAT T HE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND FIRST NOTI CE UNDER SECTION 143(2) WAS ISSUED ON 23-09-2000 AND THE DATE OF HEARING WAS FIXED ON 05-10-2010. NO ONE ATTENDED IN RESPONSE TO NOTICE OR ANY LETTER WAS FI LED BEFORE HIM. SUBSEQUENTLY, THE NOTICE UNDER SECTION 142(1) OF INCOME TAX ACT, 1961 WAS ISSUED ON 02-02- 2011 FIXING DATE OF COMPLIANCE AS 23-02-201L. NO ON E ATTENDED ON THE STIPULATED DATE ON 02-09-2011, THE CASE FOR AGAIN FIXED FOR HEARING ON 08-09-201L. THE NOTICE WAS PASTED AT THE ADDRESS ON RECORD. NO ONE ATTENDED THE CASE ON 08-09-2011. SHRI SAURABH SHRIVASTAVA, INCOME TAX INSPECTOR WAS SENT TO LOCAT E THE ABOVE ASSESSEE, WHO IN HIS REPORT DATED 04-11- DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 4 4 2011 SUBMITTED THAT THE ASSESSEE COULD NOT BE LOCATED. SO THE AO HAD NO OTHER OPTION BUT TO INVOK E PROVISIONS OF SECTION 144 OF THE INCOME-TAX ACT, 19 61. THE ASSESSEE WAS A CIVIL CONTRACTOR. IT WAS OBSERVE D BY THE ASSESSING OFFICER FROM THE RETURN OF THE ASSESSEE THAT THE GROSS RECEIPTS OF RS.2,83,94,797/ - IN AY 2009-10, THE ASSESSEE HAD ALSO CLAIMED THE EXPENSES OF RS. 2,26,34,181/-. IN THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE HAD OFFERED THE TOTAL INCOME OF RS.12,30,100/- OUT OF WHICH THE BUSINESS PROFIT WAS AT RS.12,06,685/-. AS NO DETAILS HAD BEE N SUBMITTED BY THE ASSESSEE EVEN AFTER REPEATED REQUESTS AND NOTICES, THE VARIOUS EXPENSES CLAIMED BY THE ASSESSEE IN HIS RETURN OF INCOME REMAINED UNVERIFIABLE. FURTHER, THE GROSS RECEIPT AS SHOWN B Y THE ASSESSEE IS UNVERIFIED. THEREFORE, THE INCOME O F THE ASSESSEE WAS BEING ESTIMATED BY CONSIDERING THE GROSS RECEIPTS RS.3,00,00,000/- AND THE NET PROFIT RATE AT 20%. THEREFORE, THE BUSINESS INCOME OF THE DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 5 5 ASSESSEE WAS ESTIMATED BY THE ASSESSING OFFICER U/S 144 AT RS. 60,00,000/-. 4. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE STATED THAT T HIS GROUND RELATES TO THE ESTIMATION OF BUSINESS INCOME AT RS.60,00,00O/- AS AGAINST INCOME OF RS.12,06,684/- OFFERED BY THE ASSESSEE. THE TURNOVE R OF THE ASSESSEE WAS RS.2.83 CORES AND THE ASSESSEE GETS HI S ACCOUNT AUDITED BY A CHARTERED ACCOUNTANT COPY OF W HICH IS ENCLOSED FOR YOUR REFERENCE. THE AO HAS NOT GIVEN A NY COMPARABLE CASE WHERE 20% NET PROFIT RATE HAS BEEN ACHIEVE. EVEN IF PROFIT IS ESTIMATED, THERE HAS TO BE REASONABLE AND RATIONAL BASIS. EVEN IN EX PARTE ASSESSMENT THE AO HAS TO TAKE DUE CARE TO JUSTIFY HIS ESTIMATION. WILD GUESS AND HUNCHES ARE NOT ALLOWED EVEN IN EX PARTE ASSESSMENT THE ADDITION SO MADE BEING ILLEGAL AND WRONG. THE SAME REQUIRE TO BE DELETED. 5. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS ALLOWED THIS APPEAL BY OBSERVING AS UNDER :- DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 6 6 4. I HAVE GONE THROUGH THE ASSESSMENT ORDER, THE GROUND OF APPEAL AND SUBMISSION OF APPELLANT. THE FIRST GROUND OF APPEAL IS AGAINST NOT SERVICE O F NOTICE U/S 143(2) AND 142(1) OF I.T. ACT AND HENCE IT WAS THEIR CONTENTION THAT WITHOUT SERVICE OF STATUTORY NOTICE, ASSESSMENT ORDER PASSED IS ILLEGAL AND WRONG AND THE SAME SHOULD BE QUASHED. THIS GROUND WAS SENT TO AO FOR COMMENTS. AO (ACIT 3(1), INDORE) REPLIED FOLLOWS ;- 'IN THIS CONNECTION, IT IS SUBMITTED THAT NOTICE U/ S 143(2) DATED 23-09-2010 IS AVAILABLE IN ASSESSMENT FOLDER. THE COPY OF THE NOTICE IS ENCLOSED HEREWITH FOR YOUR REFERENCE' THIS REPLY OF AO WAS FORWARDED TO APPELLANT. ON RECEIPT OF THE SAME APPELLANT FILED A REPLY ON 15- DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 7 7 10-2013 RAISING FOLLOWING OBJECTION :- THAT WE HAVE RAISED GROUND NO1 IN APPEAL THAT THE NOTICE OF U/S 143(2) WAS NOT PROPERLY SERVED ON TO THE ASSESSEE THAT PROPER SERVICE OF NOTICE U/S 143(2) IS MANDATORY REQUIREMENT REMAND REPORT WAS SOUGHT FROM THE AO REGARDING THIS. THAT WE ARE IN RECEIPT OF REMAND REPORT SENT BY THE AO. THE AO HAS SENT COPY OF NOTICE U/S 143(2) DATE 23-09- 201. NOTHING ELSE HAS EITHER BEEN FURNISHED OR PRODUCED. IN THIS REGARD WE HAVE BEEN DIRECTED BY THE ASSESSEE HAVE TO SUBMIT AS UNDER :- THAT THE AO HAS NOT GIVEN ANY EVIDENCE THAT THE NOTICE WAS SERVED UPON THE ASSESSEE. HE HAS SIMPLY GIVEN PHOTOCOPY OF THE NOTICE U/S 143(2). NOWHERE IT WAS BEEN MENTIONED THAT THE ASSESSEE HAS RECEIVED THE NOTICE U/S 14302). THAT A POSITIVE EVIDENCE REGARDING SERVICE OF NOTICE HAS TO BE GIVEN BY THE AO I.E. A NOTICE DULY RECEIVED BY THE ASSESSEE AND DULY ACKNOWLEDGED BY HIM. SIMPL Y DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 8 8 SENDING A COPY OF NOTICE NOT ACKNOWLEDGED BY THE ASSESSEE IS NOT AN EVIDENCE REGARDING SERVICE. FURTHER THE ADDRESS OF THE ASSESSEE AS MENTIONED IN RETURN FOR THE AY 200910 FILED ON 29-09-2009 VIDE ACKNOWLEDGMENT NO. 94579230290909 IS 114, BAKHATGARH TOWER, INDORE. IT IS INTERESTING TO NOTE THAT THE ORDER U/S 271(1)(C) FOR THE A. Y. 2009-10 WAS SENT THAT ADDRESS WHICH WAS DULY SERVED ON TO THE ASSESSEE. WHEN THE ORDER U/S 271(1)(C) CAN BE SERVED UPON THE ASSESSEE AT THE ADDRESS GIVEN IN THE RETURN FILED B Y THE ASSESSEE, WHAT PREVENTED THE AO FROM SENDING NOTICE U/S 143(2) AT THE ADDRESS MENTIONED IN THE RETURN. COPY OF ACKNOWLEDGEMENT IS ENCLOSED. FURTHER THE RESIDENTIAL ADDRESS OF THE ASSESSEE IS 201, ROYAL GARDEN 2013, NEW PALASIA, INDORE. THE NOTICE WAS NOT EVEN PROPERLY ADDRESSED. THAT THE AO HAS NOT NEGATED THE ALLEGATION OF THE DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 9 9 ASSESSEE THAT PROPER NOTICE WAS NOT SERVED UPON THE ASSESSEE. THAT THE AO IS DUTY BOUND TO PROVE THAT:- (I) NOTICE U/S 143(2) WAS ISSUED. (II) IT WAS ISSUED AT A PROPER ADDRESS & (III) THE NOTICE WAS DULY RECEIVED BY THE ASSE SSEE. IN OUR CASE, THE CONDITION MENTIONED ABOVE HAVE NOT BEEN SATISFIED BY THE AO. IN VIEW OF SUBMISSIONS MADE ABOVE. WE HEREBY STATE THAT SINCE THE AO HAS NOT PROVED THAT THE NOTICE WAS SERVED UPON THE NOTICE WAS SERV ED UPON THE ASSESSEE, WHICH IS A MANDATORY REQUIREMENT OF LAW, WE REQUEST YOUR HONOUR TO QUASH THE ASSESSMENT PROCEEDINGS AND OBLIGE. 8 . THIS LETTER WAS AGAIN SENT TO AO. BUT AO COULD NOT ADDUCE ANY PROOF OF SERVICE OF STATUTORY NOTICE U/S 143(2) OF LT. ACT. INSTEAD OF FURNISHING ANY REPLY ON THIS ISSUE AGAINST VARIOUS OBJECTION RAISED BY APPELLANT, AO SIMPLY FORWARDED THE DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 10 10 CASE RECORD. ON PERUSAL OF CASE RECORD, I COULD NOT FIND ANY PROOF OF SERVICE OF NOTICE BUT DID FIND A LETTER OF THE INSPECTOR DATED 04-11-2011 STATING THAT HE IS UNABLE TO TRACE THE APPELLANT. FROM THESE FACTS IT IS CLEAR THAT NOTICE U/S 143(2) WAS NOT SERVED & HENCE WITHOUT SERVICE OF STATUTORY NOTICE & WITHOUT ANY PROOF OF SENDING SUCH NOTICE THROUGH REGISTERED POST TO THE LAST KNOWN ADDRESS OF APPELLANT, THE ASSESSMENT ORDER PASSED U/S 144 OF INCOME-TAX ACT, 1961, COULD NOT BE SUSTAINED. AS A RESULT GROUND NO.1 OF APPEAL IS ALLOWED. SINCE THE ASSESSMENT IS QUASHED ON LEGAL GROUND RAISED BY APPELLANT, THE GROUND NO.2 ON MERITS OF THE CASE HAS BECOME INFRACTUOUS. 9. AS A RESULT APPEAL IS ALLOWED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE NOTICE OF U/S 143(2) WAS NOT PROPERLY SERVED ON TO THE ASSESSEE THAT PROPER SERVICE OF NO TICE U/S DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 11 11 143(2) IS MANDATORY REQUIREMENT AND THE REMAND REPO RT WAS SOUGHT FROM THE AO. THE ASSESSEE WAS IN RECEIPT OF REMAND REPORT SENT BY THE AO. THE AO HAS SENT COPY OF NOTI CE U/S 143(2) DATE 23-09-2010. THE AO HAS NOT GIVEN ANY EV IDENCE THAT THE NOTICE WAS SERVED UPON THE ASSESSEE. HE HA S SIMPLY GIVEN PHOTOCOPY OF THE NOTICE U/S 143(2). NOWHERE IT WAS BEING MENTIONED THAT THE ASSESSEE HAS RECEIVED THE NOTICE U/S 143(2). WE FOUND THAT A POSITIVE EVIDENCE REGARDING SERVICE OF NOTICE HAS TO BE GIVEN BY THE AO AND A NOTICE DULY RECEIVED BY THE ASSESSEE AND DULY ACKNOWLEDGED BY HIM IS NOT AN EVIDENCE REGARDING SERVICE. WE FOUND THAT THE ADDRESS OF THE ASSESSEE WAS MENTIONED IN RETURN FOR THE AY 200910 FILED O N 29-09- 2009 VIDE ACKNOWLEDGMENT NO. 94579230290909 IS 114, BAKHATGARH TOWER, INDORE AND THE ORDER U/S 271(1)(C) FOR THE A. Y. 2009-10 WAS SENT ON THAT ADDRESS WAS DULY SE RVED ON TO THE ASSESSEE. WHEN THE ORDER U/S 271(1)(C) CAN BE S ERVED UPON THE ASSESSEE AT THE ADDRESS GIVEN IN THE RETURN FIL ED BY THE ASSESSEE, WHY THE AO DID NOT SEND THE NOTICE U/S 14 3(2) AT THE ADDRESS MENTIONED IN THE RETURN. WE FOUND THAT THE RESIDENTIAL ADDRESS OF THE ASSESSEE IS 201, ROYAL GARDEN 2013, NEW DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 12 12 PALASIA, INDORE. THE NOTICE WAS NOT EVEN PROPERLY A DDRESSED. THE AO HAS NOT NEGATED THE ALLEGATION OF THE ASSESSEE THAT PROPER NOTICE WAS NOT SERVED UPON THE ASSESSEE. THE AO IS DUTY BOUND TO PROVE THAT THE NOTICE U/S 143(2) WAS ISSUED. IT WAS ISSUED AT A PROPER ADDRESS. THE NOTICE WAS DULY RECEIVED BY THE ASSESSEE. WE UPHOLD THE ACTION OF THE LD. CI T(A) IN ALLOWING THE APPEAL OF THE ASSESSEE BY QUASHING THE ASSESSMENT ORDER PASSED U/S 144 OF THE INCOME-TAX A CT, 1961. HENCE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). OUR INTERFERENCE IS NOT CALLED FOR. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 17 TH MARCH, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 17 TH MARCH, 2016. CPU* DCIT,3(1), INDORE, VS. SHRI RAVI PRATAP SINGH RANAW AT,INDORE, I.T.A.NO. 202/IND/2014 13 13