J.K.V.B. Properties Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 2349/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5824 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 19-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C P SINGH
• Keywords: Business income
• Section: 143(3); 143(1); 143(2); 72; 13; 153; 147; 148; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D, NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI G.S. PANNU, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.2349/DEL/2017 (ASSESSMENT YEAR-2012-13) M/S. J.K.V.B PROPERTIES PVT. LTD. 11/2A, PUSA ROAD NEW DELHI-110005 PAN:AABCJ 2028H VS. DY. CIT CIRCLE-13(1), NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. SALIL AGGARWAL, ADV. & MR. SHAILESH GUPTA, CA RESPONDENT BY SH. C.P.SINGH, SR. DR DATE OF HEARING 14.08.2020 DATE OF PRONOUNCEMENT 30.09.2020 ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 14.03.2017 PASSED BY THE LD. COMMISSIONER OF INCOM E TAX (APPEALS)-5, NEW DELHI {CIT (A)} FOR THE ASSESSMENT YEAR 2012-13. 2.0 THE BRIEF FACTS ARE THAT ASSESSEE COMPANY IS A PRIVATE LIMITED COMPANY AND IS IN THE BUSINESS OF REAL ESTA TE. RETURN OF 2 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FILED BY ASSESSEE COMPANY WHEREIN THE TAXABLE INCOME WAS DECLA RED AT RS. 2,96,34, 780/-. ASSESSMENT IN THIS CASE WAS COMPLET ED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINA FTER CALLED THE ACT) WHEREIN THE INCOME WAS ASSESSED BY THE ASSESSIN G OFFICER (AO) AT RS. 3,53,02,460/- AFTER MAKING CERTAIN ADDITIONS AND DISALLOWANCES. 2.1 AGGRIEVED, T HE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A) WHO DISMISSED THE APPEAL OF THE ASSESSEE VIDE OR DER DATED 14.03.2017 AND AGAINST THE SAID ORDER OF LEARNED CI T (A), AN APPEAL IS NOW BEING PREFERRED BY THE ASSESSEE COMPANY BEFOR E THIS TRIBUNAL. THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED LOWER AUTHORITIES HAS GROSSLY ERRED IN LAW AND ON FACTS IN PASSING AND IN CONFIRMING THE ORDER U/S 143(3) OF T HE ACT BY IGNORING THE FACT THAT THE FIRST NOTICE U/S 143(2) OF THE AC T WAS NOT SERVED UPON THE ASSESSEE WITHIN THE TIME LIMIT PRESCRIBED UNDER THE ACT. I.E. ON OR BEFORE 30 TH SEPTEMBER 2013 AS SUCH THE ASSESSMENT PROCEEDINGS WERE ILLEGAL. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LEARNED ASSESSING OFFICER HAS GROSSLY ERRED IN LAW AND ON FACTS IN ENHANCING THE INCOME FROM HOUSE PROPERTY BY RS. 35, 94,903/- *BY HOLDING THAT IN THE COMPUTATION OF TOTAL INCOME THE RENT CONSIDERED SEPARATELY FOR CALCULATING PROPERTY INCOME WAS SHOW N AT RS. 4,79,31,859/- HOWEVER WHILE CALCULATING INCOME FROM HOUSE PROPERTY 3 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT THE RENTAL INCOME IS CONSIDERED TO BE 4,27,96,283 A ND THE ASSESSEE WAS ASKED TO CLARIFY THE REASON FOR SUCH DIFFERENCE HOWEVER NO SATISFACTORY REPLY WAS GIVEN. THE LEARNED CIT (A) HAS ALSO GROSSLY ERRED IN LAW A ND ON FACTS IN CONFIRMING THE ADDITION BY IGNORING THE FACT THAT T HE ASSESSING OFFICER HAS NEITHER RAISED ANY QUERY TO THIS EFFECT NOR ANY CLARIFICATION WAS SOUGHT TO THIS EFFECT NOR ANY SHOW CAUSE NOTICE WAS ISSUED BY THE ASSESSING OFFICER BEFORE ENHANCING THE INCOME. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED ASSESSING OFFICER HAS GROSSLY ERRED IN LAW AND ON FACTS BY IGNORING THE FACT THAT THE EXPENSES AMOUNTING TO RS . 55,96,453/- INCURRED TO EARN THE GROSS RENT WERE CLEARLY SHOWN IN THE COMPUTATION OF INCOME AS EXPENSES CONSIDERED SEPARATELY AND WER E DEDUCTED FROM THE GROSS RENT RECEIVED WHILE COMPUTING THE IN COME FROM HOUSE PROPERTY WHICH WAS THE BASIC REASON FOR THE FACT TH AT THE RENT CONSIDERED SEPARATELY FOR CALCULATING PROPERTY INCO ME WAS SHOWN AT RS. 4,79,31,859/- HOWEVER WHILE CALCULATING INCOME FROM HOUSE PROPERTY THE RENTAL INCOME WAS CONSIDERED TO BE 4,2 7,96,283. THE LEARNED LOWER AUTHORITIES GROSSLY ERRED IN LAW AND ON FACTS IN NOT ALLOWING THESE EXPENSES AS DEDUCTION FROM THE GROSS RENT RECEIVED TO DETERMINE THE ANNUAL LETTING VALUE OF THE PROPERTY. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LEARNED CIT (A) ERRED IN NOT CONSIDERING THE DECISI ON OF THE HONBLE DELHI TRIBUNAL IN THE CASE OF DCIT V/S TEXACO OVERS EAS PVT. LTD. ITA NO. 4050/DEL/2009 AND IN THE CASE OF TEXACO OVERSEA S PVT. LTD. V/S ACIT, ITA NO. 5007/DEL/2014 WHEREIN IT WAS HELD THA T THE EXPENSES INCURRED TO EARN THE GROSS RENT WERE DEDUC TIBLE FROM THE GROSS RENT RECEIVED TO DETERMINE THE ALV. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LEARNED LOWER AUTHORITIES HAS GROSSLY ERRED IN LAW AND ON FACTS IN HOLDING THAT THERE WAS NO BUSINESS ACTIVITY DURING THE YEAR UNDER CONSIDERATION. 4 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED LOWER AUTHORITIES HAS GROSSLY ERRED IN LAW AND ON FACTS IN HOLDING THAT THE INTEREST INCOME AMOUNTING TO RS. 2 0,73,047/- WAS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF INCOME FROM BUSINESS BY IGNORING THE VARIOUS FACTS AND EVIDENCES ETC. ON RECORD. THE LEARNED CIT (A) FURTHER ERRED IN LAW AND ON FAC TS BY IGNORING THE FACT THAT THE ASSESSING OFFICER HAS NEITHER RAISED ANY QUERY TO THIS EFFECT NOR ANY CLARIFICATION WAS SOUGHT NOR ANY SHO W CAUSE NOTICE WAS ISSUED NOR ANY REASONS WERE GIVEN BY THE ASSESS ING OFFICER FOR ASSESSING THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF INCOME FROM BUSINESS. 7. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED CIT (A) ERRED IN NOT CONSIDERING THE DECISI ON OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SNAM PROGETTI S.P.A . VS. ADDITIONAL COMMISSIONER OF INCOME TAX, NEW DELHI 132 ITR 70 (D EL) WHERE IN IT WAS HELD THAT INTEREST EARNED FROM BANK DEPOSIT WAS BUSINESS INCOME AND FURTHER IT WAS CATEGORICALLY HELD THE IN TEREST FROM BANK DEPOSIT WAS ALSO A BUSINESS INCOME FOR THE PURPOSE OF SET OFF AND COULD NOT BE REFUSED EVEN IF INTEREST INCOME IS TAX ED UNDER A SEPARATE HEAD. 8. WHETHER ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE THE LEARNED LOWER AUTHORITIES HAS GROSSLY ERRED IN LAW AND ON FACTS IN WITHDRAWING THE CLAIM OF SET OFF OF BROUGHT FORWARD BUSINESS LOSSES AMOUNTING TO RS. 20,55,105/- AS CLAIMED U/S 72 OF T HE INCOME TAX ACT. 9. WHETHER ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE THE ASSESSMENT WAS TIME BARRED AS THE ASSESSMENT ORDER WAS DISPATCHED ON 08/04/2015 AND WAS SERVED UPON THE AS SESSEE ON 09/04/2015 THAT IS AFTER THE ASSESSMENT HAS BECOME TIME BARRED ON 31/03/2015. 5 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT 10. WHETHER ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE THE ASSESSMENT ORDER WAS MADE AFTER THE TIME LIMIT PRES CRIBED U/S 153 OF THE ACT. 11. WHETHER ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE THE LEARNED ASSESSING OFFICER HAS GROSSLY ERRE D IN LAW AND ON FACTS IN MAKING THE ABOVE ADDITION IN DEFIANCE OF T HE INSTRUCTIONS ISSUED BY THE CBDT BY WITHOUT OBTAINING THE APPROVA L OF PRINCIPAL COMMISSIONER OF INCOME TAX BEFORE MAKING THE ABOVE ADDITIONS. 12. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AME ND OR FORGO ANY OF THE GROUNDS OF APPEAL. 3.0 AT THE OUTSET, THE LD. AUTHORISED REPRESENATAT IVE (AR) SUBMITTED THAT THE ASSESSEE WAS CHALLENGING THE ASS UMPTION OF JURISDICTION TO FRAME THE IMPUGNED ASSESSMENT AS NO TICE UNDER SECTION 143(2) OF THE ACT WAS NOT CORRECTLY ISSUED A ND SERVED ON THE ASSESSEE COMPANY WITHIN THE PRESCRIBED TIME LIMIT AS PRESCRIBED UNDER THE INCOME TAX ACT, ALONG WITH OTHER GROUNDS O F APPEAL AS STATED IN THE MEMO OF APPEAL SO FILED WITH THE TRIBU NAL. IT WAS SUBMITTED THAT GROUND NO. 1 RAISED BY ASSESSEE IS A LEGAL GROUND WHICH GOES DIRECTLY TO THE ROOT OF THE MATTER, AS SU CH, THE SAME IS BEING TAKEN UP FIRST. THE LD. AR ARGUED THAT THAT I N THE INSTANT CASE, THE RETURN OF INCOME WAS FILED BY THE ASSESSEE COMPANY ON 27.09.2012 (PLACED AT PAGE 1 OF THE PAPER BOOK) WHER EIN THE 6 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT ADDRESS OF THE ASSESSEE WAS MENTIONED AS 11/2A, PUSA ROAD, KAROL BAGH, NEW DELHI 110005. THAT FURTHER, IT WAS ALSO S UBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT VIDE LETTER D ATED 06.06.2008, THE ASSESSEE COMPANY HAD DULY INTIMATED TO THE ASSE SSING OFFICER (AO) REGARDING THE SAID NEW ADDRESS OF THE ASSESSEE. THE SAID LETTER WAS REFERRED TO AND IS PLACED AT PAGE 44 OF THE PAPE R BOOK SO FILED BY THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE F URTHER, ARGUED THAT RIGHT FROM ASSESSMENT YEAR (AY) 2008-09 ONWARDS , THE ASSESSEE HAD BEEN FILING ITS RETURN OF INCOME AT IT S NEW ADDRESS I.E. 11/2A, PUSA ROAD, KAROL BAGH, NEW DELHI 110005. IT WAS FURTHER, ARGUED BY THE LEARNED COUNSEL THAT EVEN THE REVENUE IN AY 2009-10 HAD, WHILE PROCESSING THE RETURN OF INCOME UNDER SEC TION 143(1) OF THE ACT, ISSUED THE SAME AT THE NEW ADDRESS (PLACED AT PAGE 45 OF THE PAPER BOOK). THUS, IT WAS ARGUED BY THE LEARNED COUNSEL OF ASSESSEE THAT THE REVENUE WAS AWARE ABOUT THE NEW AD DRESS OF THE ASSESSEE BUT STILL THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 23.09.2013 AT THE OLD ADDRESS I.E. A 46 , IIND FLOOR, VASANT MARG, VASANT VIHAR, NEW DELHI (PLACED AT PAGE 78A OF THE PAPER BOOK), WHICH WAS NEVER SERVED ON THE ASSESSEE. IT WAS FURTHER 7 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT SUBMITTED THAT, HOWEVER, THE AO, IN THE REMAND REPO RT DATED 17.01.2017 FURNISHED BEFORE LEARNED CIT (A), HAD SU BMITTED THAT THE SAID NOTICE WAS PERSONALLY SERVED ON THE ASSESS EE COMPANY. IN THIS REGARD, THE LEARNED COUNSEL FOR THE ASSESSEE F URTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT ENCLOSED THE REP ORT OF THE PROCESS SERVER TO SUPPORT THE FACT THAT THE NOTICE WAS SERV ED PERSONALLY THROUGH THE PROCESS SERVER. IT WAS FURTHER SUBMITTED THAT ALSO THE NAME MENTIONED ON THE SAID NOTICE IS NOT PERTAINING TO THE ASSESSEE NOR THE TELEPHONE NUMBERS SO MENTIONED IN THE SAID NOTICE BELONG TO THE ASSESSEE COMPANY. IT WAS FURTHER ARGUED BY TH E LEARNED COUNSEL OF THE ASSESSEE THAT EVEN IF FOR A MOMENT WE ACCEPT THE CONTENTION OF THE AO THAT NOTICE DATED 23.09.2013 WA S SERVED PERSONALLY AT THE NEW ADDRESS, THEN WHY WERE SUBSEQU ENT NOTICES DATED 20.10.2014 AND 18.11.2014 AGAIN ISSUED AT TH E OLD ADDRESS? (PLACED AT PAGES 3 AND 4 OF THE PAPER BOOK) IT WAS T HE ARGUMENT OF THE LEARNED AR THAT ONCE THE REVENUE WAS AWARE OF TH E NEW ADDRESS, AS PER THE ALLEGATION OF THE AO THAT NOTIC E DATED 23.09.2013 WAS PERSONALLY SERVED AT NEW ADDRESS, THEN WHY WERE SUBSEQUENT NOTICES AGAIN ISSUED AT OLD ADDRESS? IT WAS FURTHER 8 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT SUBMITTED BY THE LD. AR THAT EVEN THE NOTICE DATED 18.11.2014 WAS SERVED ON THE COUNSEL OF THE ASSESSEE ON 17.02.2015 WHEN HE HAD PERSONALLY VISITED THE OFFICE OF THE ASSESSING OFFI CER AND COMPLIANCE WAS MADE THEREAFTER, BY THE ASSESSEE. 3.1 THE LEARNED COUNSEL FOR ASSESSEE FURTHER DREW O UR ATTENTION TO PAGES 1 AND 2 OF THE ASSESSMENT ORDER WHEREIN, IN RESPONSE TO A SPECIFIC OBJECTION FILED BY THE ASSES SEE, IT WAS MENTIONED BY THE AO THAT NOTICE UNDER SECTION 143(2 ) OF THE ACT DATED 23.09.2013 WAS SERVED ON ASSESSEE THROUGH SPEE D POST. IT WAS SUBMITTED THAT, THUS, THE FINDING SO RECORDED BY THE AO AND THE OBSERVATION OF THE AO IN THE REMAND REPORT WERE CONTRARY AND FORTIFIED THE ARGUMENT OF ASSESSEE THAT THERE IS NO PROOF WITH THE DEPARTMENT REGARDING SERVICE OF NOTICE UNDER SECTIO N 143(2) DATED 23.09.2013 ON THE ASSESSEE. IN SUPPORT OF THE AFOR ESAID ARGUMENTS, RELIANCE WAS PLACED ON THE FOLLOWING JUDGMENTS: 1. CIT V. HOTLINE INTERNATIONAL (P.) LTD. (DELHI HC) REPORTED IN 296 ITR 333. 2. CIT VS CHETAN GUPTA (DELHI HC) REPORTED IN 382 ITR 613. 9 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT 3. PCIT VS ATLANTA CAPITAL PVT. LTD. (DELHI HC) IN ITA NO. 665/2015. 4.0 THE LD. SR. DR PLACED HEAVY RELIANCE ON THE OR DER OF THE AO AND THE LD. CIT (A) AND ARGUED THAT THE NOTICE U NDER SECTION 143(2) OF THE ACT HAD BEEN SERVED ON THE ASSESSEE A S PER THE REMAND REPORT AND, THUS, THIS ARGUMENT OF THE ASSES SEE NEEDS TO BE DISCARDED AND APPEAL OF THE ASSESSEE COMPANY BE HEA RD ON MERITS. 5.0 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL ON RECORD. ADMITTEDLY, GROUND NO. 1 IS A L EGAL GROUND WHICH GOES DIRECTLY TO THE ROOT OF THE MATTER AND TH E SAME IS BEING TAKEN UP FIRST. IT IS CHALLENGING THE VALIDITY OF T HE ASSESSMENT AS NOTICE UNDER SECTION 143(2) OF THE ACT WAS NOT SERV ED ON THE ASSESSEE COMPANY WITHIN THE STIPULATED TIME PRESCRIB ED UNDER THE INCOME TAX ACT, 1961. ON GOING THROUGH THE PAPER BO OK FILED BY THE ASSESSEE COMPANY, IT BECOMES EVIDENT THAT THE RETUR N OF INCOME WAS FILED BY THE ASSESSEE COMPANY ON 27.09.2012 (PLA CED AT PAGE 1 OF THE PAPER BOOK) WHEREIN THE ADDRESS OF THE ASSESS EE IS MENTIONED AS 11/2A, PUSA ROAD, KAROL BAGH, NEW DELHI 110005. FURTHER, IT 10 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT IS UNCONTROVERTED THAT THE ASSESSEE HAD, VIDE LETTE R DATED 06.06.2008, INTIMATED THE AO, REGARDING THE SAID NE W ADDRESS OF THE ASSESSEE. THE SAID LETTER WAS REFERRED TO AND IS PLACED AT PAGE 44 OF THE PAPER BOOK. ON FURTHER GOING THROUGH THE PAPER BOOK, IT IS SEEN THAT FROM AY 2008-09 ONWARDS, THE ASSESSEE HAD BEEN FILING ITS RETURN OF INCOME AT THE NEW ADDRESS I.E. 11/2A, PUSA ROAD, KAROL BAGH, NEW DELHI 110005 AND THAT EVEN THE REV ENUE, IN AY 2009-10, HAD PROCESSED THE RETURN OF INCOME UNDER S ECTION 143(1) OF THE ACT AT THE NEW ADDRESS (PLACED AT PAGE 45 OF THE PAPER BOOK). THUS, IT IS CLEAR THAT THE REVENUE WAS AWARE ABOUT TH E NEW ADDRESS OF THE ASSESSEE PRIOR TO THE ISSUANCE OF NOTICE UND ER SECTION 143(2) OF THE ACT IN THE INSTANT CASE. THUS, ONCE IT IS CL EAR THAT THE REVENUE WAS AWARE ABOUT THE NEW ADDRESS OF THE ASSESS EE, WE FAIL TO APPRECIATE AS TO WHY THEN THE NOTICE UNDER SECTIO N 143(2) OF THE ACT WAS ISSUED ON 23.09.2013 AT THE OLD ADDRESS I.E. A 46, IIND FLOOR, VASANT MARG, VASANT VIHAR, NEW DELHI (PLACED AT PAGE 78A OF THE PAPER BOOK)? THIS QUESTION WAS PUT TO THE LEARN ED SR. DR BY THE BENCH BUT HE WAS NOT ABLE TO PROVIDE ANY SATISFA CTORY REPLY TO OUR QUESTION. THUS, WE HAVE NO HESITATION IN HOLDIN G THAT THE NOTICE 11 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT UNDER SECTION 143(2) OF THE ACT ISSUED AT THE OLD A DDRESS OF THE ASSESSEE COMPANY IS VOID AB INITIO AS IT WAS ISSUED AT THE OLD ADDRESS EVEN THOUGH THE AO WAS MADE AWARE OF THE NEW A DDRESS OF THE ASSESSEE. IN THIS REGARD, WE PLACE RELIANCE ON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN T HE CASE OF PCIT VS. ATLANTA CAPITAL PVT. LTD. IN ITA NO. 665/2015, WHERE IN, ON IDENTICAL FACTS, IT HAS BEEN HELD AS FOLLOWS: 7. ON THE FACTS OF THE PRESENT CASE, IT IS SEEN TH AT NOTICE DATED 27TH MARCH 2008 UNDER SECTION 148 OF THE ACT WAS IS SUED TO THE ASSESSEE BY THE ASSESSING OFFICER (AO) AT THE ADDRESS AT B-231, OKHLA INDUSTRIAL AREA, PHASE-I, NEW DELHI. A DMITTEDLY, THE ASSESSEE HAD SHIFTED FROM THAT ADDRESS WITH EFF ECT FROM 1ST FEBRUARY 2005 TO A NEW ADDRESS AT B-115, SARVODAYA ENCLAVE, NEW DELHI. FOR AY 2005-06 AND THE SUBSEQUENT AYS, T HE ASSESSEE DISCLOSED HIS ADDRESS AS B-115, SARVODAYA ENCLAVE, NEW DELHI. EVEN THE AO HAD SENT LETTERS TO THE ASSE SSEE AT THE SAME ADDRESS ON 8TH AUGUST 2007. THE INTIMATION UND ER SECTION 143(1) OF THE ACT DATED 25TH JANUARY 2008 F OR AY 2006- 07 WAS ALSO SENT BY THE AO TO THE ASSESSEE AT THE S AME CHANGED ADDRESS I.E. B-115, SARVODAYA ENCLAVE, NEW DELHI. THERE IS NOTHING TO SHOW THAT THE NOTICE UNDER SECT ION 148 OF 12 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT THE ACT WAS IN FACT ISSUED BY THE AO SHOWING THE AFOREMENTIONED CHANGED ADDRESS. 8. IT IS THE CONTENTION OF MR. N.P. SAHNI, LEARNED SENIOR STANDING COUNSEL FOR THE REVENUE, THAT THE NOTICE SATISFIED THE REQUIREMENT AS TO LIMITATION UNDER SECTION 149 (B) OF THE ACT. HOWEVER, AS NOTED BY THE ITAT, THE NOTICE ITSELF WA S NOT ISSUED AT THE CORRECT ADDRESS. THE FACT THAT THE SAID NOTI CE, SENT BY SPEED POST, WAS NOT RETURNED UNSERVED, WOULD BE TO NO AVAIL SINCE THE ADDRESS GIVEN IN THE NOTICE WAS NOT THE L AST KNOWN ADDRESS OF THE ASSESSEE. 9. MR. SAHNI THEN SUBMITTE D THAT IT WAS INCUMBENT ON THE ASSESSEE TO HAVE GOT HIS CHANG ED ADDRESS ENTERED IN THE PAN DATA BASE FAILING WHICH THE AO WOULD ONLY GO BY THE ADDRESS GIVEN IN THE RECORD OF THE RELEVANT AY WHICH IN THE CASE IS AY 2001-02. 10. THE COURT IS UNABLE TO AGREE WITH THIS SUBMISSI ON. NO PROVISION IN THE ACT HAS BEEN SHOWN TO THE COURT WH ICH OBLIGES THE ASSESSEE TO ENSURE THAT HIS CHANGED ADDRESS IS ENTERED IN THE PAN DATA BASE FAILING WHICH HE IS PRECLUDED FRO M INSISTING ON THE NOTICE UNDER SECTION 148 BEING ISSUED TO HIM AT THE KNOWN ADDRESS AND BEING SERVED UPON HIM. IN THE PRE SENT CASE, ON FACTS, IT IS NOT IN DISPUTE THAT THE AO WAS AWAR E OF THE CHANGE OF ADDRESS OF THE ASSESSEE AND YET THE NOTIC E UNDER SECTION 148 OF THE ACT WAS ISSUED AT THE OLDER ADDR ESS. 11. MR. SAHNI SUBMITTED THAT THE ORDER OF THE CIT ( A) NOTES THE FACT THAT A PHOTOCOPY OF THE NOTICE WAS GIVEN TO TH E ASSESSEE 13 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT DURING THE RE-ASSESSMENT PROCEEDINGS AND THAT BY IT SELF SHOULD CONSTITUTE SUFFICIENT SERVICE OF NOTICE ON THE ASSE SSEE. IN LIGHT OF THE LAW EXPLAINED BY THE SUPREME COURT IN R.K. UPAD HYAYA V. SHANBHAI P. PATEL (1987) 3 SCC 96 WHICH HAS IN TURN BEEN FOLLOWED BY THIS COURT IN CHETAN GUPTA (SUPRA), THE REQUIREMENT OF BOTH THE ISSUANCE AND THE SERVICE OF SUCH UPON T HE ASSESSEE FOR THE PURPOSES OF SECTION 147 AND 148 OF THE ACT ARE MANDATORY JURISDICTIONAL REQUIREMENTS. THE MERE FACT THAT AN ASSESSEE PARTICIPATED IN THE RE- ASSESSMENT PROCEEDINGS DESPITE NOT HAVING BEEN ISSU ED OR SERVED WITH THE NOTICE UNDER SECTION 148 OF THE ACT IN ACCORDANCE WITH LAW WILL NOT CONSTITUTE A WAIVER OF THE SAID JURISDICTIONAL REQUIREMENT. 12. ON FACTS, THEREFORE, THE COURT FINDS NO LEGAL E RROR COMMITTED BY THE ITAT IN HOLDING THAT THERE WAS NO PROPER SER VICE OF NOTICE ON THE ASSESSEE UNDER SECTION 148 OF THE ACT. 5.1 WE HAVE ALSO GONE THROUGH THE REMAND REPORT DA TED 17.01.2017 FURNISHED BY THE AO BEFORE THE LEARNED C IT (A), WHEREIN, HE HAD SUBMITTED THAT THE SAID NOTICE WAS PERSONALLY SERVED ON THE ASSESSEE COMPANY. IN THIS REGARD, THE BENCH ENQUIRE D FROM THE LEARNED SR. DR, AS TO WHETHER THERE IS ANY PROCESS S ERVERS REPORT TO 14 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT SUPPORT THE FACT THAT THE NOTICE WAS SERVED PERSONA LLY THROUGH THE PROCESS SERVER, TO WHICHTHE LEARNED SR. DR ANSWERED I N NEGATIVE. 5.2 ON FURTHER GOING THROUGH THE SAID NOTICE, IT IS SEEN THAT THERE IS NEITHER ANY SEAL/STAMP OF THE COMPANY NOR IT IS SIGNED BY ANY REPRESENTATIVE OF THE ASSESSEE COMPANY NOR ANY TIME OF SERVICE IS MENTIONED IN THE SAID NOTICE. IT IS FURTHER WORT HWHILE TO PONDER OVER THE QUESTION THAT, EVEN IF FOR A MOMENT, WE ACC EPT THE CONTENTION OF THE AO THAT THE NOTICE DATED 23.09.20 13 WAS SERVED PERSONALLY AT THE NEW ADDRESS, THEN WHY WERE SUBSEQU ENT NOTICES DATED 20.10.2014 AND 18.11.2014 AGAIN ISSUED AT THE OLD ADDRESS? WE ALSO NOTE THAT THERE IS CONTRADICTION IN THE STA ND OF THE ASSESSING OFFICER AS AT PAGES 1 AND 2 OF THE ASSESS MENT ORDER. IT IS SEEN THAT IN THE ASSESSMENT ORDER, IT IS MENTIONED THAT THE NOTICE UNDER SECTION 143(2) OF THE ACT DATED 23.09.2013 WA S SERVED ON THE ASSESSEE THROUGH SPEED POST. HOWEVER, IN THE REMAND REPORT HE MENTIONS THAT THE SAID NOTICE WAS SERVED PERSONALLY. THUS, THERE IS A CONTRADICTION IN THE STAND OF THE AO AND THE LEAR NED CIT (A) HAS MERELY PLACED RELIANCE ON THE REMAND REPORT WITHOUT THERE BEING ANY PROOF TO ESTABLISH THE FACT THAT THE NOTICE DAT ED 23.09.2013 WAS 15 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT THOUGH ISSUED AT THE OLD ADDRESS BUT WAS SERVED PERS ONALLY AT THE NEW ADDRESS OF THE ASSESSEE. THUS, THE ASSESSMENT SO FRAMED BY THE AO IS BAD IN LAW ON THIS COUNT ALSO AND IN REACH ING THIS SAID FINDING, RELIANCE IS PLACED ON THE FOLLOWING CASE LA WS: (I) CIT VS CHETAN GUPTA (DELHI HC) REPORTED IN 382 ITR 613. ONUS ON REVENUE TO PROVE SERVICE OF NOTICE 34. THERE IS SUFFICIENT JUDICIAL AUTHORITY FOR THE PROPOSITION THAT THE BURDEN OF SHOWING THAT SERVICE OF NOTICED HAS BEEN EFFECTED ON THE ASSESSEE OR HIS DULY AUTHORIZE D REPRESENTATIVE IS ON THE REVENUE. THESE INCLUDE FAT ECHAND AGARWAL V. CWT [1974] 97 ITR 701 (ORI.) AND VENKAT NAICKEN TRUST V. ITO [1999] 107 TAXMAN 391/[2000] 2 42 ITR 141 (MAD). IN CIT V. THAYABALLI MULLA JEEVAJI KAPASI [1967] 66 ITR 147 (SC), THE RESPONDENT TO WH OM THE NOTICE WAS DIRECTED WAS NOT IN TOWN. THE ONLY INFORMATION WHICH THE PROCESS SERVER HAD WAS THAT T HE RESPONDENT WAS EITHER IN BOMBAY OR CEYLON. THEREAFT ER, THE PROCESS SERVER AFFIXED THE NOTICE ON THE BUSINE SS PREMISES OF THE RESPONDENT. THE SUPREME COURT AFFIR MED THE ESSENTIAL PRINCIPLE THAT 'IF NO NOTICE WAS SERV ED WITHIN THE PERIOD, THE INCOME-TAX OFFICER WAS INCOMPETENT TO COMMENCE PROCEEDINGS FOR REASSESSMENT UNDER SECTION 34 OF 1922 ACT.' IT WAS FURTHER HELD THAT 'SERVICE OF NOTICE UNDER SECTION 34 (1) (A) WITHIN THE PERIOD OF LIMIT ATION BEING A CONDITION PRECEDENT TO THE EXISTENCE OF JUR ISDICTION, IF THE INCOME-TAX OFFICER WAS UNABLE TO PROVE THAT THE NOTICE WAS DULY SERVED UPON THE RESPONDENT WITHIN T HE PRESCRIBED PERIOD, ANY RETURN FILED BY THE RESPONDE NT AFTER THE EXPIRY OF THE PERIOD OF EIGHT YEARS WILL NOT IN VEST THE INCOME-TAX OFFICER WITH AUTHORITY TO REASSESS THE I NCOME OF THE RESPONDENT PURSUANT TO SUCH RETURN.' ON THE FAC TS OF 16 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT THAT CASE IT WAS HELD THAT THE REVENUE HAD SUFFICIE NTLY DISCHARGED THE ONUS BY PRODUCING THE AFFIDAVIT OF T HE PROCESS SERVER. (II) CIT VS HOTLINE INTERNATIONAL PVT. LTD. (DELHI HC) REPORTED IN 296 ITR 333. AS PER ORDER V, RULE 12 OF THE CODE OF CIVIL PROCE DURE THAT WHEREVER IT IS PRACTICABLE, THE SERVICE HAS TO BE E FFECTED ON DEFENDANT IN PERSON OR ON HIS AGENT. ADMITTEDLY, IN THE INSTANT CASE, NOTICE UNDER SECTION 148 WAS NOT TEND ERED TO THE ASSESSEE NOR THE SAME WAS REFUSED AT ALL BY THE ASSESSEE. IT WAS AN ADMITTED CASE OF THE REVENUE TH AT WHEN THE OFFICIALS OF THE DEPARTMENT WENT TO SERVE THE NOTICE UNDER SECTION 148 FOR THE RELEVANT ASSESSMEN T YEAR, THE SECURITY GUARD INFORMED THEM THAT THE COMPANY W AS CLOSED FOR THE HOLI FESTIVAL HOLIDAYS. THE SECURITY GUARD BY NO STRETCH OF IMAGINATION COULD BE SAID TO BE THE A GENT OF THE ASSESSEE AND, ADMITTEDLY, NO NOTICE WAS TENDERE D EITHER TO THE ASSESSEE OR HIS AGENT NOR THE SAME WA S REFUSED EITHER BY THE ASSESSEE OR HIS AGENT. [PARA 22] UNDER ORDER V, RULE 17 OF THE CODE OF CIVIL PROCEDU RE, THE AFFIXATION CAN BE DONE ONLY WHEN THE ASSESSEE OR HI S AGENT REFUSED TO SIGN THE ACKNOWLEDGEMENT OR COULD NOT BE FOUND. IN THE INSTANT CASE, NO EFFORT WAS MADE BY T HE INCOME-TAX DEPARTMENT TO SERVE THE NOTICE UPON THE ASSESSEE, SINCE THE COMPANY OF THE ASSESSEE WAS CLO SED DUE TO HOLI FESTIVAL HOLIDAYS, AND, ADMITTEDLY, NO EFFORT WAS MADE BY THE SERVING OFFICER TO LOCATE THE ASSESSEE. [PARA 23] 5.3 IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND RESPECTFULLY FOLLOWING THE PRECEDENTS AS AFORESAID, WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS NOT ISSUED ANY NOTIC E U/S 143(2) OF 17 ITA NO.2349/DEL/2017 M/S. J.K.V.B PROPERTIES PVT. LTD. VS. DCIT THE ACT TO THE ASSESSEE WITHIN THE TIME STIPULATED U NDER THE INCOME TAX ACT, 1961 AND, THEREFORE, THE IMPUGNED ASSESSME NT ORDER IS INVALID, VOID AB INITIO AND AGAINST THE PROVISIONS OF THE LAW AND IS NOT SUSTAINABLE IN THE EYES OF LAW. THE APPEAL OF AS SESSEE IS ALLOWED WITH RESPECT TO GROUND NO. 1 RAISED BY THE ASSESSEE COMPANY. 5.4 SINCE THE ASSESSMENT ORDER ITSELF IS QUASHED, THE OTHER GROUNDS RAISED BY THE ASSESSEE BECOME IN FRUCTUOUS AND THE SAME ARE DISMISSED AS SUCH. 6.0 IN THE FINAL RESULT, THE APPEAL OF THE ASSESS EE STANDS ALLOWED. ORDER PRONOUNCED ON 30/09/2020. SD/- S D/- (G.S.PANNU) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER DATED:30/09/2020 *DRAGON* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI