Smt. Sarita Devi, Delhi V. ITO, Gurgaon

ITA 2363/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3028 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 29-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Additional evidence; Reassessment proceedings
• Section: 142(1); 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A.NO. 2363 /DEL/201 4 A.Y. : 200 9 - 10 SMT. SARITA DEVI, C/O KAPIL GOEL, ADVOCATE, F-26/124, SECTOR-7 ROHINI, DELHI 110 085 (PAN: AFJPD8447A) VS. INCOME TAX OFFICER, WARD 1(1), GURGAON (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. KAPIL GOEL, ADV. DEPARTMENT BY : SH. S.S. RANA, CIT(DR) ORDER ORDER ORDER ORDER PER H.S. SIDHU, JM PER H.S. SIDHU, JM PER H.S. SIDHU, JM PER H.S. SIDHU, JM THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 14/02/2014 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS-2), FARIDABAD ON THE FOLLOWING GROUNDS:- LEGAL GROUND ON SERVICE OF JURISDICTIONAL NOTICE U /S. 143(2) BEFORE EXPARTE ASSESSMENT FRAMED U/S. 144. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMPUGNED EXPARTE ASSESSMENT FRAMED BY AO IS VOID AB INITIO FOR WANT OF MANDATORY SERVICE OF JURISDICTIONAL NOTICE U/S. 143(2) AT LATEST AVAILABLE ADDRESS. 2 PRAYER TO CALL: CASE RECORDS (IF DEEMED APPROPRIATE ) 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE IMPUGNED EXPARTE ASSESSMENT FRAMED BY AO IS VOID AB INITO FOR WHICH STRAIGHT PRAYER IS MADE TO CALL FOR CASE RECORDS FROM THE OFFICE OF AO . ADDITION OF RS. 60,29,000/- WRONGLY SUSTAINED BY CIT(A) ON MERITS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE ADDI TION OF RS. 60,29,000/- ON BASIS OF PERVERSE FINDINGS AND IRRELEVANT GROUNDS AND IGNORING ASSESSEES PLEADING S. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE ADDI TION OF RS. 40,00,000/- WHICH IS SUFFICIENTLY EXPLAINED BEI NG RECEIVED FROM DULY IDENTIFIED SH. HAR PRAKASH AS AD VANCE FOR PROPERTY SALE WITHOUT ANY MEANINGFUL ENQUIRY F ROM SAID PARTY AND SUMMARILY REJECTING ASSESSEES PLEA. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. CIT(A) IN SUSTAINING THE ADDITION O F RS. 40,00,000/- WHICH IS SUFFICIENTLY EXPLAINED BEING RECEIVED FROM DULY IDENTIFIED SH. HAR PRAKASH WHO H AS 3 HANDSOME CREDITWORTHINESS AS DEMONSTRATED FROM HIS BANK STATEMENT AND GENUINENESS IS PROVED BY AGREEME NT TO SELL. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE BALA NCE ADDITION OF RS. 20,29,500/- BEING CASH WITHDRAWN AN D RE-DEPOSITED WHICH IS PROVED BY FUND FLOW STATEMENT . THAT THE APPELLANT CRAVES LEAVE TO ADD, TO, AMEND, MODIFY, RESCIND, SUPPLEMENT OR ALTER ANY OF THE GRO UNDS STATED HEREINABOVE, EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 2. THE FACTS EMANATE FROM THE ASSESSMENT ORDER A RE THAT RETURN DECLARING AN INCOME OF RS. 2,58,140/- FOR A.Y. 2009-10 WAS FILED ON 08-03-2010 BY THE ASSESSEE, WHICH WAS PROCESSED U/S 143(1) OF THE I NCOME TAX ACT, 1961 (HEREAFTER REFERRED AS ACT). THE CASE OF THE ASSESS EE WAS SELECTED FOR SCRUTINY THROUGH CASS FOR A.Y 2009-10. STATUTORY NOTICE U/S 143(2) OF THE INCOME TAX ACT WAS ISSUED ON 19-08-2010 BY THE INCOME TAX OFFI CER, WARD-3, GURGAON FIXING THE CASE FOR 06-09-2010 AND DULY SERVED. THE REAFTER, THE CASE TRANSFERRED TO THE ITO, WARD 1(1), GURGAON AS THE JURISDICTION OVER THE CASE LIES WITH HIM. ACCORDINGLY, NOTICE U/S 143(2) AND 142(1) OF THE IN COME TAX ACT, 1961 ALONGWTTH DETAILED QUESTIONNAIRE WERE ISSUED ON 8.6.2011 AND CASE WAS FIXED FOR HEARING ON 22.6.2011 AND DULY SERVED. THEREAFTER, VARIOUS O PPORTUNITIES WERE ALLOWED TO THE ASSESSEE BY ISSUING NOTICES UNDER SECTION 143(2 ) AND 142(1) OF I.T. ACT, 4 HOWEVER, THE ASSESSEE HAS NOT MADE ANY COMPLIANCE. AS PER AO, THE ASSESSEE WAS NOT COOPERATING IN THE MATTER OF FINALIZATION O F ASSESSMENT PROCEEDINGS AND IT WAS OF NO USE KEEPING THE CASE PENDING WHICH IS GOING TO BE BARRED BY LIMITATION ON 31.12.2011, THEREFORE, NOTICE U/S. 14 2(1) ALONGWITH DETAILED SHOW CAUSE GIVING THEREIN DETAILS OF OPPORTUNITIES ALLOW ED WAS ISSUED ON 08.11.2011 FINALLY FIXING THE CASE FOR 14.11.2011. AO NOTED TH AT EVEN ON THE FINAL FIXED DATED I.E. 14.11.2011 AND THEREAFTER TILL DATE THE ASSESS EE HAS NOT FURNISHED ANY INFORMATION/ DOCUMENTS. AO FURTHER OBSERVED THAT FR OM THE NON-COOPERATIVE ATTITUDE OF THE ASSESSEE, IT CAN BE CONCLUDED THAT THE ASSESSEE HAS NO EXPLANATION AND EVIDENCE IN REGARD TO THE INFORMAT ION / DOCUMENTS AS CALLED FOR VIDE QUESTIONNAIRE AND FINAL SHOW CAUSE NOTICE. UN DER THESE CIRCUMSTANCES, THE AO WAS LEFT WITH NO ALTERNATIVE BUT TO FINALISE THE ASSESSMENT EXPARTE U/S. 144 OF THE INCOME TAX ACT, 1961 ON THE BASIS OF BEST JUDG MENT AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AT THE INCOME OF RS. 3 ,97,36,900/- BY MAKING ADDITION OF RS. 60,29,500/- AND RS. 3,34,49,264/- V IDE ORDER DATED 09.12.2011. 3. AGGRIEVED WITH THE AFORESAID ORDER DATED 09.12. 2011, ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A), WHO IMPUGNED ORDER DA TED 14.02.2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGAINST THE AFORESAID ORDER DATED 14.02.2014 PAS SED BY THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING LD. COUNSEL OF THE ASSES SEE ARGUED ONLY ON THE ISSUE INVOLVED IN GROUND NO. 1 RELATING TO SERVIC E OF JURISDICTIONAL NOTICE U/S. 143(2) BEFORE EXPARTE ASSESSMENT FRAMED U/S. 144 OF THE I.T. ACT, 1961. HE STATED THAT NO NOTICE U/S. 143(2) OF THE I.T. ACT, 1961 WAS SERVED UPON THE ASSESSEE, AS A RESULT OF WHICH CRITICAL EVIDENCE PE RTAINING TO THE ADDITIONS MADE 5 BY THE AO COULD NOT BE SUBMITTED DURING THE ASSESSM ENT PROCEEDINGS. HE FURTHER STATED THAT LD. CIT(A) IN HIS ORDER AT PAGE NO. 6 & 7 VIDED PARA NO. 3.4 HAS HELD THAT THE AO HAS NOT COMMENTED UPON THE FACT THAT THE ASSESSEE COULD NOT GET NOTICE U/S. 143(2)/142(1) OF THE INCOME TAX ACT, BE CAUSE OF WHICH THERE WAS NO COMPLIANCE ON HER PART AND ADDITIONS WERE MADE IN T HE ORDER U/S. 144 OF THE ACT. THEREFORE, HE STATED THAT THE PRESENT CASE HAS INVOLVED THE LEGAL ISSUE OF NON-SERVICE OF MANDATORY NOTICE U/S. 143(2) OF THE ACT WHICH IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COUR T OF INDIA IN THE CASE OF ACIT & ANR. VS. HOTEL BLUE MOON [2010] 321 ITR 362 (SC) WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT THE ISSUE OF NOTICE U/S . 143(2) OF THE I.T. ACT IS MANDATORY AND NOT PROCEDURAL. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER PA SSED BY THE LD. CIT(A) AND STATED THAT THE LD. FIRST APPELLATE AUTHORITY HAS PASSED A WELL REASONED ORDER ON THE BASIS OF THE RECORDS AND AS PER THE P ROVISIONS OF LAW, THEREFORE, THE IMPUGNED ORDER MAY BE UPHELD BY DISMISSING THE APPE AL FILED BY THE ASSESSEE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E RELEVANT RECORDS ESPECIALLY THE ORDER PASSED BY THE REVENUE AUTHORITIES ALONGW ITH THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE SUPPORTING THE CLAIM OF THE ASSESSEE AS WELL AS THE AFORESAID DECISION RENDERED BY THE HONBLE SUPR EME COURT OF INDIA ON THE LEGAL ISSUE IN DISPUTE. NO DOUBT ASSESSEE HAS RAI SED SO MANY GROUNDS OF APPEAL IN WHICH THE ASSESSEE CHALLENGED THE NON-SER VICE OF THE NOTICE U/S. 143(2) OF THE ACT AND ALSO MERITS OF THE CASE. ASSE SSEE HAS ALSO CHALLENGED THE ADDITION IN DISPUTE ON MERIT ALSO BY PRODUCING VARI OUS DOCUMENTARY EVIDENCE SUPPORTING ITS CLAIM BEFORE THE REVENUE AUTHORITY A S WELL AS BEFORE US, BUT HE ARGUED ONLY ON THE LEGAL ISSUE RAISED IN GROUND NO. 1. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ARGUMENTS ADVANCED BY THE 6 LD. AR OF THE ASSESSEE, WE ARE OF THE VIEW THAT TH E LEGAL ISSUE RAISED IN GROUND NO. 1 REGARDING THE NON-ISSUANCE OF NOTICE U/S. 1 43(2) OF THE I.T. ACT, WHICH GOES TO THE ROOT OF THE MATTER, CAN BE TAKEN UP FIR ST AND DECIDE ACCORDING TO THE FACTS AND CIRCUMSTANCES OF THE CASE LAW CITED BY TH E LD. COUNSEL OF THE ASSESSEE. 7.1 WE FIND THAT LD. CIT(A) IN HIS IMPUGNED ORDE R VIDE PARA NO. 3.4 & 3.5 AT PAGE NO. 6 & 7 HAS OBSERVED AS UNDER:- 3.4 I HAVE CONSIDERED THE FACTS OF THE CASE TOG ETHER WITH THE SUBMISSIONS OF THE APPELLANT AND THE REPORT OF THE AO ON THE ADMISSIBILITY OF ADDITIONAL EVIDENCE. IT HAS BE EN SUBMITTED BY THE APPELLANT THAT NOTICES 143(2)/142(1) OF THE INCOME TAX ACT COULD NOT BE SERVED ON HER, AS A RESULT OF WHIC H CRITICAL EVIDENCE PERTAINING TO THE ADDITIONS MADE BY THE AO COULD NOT BE SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. SINCE, CRITICAL EVIDENCE HAVING SIGNIFICANT RAMIFICATION I N SO FAR AS THIS CASE IS CONCERNED, COULD NOT BE FILED AND NO C OMPLIANCE MADE DURING THE ASSESSMENT PROCEEDINGS, THE AO WAS LEFT WITH NO OPTION BUT TO PASS THE ORDER U/S 144 OF THE INCOME TAX ACT. IT HAS BEEN SUBMITTED BY THE APPELLANT THA T SHE COULD KNOW ABOUT THE ASSESSMENT ONLY ON 18.04.2012 WHEN T HE NOTICE OF RECOVERY OF DEMAND WAS SERVED ON HER. ACCORDINGLY, THE APPELLANT APPLIED FOR A COPY OF OR DER AND DEMAND NOTICE, WHICH WAS SERVED ON HER ON 22.06.201 2 AGAINST WHICH THE APPEAL WAS FILED ON 25.06.2012. T HE AO HAS SUBMITTED THAT AT LEAST 3 OPPORTUNITIES WERE GI VEN TO THE APPELLANT FOLLOWED BY A SHOW CAUSE NOTICE WHICH REM AINED UN-COMPLIED WITH, AS A RESULT OF WHICH HE HAS LEFT WITH NO 7 ALTERNATIVE BUT TO PASS ORDER U/S 144 OF THE INCOME TAX ACT. HOWEVER, THE AO HAS NOT COMMENTED UPON THE FACT THA T THE APPELLANT COULD NOT GET NOTICE U/S 143(2)/142(1) OF THE INCOME TAX ACT BECAUSE OF WHICH THERE WAS NO COMPLI ANCE ON HER PART AND ADDITIONS WERE MADE IN THE ORDER U/ S 144 OF THE INCOME TAX ACT. RULE 46A LISTS 4 CIRCUMSTANCES UNDER WHICH THE ADDITIONAL EVIDENCE SHALL BE ADMITTED AT THE APPELLATE STAGE: A) 'WHERE THE ASSESSING OFFICER HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER; OR C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE ASSESSING OFFICER ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR A) WHERE THE ASSESSING OFFICER HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCED RELEVANT TO ANY GROUND OF APPEAL.' 3.5 AFTER CONSIDERING THE FACTS OF THE CASE AND IN THE LIGHT OF THE FOUR CIRCUMSTANCES MENTIONED IN RULE 46A, I HOLD 8 THAT THE APPELLANT'S CASE IS COVERED BY RULE 46A(1) (B) AND (C) OF THE INCOME TAX RULES. HENCE, CONSIDERING THE FACTS OF THE CASE, PARTICULARLY, THE NON-SERVIC E OF NOTICES U/S. 143(2)/142(1), THE AMOUNT INVOLVED AND IN THE INTEREST OF JUSTICE AND FAIR PLAY, THE ADDITION AL EVIDENCE FILED BY THE APPELLANT DURING THE COURSE O F APPELLATE PROCEEDINGS IS HEREBY ADMITTED. 7.2 AFTER PERUSING THE AFORESAID FINDINGS OF THE LD . CIT(A), WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS HIMSELF ADMITT ED IN THE AFORESAID PARA NO. 3.5 THAT HE IS ADMITTING ADDITIONAL EVIDENCES FILED BY THE ASSESSEE UNDER RULE 46A(1)(B) AND (C) OF THE INCOME TAX RULES, BECAUSE OF NON-SERVICE OF NOTICE U/S. 143(2)/142(1) OF THE I.T. ACT. SECONDLY, THE LD. CI T(A) HAS ALSO MENTIONED IN PARA NO. 3.4 AS REPRODUCED ABOVE, THAT THE APPELLANT COU LD NOT GET NOTICE U/S. 143(2)/142(1) OF THE I.T. ACT, BECAUSE THERE WAS N O COMPLIANCE BY THE ASSESSEE AND ADDITION WERE MADE IN THE ORDER U/S. 144 OF THE ACT MEANING THEREBY THAT LD. CIT(A) HIMSELF ADMITTED THAT NO NOTICE U/S. 14 3(2)/142(1) OF THE I.T. ACT HAS BEEN SERVED UPON THE ASSESSEE AND THE AO COMPLETED THE ASSESSMENT BY MAKING THE ADDITION IN DISPUTE IN THE CASE OF THE ASSESSEE AND THE LD. CIT(A) HAS UPHELD THE ORDER OF THE AO WITHOUT APPRECIATING TH E NON-SERVICE OF NOTICE TO THE ASSESSEE U/S. 143(2) OF THE I.T. ACT. UNDER THE CI RCUMSTANCES, THE EXPARTE ASSESSMENT ORDER IS VOID AB INITIO FOR WANT OF MAN DATORY SERVICE OF JURISDICTIONAL NOTICE U/S. 143(2) OF THE I.T. ACT, 1961 AND HENCE, NOT SUSTAINABLE IN THE EYES OF LAW, IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF ACIT & ANR. VS. HOTEL BLUE MOON [2010] 321 ITR 362 (SC) WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT THE ISSUE OF NOTICE U/S . 143(2) OF THE I.T. ACT IS MANDATORY AND NOT PROCEDURAL. THE OPERATIVE PORTION OF THE AFORESAID DECISION IS REPRODUCED AS UNDER:- 9 ACIT & ANR. VS. HOTEL BLUE MOON: ACIT & ANR. VS. HOTEL BLUE MOON: ACIT & ANR. VS. HOTEL BLUE MOON: ACIT & ANR. VS. HOTEL BLUE MOON: [(2010) 321 ITR 362 (SC)] [(2010) 321 ITR 362 (SC)] [(2010) 321 ITR 362 (SC)] [(2010) 321 ITR 362 (SC)] HELD: IT IS MANDATORY FOR THE AO TO ISSUE NOTICE U /S 143 (2). THE ISSUANCE AND SERVICE OF NOTICE U/S 143 (2) IS MANDA TORY AND NOT PROCEDURAL. IF THE NOTICE IS NOT SERVED WITHIN THE PRESCRIBED PERIOD, THE ASSESSMENT ORDER IS INVALID REASSESSMENT-----NO TICE----- ASSESSEE INTIMATING ORIGINAL RETURN BE TREATED AS F RESH RETURN--- REASSESSMENT PROCEEDINGS COMPLETED DESPITE ASSESSEE FILING AFFIDAVIT DENYING SERVICED OF NOTICE UNDER SECTION 143(2)---- ASSESSING OFFICER NOT REPRESENTING BEFORE COMMISSIO NER (APPEALS) THAT NOTICE HAD BEEN ISSUED---- REASSESSMENT ORDER INVALID DUE TO WANT OF NOTICE UNDER SECTION 143(2)--- INCOME-TAX A CT, 1961, SS. 143, 147, 148(1), PROV.----ITO V. R.K. GUPTA [308 I TR 49 (DELHI)TRIBU., 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENT, AS AFORESAID, WE CANCEL THE ASSESSME NT ORDER AS WELL AS THE IMPUGNED ORDER, BY ACCEPTING THE APPEAL FILED BY TH E ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON 04/12/2017. SD/- SD/- [L.P. SAHU] [L.P. SAHU] [L.P. SAHU] [L.P. SAHU] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 04/12/2017 SR BHATNAGAR SR BHATNAGAR SR BHATNAGAR SR BHATNAGAR 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