ITO ward-3(3), Noida V. Satish Singh Bhati, Noida

ITA 2363/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1553 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 18-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Reassessment proceedings; Set aside
• Section: 143(3); 143(2); 147; 68; 148

Judgement Text

1 ITA NOS. 2363 & 2364/DEL/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I(2) + SM C-1 NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEM BER, AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 2363/DEL/2019 ( A.Y 2009-10) ITO WARD-3(3) NOIDA, UTTAR PRADESH PIN 201301 (APPELLANT) VS SATISH SINGH BHATI D-22, 4 TH FLOOR, HARMUKH APPT. ALPHA-1 NOIDA, UTTAR PRADESH PAN AYSPB8577F (RESPONDENT) ITA NO. 2364/DEL/2019 ( A.Y 2009-10) ITO WARD-3(4) NOIDA, UTTAR PRADESH PIN 201301 (APPELLANT) VS SUDERSHAN KAPOOR B-1/621, BLOCK-16, PURVANCHAL SILVER CITY, SECTOR-93, NOIDA, UTTAR PRADESH PAN AEQPK2478G (RESPONDENT) APPELLANT BY SH. PRADEEP SINGH GAUTAM, SR. DR RESPONDENT BY NONE ORDER PER BENCH THESE TWO APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER DATED 15.08.2018 PASSED BY CIT(A)-1, NEW DELHI FOR ASSES SMENT YEAR 2009-10 . DATE OF HEARING 05.03.2020 DATE OF PRONOUNCEMENT 15.05.2020 2 ITA NOS. 2363 & 2364/DEL/2019 2. THE GROUNDS OF APPEAL IN BOTH THE APPEARS ARE IDENTICAL, HENCE WE ARE REPRODUCING THE GROUNDS OF APPEAL OF ITA NO. 2363/D EL/2019 ARE AS UNDER:- ITA NOS. 2363/DEL/2019 1. THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS B Y ANNULLING THE ASSESSMENT ORDER ON THE GROUND THAT NO NOTICE UNDER SECTION 143(2) WAS ISSUED BEFORE THE COMPLETION OF ASSESSMENT. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY IGNORING THE FACTS THAT NO RETURN WAS FILED BY THE ASSESSEE IN RESPONS E TO NOTICE UNDER SECTION 148 AND NOTICE U/S 143(2) IS ONLY MANDATORY, WHERE A RETURN HAS BEEN FURNISHED UNDER SECTION 139, OR IN RESPONSE TO A NO TICE UNDER SUB-SECTION (1) OF SECTION 142 OR IN RESPONSE TO NOTICE U/S 148 OF THE I.T. ACT, 1961, WHEREAS IN THIS CASE NO RETURN WAS FILED. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY IGNORING THE FACT THAT AS PER PROVISION OF SECTION 143(2)(II) THERE IS A T IME LIMIT FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) I.E. SHALL BE SERVED ON THE AS SESSEE BEFORE THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WH ICH THE RETURN IS FURNISHED, BUT IN THE CASE UNDER CONSIDERATION NO RETURN WAS F ILED BY THE ASSESSEE. 4. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE HAD NOT FILED RETURN OF INCO ME IN RESPONSE TO NOTICE U/S 148. IF NO RETURN IS FILED, THEN NOTICE U/S 143(2) CANNOT BE ISSUED AS THERE IS A PRECONDITION OF FILING OF RETURN OF INCOME FOR ISSU ANCE OF NOTICE U/S 143(2), WHICH HAS ALSO BEEN HELD BY THE HONBLE JAMMU & KAS HMIR HIGH COURT- SRINAGAR BENCH VIDE ORDER DATED 11/10/2018 IN THE C ASE OF PR.CIT VS BROADWAY SHOE CO. IN ITA NO. 10/2017 AND HELD AS UN DER: THE NOTICE UNDER SECTION 143(2) IS REQUIRED TO BE GIVEN ONLY WHEN RETURN IS FURNISHED. FURNISHING OF THE RETURN IS A SINE QUA N ON FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. IF NO RETURN IS FU RNISHED BY THE ASSESSEE, THERE CAN BE NO REASON FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. 3 ITA NOS. 2363 & 2364/DEL/2019 SIMILAR VIEW HAS BEEN TAKEN BY A DIVISION BENCH OF THIS COURT IN THE CASE OF AZZIZ QAZI & BROTHERS V. ITO, (1974) TAX LR 540 (J& K). 5. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY ANNULLING THE ASSESSMENT ORDER AS ON SIMILAR ISSUES HONBLE ITAT, DELHI BENCH SMC, NEW DELHI VIDE ORDER DATED 30/10/2017 IN ITA NO.4310/DE L/2017 IN THE CASE OF SH. SACHIN S/O LATE SH. BHULE SINGH VILLAGE -MAMURA , SECTOR-66, PARGANA & TEHSIL - DADRI, NOIDA ( PAN-APPPK6176F) FOR A.Y.200 8-09 HAS ALLOWED THE APPEAL OF THE REVENUE. 6. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY ANNULLING THE ASSESSMENT ORDER IGNORING THE FACT THAT ASSESSMENT ORDER WAS PASSED U/S 147/144 AND NOT U/S 143(3) AS NOTED BY LD. CIT(A) I N THE BODY OF THE ORDER. 7. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY DIRECTING THE ASSESSING OFFICER TO REFRAME THE ASSESSMENT ORDER U NDER THE PROVISIONS OF SECTION 150 OF THE I.T. ACT, 1961 AS IN THE INSTANT CASE REVIVAL OF ASSESSMENT U/S 150 WILL NOT BE APPLICABLE DUE TO THE PROVISION S OF SUB-SECTION (2) OF SECTION 150. THIS IS DUE TO THE FACT THAT THIS CASE PERTAINS TO THE ASSESSMENT YEAR 2009-10 AND ASSESSMENT ORDER, WHICH IS SUBJECT MATTER OF APPEAL/REVISION, WAS PASSED ON 07/12/2016. THE PROV ISION OF SUB-SECTION (1) OF SECTION 150 SHALL NOT APPLY IN THIS CASE AS ACTI ON FOR ASSESSMENT/ REASSESSMENT PROCEEDINGS WOULD HAVE BEEN BARRED BY TIME WHEN THE ASSESSMENT ORDER, WHICH WAS SUBJECT MATTER OF APPEA L, WAS PASSED IN THE LIGHT OF PROVISIONS OF SUB SECTION (2) OF SECTION 1 50. FOR CLARITY SECTION 150 IS REPRODUCED AS HEREUNDER: 150(1): NOTWITHSTANDING ANYTHING CONTAINED IN SECT ION 149, THE NOTICE U./S 148 MAY BE ISSUED AT ANY TIME FOR THE PURPOSE OF MAKING AN ASSESSMENT OR REASSESSMENT OR RECOMPUTATION IN CONS EQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN ORDER PASSED BY ANY AUTHORITY IN ANY PROCEEDING UNDER THIS ACT BY WAY O F APPEAL, REFERENCE OR 4 ITA NOS. 2363 & 2364/DEL/2019 REVISION [ OR BY A COURT IN ANY PROCEEDING UNDER AN Y OTHER LAW], (2) THE PROVISIONS OF SUB-SECTION(L) SHALL NOT APPL Y IN ANY CASE WHERE ANY SUCH ASSESSMENT, REASSESSMENT OR RECOMPUTATION AS I S REFERRED TO IN THAT SUB-SECTION RELATES TO AN ASSESSMENT YEAR IN RESPEC T OF WHICH AN ASSESSMENT, REASSESSMENT OR RECOMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME THE ORDER WHICH WAS THE SUBJECT-MATTER OF THE APPEAL, REFERENCE OR REVISION, AS THE CASE MAY BE, WAS MADE BY REASON OF ANY OTHER PROVISION LIMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSES SMENT, REASSESSMENT OR RECOMPUTATION MAY BE TAKEN. 8. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS BY ANNULLING THE ASSESSMENT ORDER IGNORING THE FACT AS NOTED BY HON BLE ITAT, DELHI BENCH E, NEW DELHI VIDE ITS ORDER IN ITA NO. 267/DEL./2013 [ A.Y. 2002-03] IN THE CASE OF ITO WARD-13(2), NEW DELHI VS. M/S NEETEE CLOTHIN G (P) LTD., 6/28, SHANTI NIKETAN, NEW DELHI, IN WHICH IT HAS BEEN AMPLY CLAR IFIED WHEN THE PROVISIONS OF SECTION 150 OF THE ACT MAY BE ENACTED. IN THE RE FERRED ORDER (SUPRA), IT HAS BEEN EXPLAINED ON THIS ISSUE AS UNDER: WE FIND THAT THE PROVISIONS OF SUB-SECTION (1) SHA LL NOT APPLY WHERE THE REASSESSMENT PROCEEDINGS WOULD HAVE BEEN BARRED BY TIME EVEN AT THE TIME WHEN THE ORDER, WHICH WAS THE SUBJECT-MATTER O F APPEAL, REVISION, ETC., WAS PASSED. IN OTHER WORDS, SUB-SECTION (2) PROVIDES A RIDER AS IF IN THE NATURE OF A PROVISO TO SUBSECTION (1) PROVIDING THAT THE PROVISIONS OF SUB-SECTION (1) SHALL NOT APPLY WHERE BY VIRTUE OF ANY OTHER PROVISION LIMITING THE TIME WITHIN WHICH ACTION FOR ASSESSMEN T, REASSESSMENT OR RE- COMPUTATION MAY BE TAKEN, SUCH ASSESSMENT, REASSESS MENT OR RE- COMPUTATION IS BARRED ON THE DATE OF THE ORDER WHIC H IS THE SUBJECT-MATTER OF THE APPEAL, REFERENCE OR REVISION IN WHICH THE F INDING OR DIRECTION IS CONTAINED. IT WOULD, THUS, MEAN THAT AN APPELLATE O R REVISION AUTHORITY CANNOT GIVE A DIRECTION FOR ASSESSMENT OR REASSESSM ENT WHICH GOES TO THE EXTENT OF CONFERRING JURISDICTION UPON THE ASSESSIN G OFFICER IF HIS 5 ITA NOS. 2363 & 2364/DEL/2019 JURISDICTION HAD CEASED DUE TO THE BAR OF LIMITATIO N. IF THE ISSUING OF A NOTICE FOR ASSESSMENT OR REASSESSMENT FOR A PARTICU LAR ASSESSMENT YEAR HAD BECOME TIME-BARRED AT THE TIME OF THE ORDER, WH ICH WAS THE SUBJECT- MATTER OF THE APPEAL, THE PROVISIONS OF SECTION 150 (1) CANNOT BE INVOKED FOR MAKING AN ASSESSMENT OR REASSESSMENT. * 9. THAT THE APPEAL IS PREFERRED AS PER PARA 10(A) OF THE CBDT CIRCULAR NO.03/2018 DATED 11/07/2018 NOTWITHSTANDING THE FAC T THAT TAX EFFECT IN THIS CASE IS BELOW RS.20 LAKHS. 10. THE APPELLANT CRAVES TO LEAVE, ADD, ALTER AND AMEN D ANY OF THE GROUNDS OF APPEAL ON OR BEFORE HEARING. 11. THAT THE ORDER OF THE LD. CIT(A) DESERVES TO BE SE T-ASIDE AND THE ORDER OF THE AO BE RESTORED. 3. WE ARE TAKING BRIEF FACTS OF ITA NO. 2363/DEL/2 019 AS IN BOTH THE APPEALS FACTS ARE IDENTICAL. THE ASSESSEE IS A FARM ER AND SOLD AGRICULTURAL LAND THROUGH TWO SALE DEEDS. THE TOTAL CASH RECEIVED FR OM SALE OF SAID AGRICULTURAL LAND WAS RS.12,60,000/-. DURING THE ASSESSMENT PRO CEEDINGS, THE ASSESSEE SUBMITTED TAHSILDAR CERTIFICATE FOR BOTH THE LANDS AND SUBMITTED THAT THE LANDS ARE SITUATED 16 KILO METER FAR FROM MUNICIPAL LIMIT OF SIKANDRABAD. THE ASSESSING OFFICER ADMITTED THE AMOUNT OF RS. 3,60,0 00/- RECEIVED BY THE ASSESSEE FROM HIS FATHER THROUGH SALE PROCEEDS OF T HE AGRICULTURAL LAND BUT DID NOT CONSIDERED THE SALE PROCEEDS OF THE SECOND LAND . THE ASSESSING OFFICER MADE ADDITION OF RS. 6,74,000/- AS CASH DEPOSIT TRE ATED AS UNEXPLAINED INCOME U/S 68 AND PASSED THE ASSESSMENT ORDER. THE ASSESS EE SUBMITTED TAHSILDAR CERTIFICATE FOR BOTH THE LANDS AND SUBMITTED THAT T HE LANDS ARE SITUATED 16 KILO METER FAR FROM MUNICIPAL LIMIT OF SIKANDRABAD. 6 ITA NOS. 2363 & 2364/DEL/2019 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE SUBSTANTIAL A DDITION BUT SUSTAINED THE PROTECTIVE ADDITION. 5. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. THE LD. DR SUBMITTED THAT THE CIT(A) WRONGLY ANNULLED THE ASSESSMENT ORDER ON THE GROUND THAT NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED BEFORE T HE COMPLETION OF ASSESSMENT. HENCE, THE FINDING OF THE CIT(A) IS CON TRARY TO THE FACTS AND LAW AND THEREFORE, IS LIABLE TO BE SET ASIDE. 6. NONE APPEARED FOR THE ASSESSEE DESPITE GIVING NO TICE, THEREFORE, WE ARE PROCEEDINGS ON THE BASIS OF THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES. 7. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT BEFORE THE CIT(A) THE ASSESSEE TOOK THE LEGAL GROUND THAT THE IMPUGNED ASSESSMENT ORDER WAS FRAMED BY TH E ASSESSING OFFICER WITHOUT ASSUMING THE JURISDICTION U/S 143(2) OF THE INCOME TAX ACT, 1961 AND WITHOUT SERVING UPON THE ASSESSEE THE NECESSARY NOT ICES THERE UNDER. ADMITTEDLY IN THE PRESENT CASE THE LD. DR STATED TH AT NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED BEFORE THE COMPLETION OF THE ASSESSMENT. THE ASSESSEE HAS FILED RETURN OF INCOME AT NIL IN RESPO NSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE CIT(A) HAS RIGHTLY RELIED UPON THE DECISION OF THE TRIBUNAL IN CASE OF ITO VS. SANJAY BEING ITA NO. 3701/DEL/20 18 ORDER DATED 02.03.2020 AND HELD THAT THE IMPUGNED ASSESSMENT ORDER IS DEFE CTIVE IN LAW AND IS ANNULLED. THE CIT(A) HAS FURTHER HELD THAT THE REVE NUE IS PROTECTED UNDER THE PROVISIONS OF SECTION 150 OF THE INCOME TAX ACT. TH E ASSESSING OFFICER WAS FURTHER DIRECTED TO REOPEN THE ASSESSMENT UNDER SEC TION 147 OF THE ACT AND THEREAFTER, REFRAME THE ASSESSMENT ORDER AFTER FOLL OWING THE DUE PROCESS OF LAW AND AFTER ISSUING NECESSARY NOTICES TO THE ASSESSEE AS PER LAW AND AFTER GIVING TO THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEA RD AND CONSIDERING THE EVIDENCE LAID BY THE ASSESSEE. THUS, THE CIT(A) HAS GIVEN A ELABORATE FINDINGS 7 ITA NOS. 2363 & 2364/DEL/2019 WHICH DOES NOT REQUIRE ANY INTERFERENCE. HENCE, APP EAL BEING ITA NO. 2363/DEL/2019 FILED BY THE REVENUE IS DISMISSED. 8. AS REGARDS TO ITA NO. 2364/DEL/2019, THE FACTS, GROUNDS AND THE FINDINGS OF THE CIT(A) ARE IDENTICAL, THEREFORE, TH IS APPEAL FILED BY THE REVENUE IS ALSO DISMISSED. 9. IN RESULT, BOTH THE APPEALS OF THE REVENUE ARE D ISMISSED. ORDER PRONOUNCED ON THIS 15 TH DAY OF MAY, 2020. SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/05/2020 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 8 ITA NOS. 2363 & 2364/DEL/2019 DATE OF DICTATION 12.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 5 . 0 5 . 2 0 2 0 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER