Sh. Mohan S Lakhani, New Delhi V. ITO, New Delhi

ITA 2379/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69477 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 13-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y KAKKARA
• Keywords: Charitable institution; Period of limitation; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI) BEFORE SHRI U. B. S. BEDI, JUDICIAL MEMBER ITA NO. 2379 / DEL/ 2012 (ASSESSMENT YEAR 2006-07 ) MOHAN S LAKHANI, VS. ITO, WARD 24(2), 4/3, SARPRIYA VIHAR, NEW DELHI NEW DELHI PAN : AABPL7879D (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SH. K. V. S. GUPTA, ADV. DEPARTMENT BY: MS. Y KAKKARA, SR. DR ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY LD. CIT(A) XII, NEW DELHI DATED 29.03.2012 RELEVANT TO ASSESSMENT YEAR 2006- 07 IN WHICH FOLLOWING THREE EFFECTIVE GROUNDS HAVE BEEN RAISED:- 1. THE ACTION O THE LD. CIT(A) IN UPHOLDING THE AC TION OF THE A.O. IN MAKING A VALID & LEGAL ASSESSMENT U/S 143(3) DES PITE THE FACT THAT NO NOTICE U/S 143(2) OF THE I. T. ACT, 1961 WAS SER VED WITHIN THE STATUTORY TIME BY 31.07.2007 & NOT TIME BARRED, NUL L & VOID IS ILLEGAL, ARBITRARY, UNWARRANTED, UNCALLED FOR & AGAINST THE FACTS & CIRCUMSTANCES OF THE CASE. 2. THE ACTION OF THE LD. CIT(A) IN UPHOLDING THE AC TION OF THE A.O. IN COMPLETING THE ASSESSMENT U/S 143(3) AS VALID & LEGAL DESPITE THE FACT THAT STATUTORY NOTICES U/S 143(2) WERE NOT SER VED WITHIN THE STATUTORY TIME ON THE BASIS THAT THE APPELLANT PART ICIPATED IN THE ASSESSMENT PROCEEDINGS (WITHOUT MENTIONING THAT THE PARTICIPATION WAS UNDER PROTEST) IS ILLEGAL ARBITRARY, UNWARRANTE D, UNCALLED FOR AND AGAINST THE FACTS & CIRCUMSTANCES OF THE CASE. 3. THE ACTION OF THE LD. CIT(A) IN NOT DECIDING WHE THER THE AFFIDAVIT FILED UNDER RULE 46A IS ADMITTED/REJECTED IS ILLEGAL, ARBITRARY, UNCALLED FOR & AGAINST THE FACTS & CIRCUMSTANCES OF THE CASE. I.T.A. NOS. 2379 /DEL/2012 2 2. THE FACTS INDICATE THAT THE RETURN WAS FILED SHO WING INCOME OF RS.3,19,980/- ON 31.07.2006 FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WHICH WAS ASSESSED AT RS.4,37,159/- AFTER MAKING AD DITION ON ACCOUNT OF INTEREST AFTER CONSIDERING THE PLEA OF THE ASSESSEE THAT A SUM OF RS.1,22,179/- WAS PAID TO VINITA LAKHANI AS INTEREST AT THE FD TE NDERING IN THE NAME OF VINITA LAKHANI WAS TAKEN IN THE NAME OF THE ASSESSE E ON ACCOUNT OF EARNING HIGHER RATE OF INTEREST. SO, THE A.O. DID NOT ACCE PT THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THE FD WAS IN THE NAME O F THE ASSESSEE AND THE ASSESSEE HAS TAKEN THE BENEFIT OF TDS AND SO THE IN TEREST PAID TO VINITA LAKHANI WAS DISALLOWED. 3. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE TOOK UP THE MATTER IN APPEAL AND SUBMITTED THAT THE NOTICE U/S 143(2) COU LD HAVE BEEN SERVED ON THE ASSESSEE LATEST BY 31.07.2007 I.E. WITHIN 12 MO NTHS OF THE END OF THE MONTH IN WHICH RETURN WAS FURNISHED. THE FIRST NOT ICE WAS SERVED IN THE MONTH OF OCTOBER 2007, AND OBJECTION TO THAT WAS FI LED VIDE LETTER DATED 05.11.2007. THE FIRST NOTICE U/S 143(2) RECEIVED I N OCT. 2007. THE SAID OBJECTION WAS AGAIN REITERATED VIDE LETTER DATED 12 .05.2008. HOWEVER, THE ASSESSEE HAS PARTICIPATED IN THE ASSESSMENT PROCEED INGS STATED TO BE UNDER PROTEST AND IT WAS PLEADED THAT THE ASSESSMENT MADE BY THE A.O. IS NULL AND VOID AS NO NOTICE U/S 143(2) WAS SERVED WITHIN THE STATUTORY TIME. RELIANCE WAS PLACE ON THE FOLLOWING DECISIONS OF THIS VIEW: I) VIRENDRA DEV DIXIT VS ACIT (2011) 331 ITR 483 ( ALL.)P.8. EFFECT OF DECISION OF HON'BLE SUPREME COURT IN HOTE L BLUE MON (2010) 321 ITR 362(SC) IS THAT THE SERVICE OF NOTIC E U/S 143(2) IS MANDATORY. II) NULON INDIA LD. VS ITO (2010) 323 ITR 681 (DEL HI) P.9 NO PRESUMPTION IN LAW THAT THE NOTICE SENT BY SPEED POST WAS DELIVERED TO THE ASSESSEE WITHIN 24 HOURS. III) CIT VS. SILVER STREAK TRADING P. LTD. (2010) 326 ITR 418 (DEL.) I.T.A. NOS. 2379 /DEL/2012 3 AFFIDAVIT BY ASSESSEE DENYING SERVICE. ONUS ON REVE NUE TO PROVE SERVICE. IV) CIT, DELHI VS M/S. LUNAR DIAMONDS LIMITED (2005 ) 281 ITR 01 (DEL.). V) CIT VS VISHNU & CO. P. LTD. (2009) 319 ITR 151 (DEL.) INVALID SERVICE. THAT THE ASSESSEE APPEARED IN ASS ESSMENT PROCEEDINGS NOT RELEVANT. ONUS ON THE DEPARTMENT TO PROVE SERVICE OF NOTICE W HERE PLEA RAISED BY THE ASSESSEE THAT NO NOTICE WAS SERVED. A) SHYAM GOPAL CHARITABLE TRUST, APPELLANT VS DIREC TOR OF INCOME TAX, RESPONDENT (2006) 290 ITR 99 (DEL.) B) BHPE KINHILL JOINT VENTURE VS ADDL. DIT (2008) 3 04 ITR (AT) 285) DELHI; (2009) 116 ITD 123 (DEL.) C) WORLD WIDE EXPORTS P. LTD. VS ITO (2005) 272 ITR 162 (AT) (DEL.) SEC 292 BB INSERTED W.E.F. 1.4.2008 IS NOT RETROSPE CTIVE BUT PROSPECTIVE (2009) 310 ITR (AT) 300 (DELHI) (SB) KU BER TOBACCO PRODUCT (P) LTD. VS DCIT. 4. THE ASSESSEE HAS ALSO FILED ADDITIONAL EVIDENCE ON WHICH REMAND REPORT WAS OBTAINED BY LD. CIT(A), WHICH ARE COMMUN ICATED TO THE ASSESSEE WHO FILED REJOINDER AND LD. CIT(A) WHILE CONSIDERIN G THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE IT, HAS CONCLUDED TO DE CIDE THE ISSUE AGAINST THE ASSESSEE AS PER FINDING AT PAGE 8 & 9 OF HIS OR DER AS UNDER: GROUND NO.1:- I HAVE PERUSED THE REMAND REPORT AS WELL AS ASSESSEES REPLY AND ALSO I HAVE PERUSED THE FACTS STATED IN T HE ASSESSMENT ORDER AS WELL AS FACTS STATED BY THE ASSESSEE. THE ASSES SEE IN HIS SUBMISSION HAS STATED THAT NOTICE U/S 143(2) WAS NOT SERVED UP ON THE ASSESSEE WITHIN THE STATUTORY TIME. HOWEVER, THE APPELLANT PARTICIPATED IN THE ASSESSMENT PROCEEDINGS AS IS CLEAR FORM THE ASSESSM ENT RECORDS. DELHI HIGH COURTS JUDGEMENT, IN THE CASE OF CIT VS SANJI V KHANNA & R.V. EASWAR, JJ (2012) 17 TAXMAN.COM 128 (DEL.) WHEREIN IT IS STATED THAT: . WHETHER WHERE NOTICE U/S 143(2) WAS SERVED O N ASSESSEE ON LAST DAY OF PRESCRIBED PERIOD OF LIMITATION BY A FFIXTURE AND, THEREUPON, ASSESSEE PARTICIPATED IN ASSESSMENT PROC EEDINGS U/S 143(3), SUBSEQUENTLY, ASSESSEE COULD NOT RAISE A PLEA THAT THERE WAS NO VALID SERVICE OF NOTICE U/S 143(2) WITHIN STATUTORY TIME AS LAID DOWN IN I.T.A. NOS. 2379 /DEL/2012 4 PROVISO THERETO AND, THUS ASSESSMENT WAS LIABLE TO BE TREATED AS NULL AND VOID. HENCE, FOLLOWING THE ABOVE CASE LAW, THE DECISION O F THE A.O. IS UPHELD AND THE APPEAL IS DISMISSED ON THIS GROUND. GROUND NO.2:- I HAVE PERUSED THE REMAND REPORT AS WELL AS ASSESSEES REPLY AND ALSO I HAVE PERUSED THE FACTS STATED IN T HE ASSESSMENT ORDER AS WELL AS FACTS STATED BY THE ASSESSEE. THE ASSES SEE HAS HIMSELF STATED THAT A SUM OF RS.1,22,179/- WAS PAID TO MS. VINITA LAKHANI AS INTEREST ON FD STANDING IN THE NAME OF VINITA LAKHANI, WAS T AKEN IN THE NAME OF THE ASSESSEE ON ACCOUNT OF EARNING INTEREST. AS , THE FD WAS NOT IN THE NAME OF THE ASSESSEE AND THE ASSESSEE HAS TAKEN BENEFIT OF TDS IN HIS HANDS, THE A.O. HAS RIGHTLY DISALLOWED THE SAME . THEREFORE, I UPHOLD THE DECISION OF THE A.O. AND THE APPEAL IS D ISMISSED ON THIS GROUND. 5. AGGRIEVED BY THIS ORDER OF LD. CIT(A), THE ASSES SEE HAS CHALLENGED THE SAME AND IT WAS STRONGLY PLEADED FOR ANNULMENT OF THE ASSESSMENT ORDER ON THE LEGAL GROUND THAT NOTICE U/S 143(2) AS ISSUE D ON 28.06.2007 HAS NOT BEEN SERVED ON THE ASSESSEE AND BY RELYING UPON TH E JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON 321 IT R 362, IT WAS SUBMITTED THAT SERVICE OF NOTICE U/S 143(2) WITHIN THE STIPULATED TIME IS A CONDITION PRECEDENT WHICH HAS NOT BEEN COMPLIED WIT H AND MOREOVER PROVISIONS OF SECTION 292BB HAVE COME ON THE STATUT E BOOK FROM ASSESSMENT YEAR 2008-09 WHEREAS THIS CASE PERTAINS TO ASSESSME NT YEAR 2006-07. THEREFORE, THE ORDER OF LD. CIT(A) IS NOT JUST AND PROPER AND MOREOVER THE CASES CITED BEFORE LD. CIT(A) ARE DISTINGUISHABLE O N FACTS. THEREFORE, IT WAS PLEADED FOR QUASHMENT OF THE ORDER OF THE A.O. AS W ELL AS OF LD. CIT(A). 6. LD. D.R. WHILE RELYING UPON THE ORDERS OF AUTHOR ITIES BELOW HAS PLEADED FOR THE CONFIRMATION OF THE IMPUGNED ORDER. IT WAS FURTHER SUBMITTED THAT THE NOTICE U/S 143(2) WAS ADDRESSED TO THE COUNSEL WHO HAD EARLIER AND SUBSEQUENTLY BEEN APPEARING BEFORE THE TAX AUTHORITIES ON BEHALF OF THE ASSESSEE AND THIS CASE WAS ALSO REPRESENTED BY THE SAME COUNSEL SO IT I.T.A. NOS. 2379 /DEL/2012 5 COULD NOT BE SAID THAT NOTICE HAS NOT BEEN SERVED U PON THE ASSESSEE WHEN THE SAME IS THE COUNSEL FOR THE ASSESSEE BEFORE THE A.O ., LD. CIT(A) AND BEFORE THIS BENCH. SO, SERVICE OF NOTICE ON ASSESSEES CO UNSEL IS DEEMED TO BE SERVICE ON THE ASSESSEE, WHILE RELYING UPON THE DEC ISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS SHANKER LAL VED PR AKASH (DEL.) 300 ITR 243 AND CIT VS MADHSY FILMS P. LTD., 301 ITR 69 (DE L.) BECAUSE DESPITE REGULAR APPEARANCE BY CA OF THE ASSESSEE BEFORE ALL THE AUTHORITIES BELOW AND BEFORE THIS BENCH, HE HAS NOT COME UP WITH HIS AFFIDAVIT DEPOSING THEREIN THAT HE DID NOT RECEIVE THE NOTICE OF HEARI NG. SO PLEA OF THE ASSESSEE IS NOT TENABLE, BY FILING COPY OF ORDER SHEET, IT W AS SUBMITTED THAT THESE ARE PROCEDURAL MATTERS AND PLEAS RAISED BY THE ASSESSEE ARE UNSUBSTANTIATED AND AFFIDAVIT ON WHICH ASSESSEE IS HEAVILY RELYING UPON IS DATED 20.08.2009 WHEREAS ASSESSMENT ORDER HAS BEEN PASSED ON 12.12.2 008 SO THE SAME WAS NOT FILED BEFORE THE A.O. THE CASE OF THE DEPARTME NT IS IN RELATION TO SECTION 292B AND NOT U/S 292BB. MOREOVER, APPEAL WAS FILED ON 13.02.2009 SO THE CASE OF HOTEL BLUE MOON IS NOT APPLICABLE TO THE CA SE OF THE ASSESSEE AS THE SAME IS IN RELATION TO SECTION 158BC. RELYING UPON THE CASE OF SALAR PUBLICATIONS TRUST VS ITO & ANOTHER 235 ITR 13 (KAR NATAKA) AND CIT VS REGENCY EXPRESS BUILDERS P. LTD., 291 ITR 55 (DEL.) , IT WAS PLEADED FOR CONFIRMATION OF THE IMPUGNED ORDER. 7. IN ORDER TO COUNTER THE SUBMISSIONS OF THE LD. D.R., LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT PROPER NOTICE MAY NOT H AVE BEEN SENT AND EVERY YEAR IS A SEPARATE YEAR, MODE OF SERVICE OF THE NOT ICE HAS NOT BEEN CLARIFIED, THEREFORE, KEEPING IN VIEW THE ENTIRETY OF THE FACT S AND CIRCUMSTANCES OF THE CASE AND THE MATERIAL AVAILABLE ON RECORD, THE ORDE RS OF AUTHORITIES BELOW MAY BE QUASHED. I.T.A. NOS. 2379 /DEL/2012 6 8. HEARD BOTH THE SIDES, CONSIDERED THE MATERIAL ON RECORD AS WELL AS THE CASE LAW CITED BY RIVAL SIDES. IT IS NOT IN DISPUT E THAT NOTICE U/S 143(2) DATED 28.06.2007 WAS SENT THROUGH SHRI K BS GUPTA, CA, TH E LD. A.R. OF THE ASSESSEE, WHO ATTENDED THE ASSESSMENT PROCEEDINGS F ROM TIME TO TIME AND FILED THE DETAILS CALLED FOR. THE SAID NOTICE WAS ISSUED WITHIN ONE YEAR FROM THE DATE OF FILING OF RETURN OF INCOME. ALL THE PL EAS RAISED BEFORE THE TRIBUNAL WERE DULY RAISED BEFORE LD. CIT(A) ALSO WHO HAS DEA LT WITH THE ISSUE IN DETAIL AFTER CONSIDERING THE FACTS AND CIRCUMSTANCE S AND CASE LAW CITED BY THE ASSESSEE, (AND NOTED BY THE FIRST APPELLATE AUTHORI TY) HAS PASSED THE IMPUGNED ORDER. SINCE NO FRESH MATERIAL OR EVIDENC E HAS BEEN PRODUCED AND THE ORDER OF LD. CIT(A) IS BASED ON THE DECISION OF HONBLE JURISDICTIONAL COURT AGAINST WHICH NO DIRECT DECISION OF ANY HIGH COURT HAS BEEN CITED, THEREFORE, NO REASONABLE BASIS HAVE BEEN FOUND TO I NTERFERE IN THE ORDER PASSED BY LD. CIT(A). AS SUCH, WHILE UPHOLDING HT ORDER OF LD. CIT(A), APPEAL OF THE ASSESSEE IS DISMISSED. 8.1 ON MERITS, NEITHER ANY GROUND HAS BEEN RAISED N OR ANY ARGUMENT HAS BEEN ADVANCED, THEREFORE, NO ADJUDICATION IN THIS R EGARD IS CALLED FOR, MOREOVER, ORDER ON THIS ISSUE IS FOUND TO BE PROPER AND JUSTIFIED, AS SUCH IS UPHELD AND THE APPEAL OF THE ASSESSEE ON THIS ISSUE IS DISMISSED. 9. AS A RESULT, THE APPEAL OF THE ASSESSEE GETS DIS MISSED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH NOV., 2013. SD./- (U.B.S.BEDI) JUDICIAL MEMBER DATED: 08 TH NOV., 2013 SP. I.T.A. NOS. 2379 /DEL/2012 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXV, NEW DELHI AR, ITAT, 5. CIT(ITAT), NEW DELHI NEW DELHI