M/s. Vitir Chattel Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 2452/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0247 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 03-03-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 24-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMRENDRA KUMAR
• Assessee Lawyers: K R MANJANI
• Keywords: Unexplained cash credit; Opportunity of being heard; Set aside
• Section: 142(1); 144

Judgement Text

ITA NO. 2452/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2452/DEL/2010 A.Y. : 2007-08 M/S VITIR CHATTEL PVT. LTD., NULON HOUSE, TRIBHUVAN COMPLEX, ISHWAR NAGAR, MATHURA ROAD, NEW DELHI 110 065 (PAN/GIR NO. : AAACV0113E) VS. ITO, WARD 17(4), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. K.R. MANJANI, ADV. DEPARTMENT BY : SH. AMRENDRA KUMAR, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 19.4.2 010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- LD. ASSESSING OFFICER AS WELL AS LD. COMMISSIONER OF INCOME TAX (APPEALS) HAVE ERRED ON FACTS AS WELL AS IN LAW IN PASSING EX- PARTE ORDERS AND NOT DECLARING THE ASSESSMENT AS VO ID, NOTICE U/S. 143(2) NOT HAVING BEEN SERVED WITHIN TIME. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) IS SELF CONTRADICTORY. ON ONE HAND ON PAGE 4 OF THE ORDER IT SHOWS THE ITA NO. 2452/DEL/2010 2 COMPLETE ADDRESS OF THE APPELLANT WHEREAS ADDRESS GI VEN IN THE NOTICE SHOWS THAT TRIBHUVAN COMPLEX IS WRITTEN LATE R ON AND MATHURA ROAD AND ISHWAR NAGAR ARE NOT FULLY REFLECTE D IN THE NOTICE AND THE RECEIPT OF THE POST OFFICE DOES NOT SHOW TRIBHUVAN COMPLEX OR ISHWAR NAGAR. THE DEPARTMENT HAS FAILED TO DISCHARGE THE ONUS OF SHOWING SERVICE IN THE FACE OF AFFIDAVIT OF THE APPELLANT, DENYING THE SERVICE AND DEPARTMENT NOT FOLLOWING DIRECTIONS OF H ONBLE DELHI HIGH COURT OF TAKING INFORMATION ABOUT SERVICE FRO M POST OFFICE. THE ADDITION OF ` 4,54,577/- IN RESPECT OF SUNDRY C REDITORS WHICH IS COMING FROM EARLIER YEARS AS REFLECTED IN THE BALANC E SHEET AND DETAILS OF EXPENSES PAYABLE FILED WITH THE RETURN. 3. IN THIS CASE ASSESSMENT WAS FRAMED U/S 144 OF THE IT ACT. ASSESSING OFFICER NOTED THAT VARIOUS NOTICES HAVE BEEN ISSUED, BUT THERE HAS BEEN NO COMPLIANCE ON THE PART OF THE ASSE SSEE. ASSESSEE ALSO CHALLENGED THE SERVICE OF NOTICE U/S 143(2) D ATED 27.9.2008. ASSESSEE WAS GIVEN THE COPY OF THE NOTICE. HOWEVER, ACCORDING TO THE ASSESSEE NOTICE WAS NOT SERVED UPON HIM. ASSESS ING OFFICER PROCEEDED TO ASSESS THE INCOME BY ADDING SUNDRY CRE DIT LIABILITY TREATED AS CEASED AMOUNTING TO ` 454477/- AND INCREA SE IN CASH IN HAND AND BANK (UNEXPLAINED CASH CREDIT ` 53876/-) . ITA NO. 2452/DEL/2010 3 4. AGAINST THIS ORDER THE ASSESSEE APPEALED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND LD. COMMISSIO NER OF INCOME TAX (APPEALS) OBSERVED AS UNDER:- 7. AS SEEN FROM THE ASSESSEE ORDER / RECORD, THE F OLLOWING DETAILS ARE AVAILABLE: DATE NATURE OF NOTICE REMARKS 27.9.2008 143(2) SENT BY SPEED POST AS PER POSTAL RECEIPT 8.9.2009 142(1) FOR COMPLIANCE ON 14.9.2009 SERVED ON SHRI AJAY SHARMA, ACCOUNTANT OF THE ASSESSEE. NO RESPONSE 21.10.2009 142(1) ASSESSEE FILED LETTER DATED 31.10.2009 STATING THAT NOTICE U/S. 143(2) WAS NOT ISSUED. SHRI AJAY SHARMA WAS SHOWN POSTAL RECEIPT FOR HAVING DISPATCHED 143(2) NOTICE. ASSESSEE WAS ASKED TO FURNISH REPLY / DETAILS BY 9.11.2009. ASSESSEE FILED ANOTHER LETTER DATED 9.11.2009 SEEKING TIME TILL 2 ND WEEK OF DEC, 2009. THE ASSESSING OFFICER GAVE TIME ITA NO. 2452/DEL/2010 4 UPTO 16.11.2009 THE ASSESSEE FILED LETTER 11.11.2009 ON 16.11.2009 CHALLENGING THE VALIDITY OF THE PROCEEDINGS. 8. I HAVE GONE THROUGH THE ASSESSMENT ORDER, WRIT TEN SUBMISSIONS AND THE RECORD MAINTAINED BY THE ASSESSI NG OFFICER . 9.1 THE NOTICE U/S 143(2) DATED 28.9.2008 WAS ISSU ED AT THE FOLLOWING ADDRESS: M/S VITIR CHATTEL PVT. LTD. NULON HOUSE, TRIBHUVAN COMPLEX, MATHURA ROAD, ISHWAR NAGAR, NEW DELHI, DELHI 110 065 9.2 THE SAME ADDRESS IS ALSO MENTIONED IN THE SUBSE QUENT CORRESPONDENCE AND EVEN IN THE FORM NO. 35 FILED BE FORE THE UNDERSIGNED. 9.3.1 UNDER SUB SECTION (2) OF SECTION 143 OF THE ACT, THE ASSESSING OFFICER IS REQUIRED TO SERVE UPON THE AS SESSEE A NOTICE BEFORE PROCEEDING TO MAKE ASSESSMENT U/S 143( 3) ONCE RETURN OF INCOME IS FILED FOR A PARTICULAR ASS ESSMENT YEAR WITHIN ON YEAR FROM THE END OF MONTH IN WHICH RETURN WAS FILED. IN THIS CASE THE ASSESSEE FILED A RET URN OF ITA NO. 2452/DEL/2010 5 INCOME ON 19.10.2007. HENCE THE NOTICE U/S 143(2) I S TO BE SERVED ON OR BEFORE 31.10.2008. THUS, A DUE SERVICE OF NOTICE ISSUED UNDER SECTION 143(2) IS NOT A MERE F ORMALITY RATHER IS MANDATORY. 4.1 LD. COMMISSIONER OF INCOME TAX (APPEALS) THEREA FTER ELABORATELY DEALT WITH THE LEGAL ASPECT OF SERVICE OF NOTICE. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER NOTE D THAT THE SAID NOTICE U/S 143(2) DATED 27.9.2008 WAS DISPATCHED THROUGH SPEED POST ON 27.9.2008 ON THE A DDRESS WHICH IS AVAILABLE ON RECORD. THUS, LD. COMMISSION ER OF INCOME TAX (APPEALS) FOUND THAT THERE IS NO DISPUTE WITH REGARD TO ISSUE OF NOTICE U/S 143(2) ON 27.9.2008. IT IS PROPERLY ADDRESSED AS SEEN FROM THE NOTICE ISSUED U /S 143(2). LD. COMMISSIONER OF INCOME TAX (APPEALS) D ID NOT FIND ANY MERIT IN THE AFFIDAVIT FILED BY THE DIRECTO R OF THE ASSESSEE STATING THAT NOTICE WAS NOT RECEIVED ANDS LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT AFTER CAREFUL CONSIDERATION OF THE FACTS BROUGHT ON RECOR D, HE CONCLUDED THAT NOTICE U/S 143(2) WAS ISSUED AND SER VED AS PER THE PROVISIONS OF THE ACT. ON MERITS LD. COMMISS IONER OF INCOME TAX (APPEALS) PROCEEDED TO PARTLY CONFIR M THE ADDITION MADE BY THE ASSESSING OFFICER . 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF MATERIALS PRODUCED AND PRECEDENTS RELIED UPON. LD. COUNSEL OF THE ASSESSEE AT THE THRESHOLD REITERATED THAT THE SAI D NOTICE U/S 143(2) DATED 27.9.2008 WAS NEVER RECEIVED BY THE ITA NO. 2452/DEL/2010 6 ASSESSEE. LD. COUNSEL OF THE ASSESSEE IN THIS REGAR D PRODUCED A PAPER BOOK IN WHICH A COPY OF THE SAID N OTICE DATED 27.9.2008 WAS ATTACHED AT PAGE NO. 12. T HE ADDRESS MENTIONED IN THE SAID NOTICE READS AS UNDER :- M/S VITIR CHATTEL PVT. LTD. NULON HOUSE, TRIBHUVAN COMPLEX, MATHURA ROAD, NEW DELHI, DELHI 110 065 6.1 THE ASSESSEES CONTENTION IS THAT IN THE RECEIP T OF THE SPEED POST NOTICE, THE ADDRESS DOES NOT CONTAIN TRIBHUVAN COMPLEX, SO THE NOTICE WAS NOT SERVED AT PROPER ADDR ESS. 7. WE HAVE CAREFULLY CONSIDERED THE ISSUE, WE FIND THAT THERE IS DUE AND PROPER RECEIPT OF SPEED POST NOTICE ISSUED ON 27.9.2008 AND ON THE SAME THE ADDRESS OF THE ASSESSE E WAS ALSO GIVEN. MERE ABSENCE OF TRIBHUVAN COMPLEX ON TH E SPEED POST RECEIPT DOES NOT MEAN THAT ADDRESS HAS BE EN WRONGLY MENTIONED ON THE ENVELOPE OF THE NOTICE, A ND MOREOVER, THE ADDRESS MENTIONED IS SUFFICIENT. UND ER THE CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN THE OBJECT ION FILED BY THE ASSESSEE. ACCORDINGLY, WE UPHOLD THE W ELL REASONED ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THE LEGALITY OF THE ISSUE OF NOTICE. ITA NO. 2452/DEL/2010 7 7.1 AS REGARDS THE MERITS OF THE CASE LD. COUNSEL OF THE ASSESSEE CONCEDED THAT HE HAS BEEN FIGHTING ON THE ISSUE OF JURISDICTION AND HENCE HE HAS NOT COOPERATED ON THE ISSUE OF MERITS. HENCE, IN THE INTEREST OF JUSTICE, W E SET ASIDE THE ISSUE OF MERITS TO THE FILES OF THE ASSESS ING OFFICER TO CONSIDER THE SAME AFRESH, AFTER GIVING THE ASSES SEE ADEQUATE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11/3/2011. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 11/3/2011 SRB COPY COPY COPY COPY FORWARDED TO: FORWARDED TO: FORWARDED TO: FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES