M/s Veena Enterprises Ltd., New Delhi V. ACIT, New Delhi

ITA 2517/DEL/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1706 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 15-07-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 30-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Assessee Lawyers: UDIT NARESH
• Keywords: Reopening of assessment; Capital asset; Additional evidence; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings; Capital expenditure
• Section: 143(3); 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. H. S. SIDHU, JM ITA NO. 2517 /DEL /20 1 3 : ASSTT. YEAR : 200 4 - 0 5 M/S VEENA ENTERPRISES LTD., 81, VIGYAN VIHAR, NEW DELHI - 110092 VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 17(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A AACV3918K ASSESSEE BY : SH . AJAY VOHRA , SR. ADV. SH. ROHIT GARG, FCA SH. DEEPESH JAIN, CA & SH. UDIT NARESH , ADV. REVENUE BY : SH . J. P. CHANDRAKAR , SR. DR DATE OF HEARING : 1 5 .0 7 .2015 DATE O F PRONOUNCEMENT : 09 . 10 .2015 ORDER PER N.K . SAINI , A.M. THIS IS AN APPEAL BY THE ASSESSEE AGAIN ST THE ORDER DATED 22.01.2013 OF THE L D. CIT(A) - 19 , NEW DELHI. 2. FOLLOWING GROUNDS HA VE BEEN RAISED IN THIS APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT HOLDING THAT THE ORDE R DATED 29.12.2011, PASSED BY THE ASSESSING OFFICER UNDER SECTION 147 OF THE INCOME - TAX ACT, 1961 ( THE ACT ) WAS BEYOND JURISDICTION, BAD IN LAW AND VOID - AB - INITIO. ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 2 1.1 THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THAT THE ALL EGED NOTICE DATED 29.03.2011 ISSUED UNDER SECTION 148 OF THE ACT WAS INVALID AND NO - NEST AS THE SAME WAS ISSUED ON WRONG ADDRESS AND WAS, THUS, NOT SERVED ON THE APPELLANT. 1.2 THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN UP HOLDING THE VALIDITY OF PROCEEDINGS UNDER SECTION 147 WITHOUT APPRECIATING THAT THE SUBSEQUENT NOTICE DATED 25.04.2011 ISSUED UNDER SECTION 148 OF THE ACT FOR INITIATION OF REASSESSMENT PROCEEDINGS WAS BARRED BY LIMITATION AND WAS, THUS, VOID - AB - INITIO. 1 .3 THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN INITIATING PROCEEDINGS UNDER SECTION 147 OF THE ACT WITHOUT FORMING REASON TO BELIEVE THAT INCOME OF THE APPELLANT HAD ESCAPED ASSESSMENT AND WITHOUT SATISFYING OTHER CONDITIONS PRECEDENT FOR INITIATING PROCEEDINGS UNDER THAT SECTION. 2. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE APPELLANT SURREPTITIOUSLY FILED ADDITIONAL EVIDENCE S WITHOUT MOVING NECESSARY APPLICATION FOR ADMISSION OF THE SAME IN TERMS OF RULE 46A OF THE INCOME TAX RULES, 1962. 2.1 THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT NO ADDITIONAL EVIDENCES/DOCUMENTS WER E FILED BY THE ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 3 APPELLANT IN AS MUCH AS ALL EVIDENCES/DOCUMENTS WERE DULY SUBMITTED BEFORE THE ASSESSING OFFICER. 3. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 87,69,732/ - BEING EXPENDITURE INCURRED BY THE APPELLANT FOR COMPLETING CIVIL WORK ORDER GRANTED BY GOVERNMENTS OF UTTAR PRADESH AND UTTARANCHAL FOR CONSTRUCTION OF ROADS, HOLDING THE SAME BE CAPITAL EXPENDITURE. 3.1 THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT AFORESAID EXPENDITURE NEITHER BROUGHT INTO EXISTENCE ANY CAPITAL ASSET NOR PROVIDED ANY ENDURING BENEFIT TO THE APPELLANT IN AS MUCH AS THE APPELLANT DOES NOT OWN THE ROADS SO CONSTRUCTED. THE APPELLANT CRAVES LEAVE TO ADD, AL TER, AMEND OR VARY FROM ALL OR ANY GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING. 3. VIDE GROUND NOS. 1 TO 1.3 THE GRIEVANCE OF THE ASSESSEE RELATES TO THE PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON ACC OUNT OF NON - SERVICE OF THE NOTICE ISSUED U/S 148 OF THE ACT. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE ORIGINALLY FILED THE RETURN OF INCOME ON 01.11.2004 DECLARING INCOME OF RS. 4,81,670/ - . SUBSEQUENTLY, THE CASE WAS REOPENED U/S 147 OF THE ACT BY ISSUING NOTICE DATE D ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 4 29.03.2011 U/S 148 OF THE ACT, ON THE BASIS OF CLAIM OF AN EXPENDITURE OF RS. 87,69,732/ - ON ACCOUNT OF SITE EXPENSES WHICH WERE CONSIDERED AS CAPITAL EXPENDITURE BY THE AO . THE ASSESSEE FILED THE OBJECTION REGARDING INITIATION OF PROCEEDINGS U/S 148 OF THE ACT AND STATED THAT THOSE PROCEE DINGS WERE BARRED BY LIMITATION, T HE ASSESSEE SUMMARIZED ITS SUBMISSION AS UNDER: I) THAT FOR VALID REOPENING OF ASSESSMENT AFTER FOUR YEARS, THE ASSESSING OFFICER SHOULD HAVE REASON TO BELIEVE T HAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT BY REASON OF OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. IT IS A CONDITION PRECEDENT FOR ASSUMPTION OF JURISDICTION UNDER SEC TION 147(A). II) THE CONDITION THAT THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT IS QUESTION OF JURISDICTION, A VITAL THING WHICH CAN ALWAYS BE INVESTIGATED BY COURT. THE WORDS HAVE REASON TO BELIEVE IN SECTION 147 ARE STRONGER THAN THE WORDS IS SATISFIED . THE BELIEF ENTERTAINED BY THE ASSESSING OFFICER MUST NOT BE ARBITRARY OR IRRATIONAL. IT MUST BE REASONABLE OR, IN OTHER WORDS, IT MUST BE BASED ON REASONS WHICH ARE RELEVANT AND MATERIAL. III) T HE REASON TO BELIEVE DOES NOT MEAN REASON TO SUSPECT . THE EXPRESSION REASON TO BELIEVE IN SECTION 147 DOES NOT MEAN PURELY SUBJECTIVE SATISFACTION ON THE PART OF THE ASSESSING OFFICER. THE ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 5 BELIEF MUST BE HELD IN GOOD FAITH; IT CANNOT BE MERELY A PRET ENCE. THERE MUST BE A RATIONAL CONNECTION BETWEEN THE REASONS FOR THE BELIEF AND THE RELEVANT MATERIAL. IV) THE BELIEF OF THE OFFICER SHOULD NOT BE A PRODUCT OF IMAGINATION OR SPECULATION. THERE MUST BE REASON TO INDUCE THE BELIEF. THE BELIEF MUST BE OF A N HONEST AND REASONABLE PERSON BASED UPON REASONABLE GROUNDS. V) THE OFFICER MAY ACT ON DIRECT OR CIRCUMSTANTIAL EVIDENCE; BUT HIS BELIEF MUST NOT BE BASED ON MERE SUSPICION, GOSSIP OR RUMOR. VI) THE BELIEF THAT IS REQUIRED FOR REOPENING OF ASSESSMENT IS THAT OF THE ASSESSING OFFICER. THE SUFFICIENCY OF REASONS FOR THE BELIEF CANNOT BE INVESTIGATED BY THE COURT. VII) AT THE TIME OF ISSUING OF REASSESSMENT NOTICE, IT IS NOT NECESSARY FOR THE ASSESSING OFFICER TO COME TO A CONCLUSIVE FINDING THAT THE INCOM E ESCAPED ASSESSMENT. SUCH BELIEF OBVIOUSLY AT THAT STAGE IS A TENTATIVE BELIEF ON THE MATERIAL BEFORE HIM TO BE EXAMINED AND SCRUTINIZED ON SUCH EVIDENCE AS MAY BE AVAILABLE IN THE PROCEEDINGS FOR REASSESSMENT. BUT THERE MUST BE SOME GROUND FOR REASONABLE BELIEF THAT THERE HAD BEEN A NON - DISCLOSURE ETC. OF MATERIAL FACTS RESULTING IN ESCAPEMENT OF INCOME. VI II) FOR DETERMINING WHETHER INI TIATION OF REASSESSMENT PROCEEDING WAS VALID, IT IS ONLY TO BE SEEN WHETHER THERE WAS PRIMA FACIE SOME MATERIAL ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 6 ON THE BASIS OF WHICH THE DEPA RTMENT COULD REOPEN THE CASE. IX) THE SUFFICIENCY OR THE CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS STATE. SINCE THE BELIEF IS THAT THE ASSESSING OFFICER, THE SUFFICIENCY OF THE REASONS OF FORMING THE BELIEF IS NOT FOR THE COURT TO JUDGE, BUT IT IS OPEN TO THE ASSESSEE TO ESTABLISH THAT THERE, IN FACT, EXISTED NO BELIEF OR THAT THE BELIEF WAS NOT AT ALL A BONA FIDE ONE OR WAS BASED ON VAGUE, IRRELEVANT AND NON - SPECIFIC INFORMATION. 5. THE REFERENCE WAS M ADE TO FOLLOWING CASE LAWS: JOHRI LAL (HUF) VS CIT (1973) 38 ITR 439 (SC) ITO VS LAKHMANI MEWAL DAS (1976) 103 ITR 437 (SC) CIT VS T S PLP CHIDAMBARAM CHATTIER (1971) 80 ITR 467 (SC) H A HANJI & CO. VS ITO (1979) 120 ITR 593 (CAL) SHEO NATH SING VS AAC (1 971) 82 ITR 147 (SC) SHRI KRISHNA (P) LTD. VS ITO (1996) 221 ITR 538 (SC) RAYMOND WOOLLEN MILLS LTD. VS ITO (1999) 236 ITR 34 (SC) S. NARAYANPPA VS CIT (1967) 63 ITR 219 AT PAGE 222 (SC) GANGA SARAN & SONS (P) LT D. VS ITO (1981) 130 ITR 1 (SC) PHOOL CHAND BAJRANG LAL VS ITO (1993) 203 ITR 456 AT 477 (SC) ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 7 6. THE AO DID NOT FIND MERIT IN THE OBJECTIONS OF THE ASSESSEE AND OBSERVED THAT THE ASSESSEE INCURRED THE FOLLOWING EXPENSES UNDER THE HEAD ADMINISTRATIVE EXPENSES: S. NO. EXPENSES DETAILS AMOUNT IN RS . 1. MATERIAL PURCHASES 10,22,216 2. LABOUR CHARGES AND CARTAGE 33,53,479 3. FUEL AND OTHER CONSUMABLE 10,47,002 4. HIRE CHARGES PAID 4,11,972 5. PERSONNEL EXPENSES 17,95,310 6. ADMINISTRATIVE EXPENSES 10,38,678 7. RATE, TAXES 1,01,075 GROSS TOTAL 87,69,732 7. ACCORDING TO THE AO THE ASSESSEE COULD NOT GIVE A SATISFACTORY REPLY REGARDING THE ALLOWABILITY OF THE ABOVE EXPENDITURE. HE THEREFORE, MADE THE ADDITION OF RS. 87,69,732/ - . 8. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CI T(A) AND CHALLENGED THE REOPENING BY STATING THAT THE NOTICE U/S 148 OF THE ACT WAS NOT SERVED ON THE CORRECT ADDRESS AND THAT NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED . THE LD. CIT(A) FORWARDED THE SUBMISSIONS OF THE ASSESSEE TO THE AO FOR HIS COMMENTS O N THE CLAIM OF THE ASSESSEE THAT NO ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 8 NOTICE U/S 143(2) OF THE ACT HAD BEEN SERVED IN THIS CASE. THE AO VIDE HIS REMAND REPORT DATED 10.12.2012 STATED AS UNDER: KINDLY REFER TO YOUR LETTER NO. CIT(A) - 19/VEENA ENTERPRISES/2012 - 13/651 DATED 16.11.2012 ON THE ABOVE MENTIONED SUBJECT CALLED FOR COMMENTS IN THE CASE. AS PER INCOME TAX 46(A): (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE CIT(A), ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE O F PROCEEDINGS BEFORE THE ASSESSING OFFICER EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY: - (A) WHERE THE AO HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED: OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE E VIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE AO; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFI CIENT CAUSE FROM PRODUCING BE FORE THE AO ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR (D) WHERE THE AO HAS MADE THE ORDER APPEALED AG AINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 9 (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB - RULE (1) UNLESS THE CIT(A) RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3) THE CIT(A) SHAL L NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB - RULE (1) UNLESS THE AO HAS BEEN ALLOWED A REASONABLE OPPORTUNITY. (A) TO EXAMINE THE EVIDENCE OR DOCU MENT OR TO CROSS - EXAMINE THE WITNESS PRODUCED BY THE APPELLANT; OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER THE CIT(A) TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANT IAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MOTION OR ON THE REQUEST OF THE AO UNDER CLAUSE (A) OF SUB - SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271. THERE IS NOTHING IN THE RECORD/SUBMIS SION OF THE ASSESSEE THAT WHAT PREVENTED HIM FROM FURNISHING THE EVIDENCE NOW FURNISHED. REASONS ARE NOT THERE AS TO WHAT PREVENTED THE ASSESSEE FROM FILING THE PRESENT EVIDENCE NOW INSTEAD OF AT TIME OF ASSESSMENT. IN THIS REGARD, IT IS SUBMITTED THAT T HE BILLS SUBMITTED BY THE ASSESSEE AT PAGE NO. 1 TO 124 WITH HIS LETTER DATED 2.12.2011 HAVE NOT BEEN SUBMITTED ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 10 IN THE HEARING CONDUCTED ON 22.12.2011. FURTHER, THE NOTICE U/S 142(1) DATED 17.8.2011 WAS SENT BY SPEED POST (COPY ENCLOSED). THE ASSESSEE S CO UNSEL REQUESTED FOR COPY OF REASONS WHICH WAS SUPPLIED TO HIM BY HAND ON 02.09.2011. COPY OF THE ORDER SHEET IN THIS REGARD IS ENCLOSED. FURTHER, THE AO HAS RECORDED THE REASONS IN WHICH SATISFACTION FOR RE - OPENING THE CASE AND APPROVAL AS REQUIRED ON THE ADD. CIT WAS ALSO OBTAINED (COPY ENCLOSED). WITH REGARD TO THE ASSESSEE S SUBMISSION THAT HIS ADDRESS HAS BEEN CHANGED FROM BARAKHAMBA ROAD, NEW DELHI TO THE ADDRESS MENTIONED BY HIM. A QUERY FROM THE PAN DIRECTORY SHOWS STILL THE ADDRESS AT BARAKHAMBA RO AD, NEW DELHI. HENCE, THE AO HAD RIGHTLY ISSUED THE NOTICE AT THE BARAKHAMBA ROAD, NEW DELHI ADDRESS. FURTHER, THE ASSESSEE FILED LETTER DATED 28.11.2011 IN THIS OFFICE ON 13.12.2011 THAT HIS ADDRESS AS FURTHER CHANGED TO 81, VIGYAN VIHAR, NEW DELHI - 110092 ON WHICH THE ORDER U/S 148 WAS PASSED. THE ASSESSEE HAS CONTENDED THAT NO NOTICE U/S 143(2) HAS BEEN ISSUED. IN THIS REGARD, COPY OF THE NOTICE U/S 142(1) WAS ISSUED ON 17.08.2011 BY SPEED POST (COPY OF THE NOTICE AND THE SPEED POST RECEIPT IS ENCLOSED). IN THIS REGARD, THE ASSESSEE NEVER COMPLIED WITH NOTICE U/S 148 EITHER BY RESPONDING TO IT OR BY FILING A RETURN OF INCOME. FURTHER, ALSO IN TERMS OF SECTION 292BB THE ORDER IS PASSED ACCORDING TO THE INTENT AND PURPOSE OF THE I.T. ACT, 1961. HENCE THE N OTICE U/S 143(2) WAS RIGHTLY NOT ISSUED AND NOTICE U/S 142(1) WAS ISSUED AS MENTIONED ABOVE. ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 11 IN LIGHT OF THE ABOVE, YOU ARE REQUESTED TO KINDLY REJECT THE SO CALLED ADDITIONAL EVIDENCE FILED AND CONFIRMED THE ADDITION MADE IN THE ASSESSMENT ORDER (THE COPY OF THE ORDER SHEET IS ENCLOSED). 9. THE AO ALSO SUBMITTED AS UNDER: 2.3 WITH REGARD TO THE ASSESSEE S SUBMISSION THAT HIS ADDRESS HAS BEEN CHANGED FROM BARAKHAMBA ROAD, NEW DELHI TO THE ADDRESS MENTIONED BY HIM. A QUERY FROM THE PAN DIRECTORY SHOW S STILL THE ADDRESS AT BARAKHAMBA ROAD, NEW DELHI AND EVEN THE RETURN FILED FOR A.Y. 2004 - 05 BEARS THE ADDRESS OF BARAKHAMBA ROAD, NEW DELHI. HENCE, THE AO HAD RIGHTLY ISSUED THE NOTICE AT THE BARAKHAMBA ROAD, NEW DELHI ADDRESS. FURTHER, THE ASSESSEE FILED LETTER DATED 28.11.2011 IN THIS OFFICE ON 13.12.2011 THAT HIS ADDRESS AS FURTHER CHANGED TO 81, VIGYAN VIHAR, NEW DELHI - 110092 ON WHICH THE ORDER U/S 148 WAS PASSED. 10. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND RE PORT OF THE AO , DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED AS UNDER: IT IS CLEAR FROM THE ABOVE THAT THE NOTICE UNDER SECTION 148 WAS ISSUED AT THE ADDRESS AVAILABLE WITH THE AO. IF THERE WAS A CHANGE IN HIS ADDRESS, IT WAS FOR TH E APPELLANT TO INTIMATE THE CHANGE TO THE AO. IN HIS REMAND REPORT, THE AO HAS POINTED OUT THAT IT WAS ONLY ON 13.12.2011 THAT THE APPELLANT FILED A LETTER INTIMATING THE CHANGE IN ADDRESS. AS THE NOTICE UNDER SECTION 148 WAS ISSUED ON 29.3.11, THE AO ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 12 CAN HARDLY BE FAULTED FOR SENDING THE NOTICE TO THE AVAILABLE ADDRESS. IT MAY HAVE BEEN A DIFFERENT MATTER IF THE NOTICE HAD BEEN SENT TO THE ADDRESS OF ANOTHER PERSON HOWEVER, IN THIS CASE ALL THAT CAN BE SAID AT BEST, IS THAT THE NOTICE WAS SENT TO THE ADDRE SS OF THE APPELLANT ON THE AO S RECOR D, AND THE APPELLANT S ADDRESS HAD CHANGED SUBSEQUENTLY. IN THE ASSESSMENT ORDER, THE AO HAS OBSERVED THAT CASE OF THE CAPTIONED ASSESSMENT YEAR WAS REOPENED U/S 147 BY ISSUE OF NOTICE U/S 148 DATED 29.03.2011. IN RESP ONSE TO THE NOTICE ISSUED, SH. SANJAY GARG, AR OF THE ASSESSEE ATTENDED AND FILED HIS REPLY . THIS SHOWS THAT THE APPELLANT PARTICIPATED IN ASSESSMENT PROCEEDINGS AND HAD THE OPPORTUNITY TO EXPLAIN HIS CASE. IN THESE FACTS, ANY CHANGE OF ADDRESS DOES NOT W ARRANT QUASHING OF THE NOTICE U/S 148 AND CONSEQUENT ASSESSMENT. IN VIEW OF THE ABOVE, THE APPELLANT S ARGUMENT THAT NO NOTICE UNDER SECTION 148 WAS SERVED AND THEREFORE, REASSESSMENT DESERVES TO BE QUASHED, IS NOT ACCEPTABLE. 11. THE RELIANCE WAS PL ACED ON THE FOLLOWING CASE LAWS: CIT VS JAGAT NOVEL EXHIBITORS (P.) LTD. (2012) 18 TAXMANN.COM 138 (DEL) CIT VS THREE DEE EXIM P. LTD. (2012) 20 TAXMANN.COM 146 (DEL) CIT VS VISION INC. (2012) 21 TAXMANN.COM 515 (DEL) I. M. CONSTRUCTIONS P. LTD. VS CIT (2 012) 24 TAXMANN.COM 162 (DEL) 12. THE LD. CIT(A) ALSO OBSERVED THAT THE REASONS FOR REOPENING WERE GIVEN TO THE ASSESSEE AFTER HE MADE A REQUEST FOR SUPPLY OF THE REASONS. ACCORDING TO HIM THERE WAS NO REQUIREMENT IN LAW THAT THE ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 13 REASONS WERE TO BE COM MUNICATED ALONGWITH THE NOTICE U/S 148 OF THE ACT. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: CIT VS SAFETAG INTERNATIONAL INDIA (P.) LTD. (2012) 332 ITR 622 (DEL) A. G. HOLDINGS (P.) LTD. VS ITO (2012) 207 TAXMAN 117 (DEL) 13. AS REGARDS TO THE OBJECTION OF THE ASSESSEE THAT NO NOTICE U/S 143(2) OF THE ACT HAD BEEN SERVED. T HE LD. CIT(A) OBSERVED THAT SINCE THE ASSESSEE HAD NOT FILED RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT, SO IT WAS NOT NECESSARY TO ISSUE A NOTICE U/S 143(2) OF THE ACT. THE LD. CIT(A) ALSO OBSERVED THAT THE AO DULY ISSUED THE NOTICE U/S 142(1) OF THE ACT. T HE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS RAM NARAYAN BANSAL (2011) 202 TAXMANN 213. 14. NOW THE ASS ESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ORDER U/S 143(1) OF THE ACT WAS PASSED BY THE AO ON 21.12.2004 AND THE NOTICE U/S 148 WAS CLAIMED TO BE ISSUED ON 29.03.2011 AT A WRONG ADDRESS WHICH REMAINED UNSERVED , WAS BEYOND A PERIOD OF SIX YEAR S. THEREFORE, REOPENING WAS NOT VALID WITHOUT SERVING THE NOTICE. IT WAS FURTHER STATED THAT CHANGE IN THE ADDRESS OF THE ASSESSEE WAS IN THE KNOWLEDGE OF THE DEPARTME NT BECAUSE THE ADDRESSEE OF THE ASSESSEE WAS CHANGED IN THE PAN. A ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 14 REFERENCE WAS MADE TO PAGE NO. 3 2 OF THE ASSESSEE S PAPER BOOK WHICH IS THE COPY OF THE ACKNOWLEDGMENT FOR CHANGE OR CORRECTION IN PAN DATA DATED 27.08.2010. IT WAS ALSO STATED THAT THE NOT ICE U/S 143(2) OF THE ACT FOR THE ASSESSMENT YEAR 2009 - 10 WAS ALSO ISSUED BY THE DEPARTMENT AT THE CHANGED ADDRESS, SO IT CANNOT BE SAID THAT THE NEW ADDRESS WAS NOT IN THE KNOWLEDGE OF THE DEPARTMENT. IT WAS CONTENDED THAT THE NOTICE FOR THE YEAR UNDER CO NSIDERATION U/S 148 OF THE ACT WAS NOT ISSUED AT THE NEW ADDRESS, TH EREFORE, WITHOUT SERVING NOTICE, T HE REASSESSMENT FRAMED U/S 147 OF THE ACT WAS NOT VALID. IT WAS FURTHER STATED THAT THE AO HAS NOT ISSUED NOTICE U/S 143(2) OF THE ACT. THEREFORE, THE ASS ESSMENT FRAMED WITHOUT ISSUING THE NOTICE U/S 143(2) OF THE ACT WAS NOT VALID. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: CIT VS HOTEL BLUE MOON 321 ITR 362 (SC) ALPINE ELECTRONICS ASIA PTE. LTD. VS DGIT 341 ITR 247 (DEL) DIT VS V.R. EDUCATIONAL TRUST, ITA 510 /2011 (DEL) ORDER DATED 10.02.2012 CIT VS HUF OF H.H LATE J.M. SCINDIA 300 ITR 193 (BOM) CIT VS MR. SALMAN KHAN, 2362 OF 2009 (BOM) ORDER DATED 01.12.2009 SAPTHAGIRI FINANCE & INVESTMENTS VS ITO, TC(APPEAL) (2012) 210 TAXMAN 78 (MAD) CIT VS A LSTOM T & D INDIA LTD. (2014) 226 TAXMAN 103 (MAD) CIT VS C. PALANIPPAN 284 ITR 257 (MAD) ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 15 CIT VS ADARSH TRAVEL BUS SERVICE 204 TAXMAN 114 (MAG.) (ALL.) RAJ KUMAR CHAWLA 145 TAXMAN 12 (DEL) (SB) ITO VS TILAK RAJ SATIJA, ITA NO. 391/DEL/2010 (DEL) ORDER DAT ED 14.08.2013 SHRI MOHINDER KUMAR CHHABRA VS ITO, ITA NO. 3523/DEL/2013 ORDER DATED 13.12.2013 UKT SOFTWARE TECHNOLOGIES (P) LTD. VS ITO, ITA NO. 4719/DEL/2011 ORDER DATED 16.01.2013 V.R. SREEKUMAR VS ITO 147 TTJ 599 (TM) (COCHIN) 15. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO NEW MATERIAL CAME TO THE KNOWLEDGE OF THE AO AFTER ISSUING THE INTIMATION U/S 143(1) OF THE ACT. THEREFORE, THE REASSESSMENT ORDER PASSED BY THE AO WAS NOT VALID. A REFERENCE WAS MADE TO PAGE NO. 30 OF THE ASSESSEE S PAPER BO OK WHICH IS THE COPY OF THE REASONS RECORDED FOR REOPENING THE ASSESSMENT U/S 147 OF THE ACT. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: CIT VS KELVINATOR OF INDIA LTD. 320 ITR 561 (SC) CIT VS ORIENT CRAFT LTD. 354 ITR 536 (DEL) MOHAN GUPTA (HUF) VS CIT (2014) 366 ITR 115 (DEL) SHIPRA SRIVASTAVA VS ACIT 319 ITR 221 (DEL) TELCO DADAJEE DHACKJEE LTD. VS DCIT, ITA NO. 4613/MUM/2005 (TM) (MUM) ORDER DATED 12.05.2010 16. IT WAS FURTHER SUBMITTED THAT ALL THE INFORMATION WERE FURNISHED BY THE ASSESSEE TO THE AO. THEREFORE, THE REASSESSMENT FRAMED WAS ONLY A CHANGE OF OPINION. ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 16 17. IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND REITERATED THE OBSERVATIONS MADE IN THE IMPUGNED ORDER AND THE ASSESSMENT ORDER D ATED 29.12.2011. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE DID NOT INFORM ABOUT THE CHANGE IN ADDRESS AND THE NOTICE U/S 148 OF THE ACT WAS ISSUED AT THE ADDRESS MENTIONED IN THE RETURN OF INCOME FURNISHED BY THE ASSESSEE. IT WAS FURTHER STATED THAT AS PE R THE PROVISIONS OF SECTION 148 OF THE ACT , T HE ONLY REQUIREMENT IS TO ISSUE THE NOTICE AND NOT THE SERVICE OF NOTICE. IT WAS ALSO STATED THAT AFTER ISSUING THE NOTICE U/S 148 OF TH E ACT, THE ASSESSEE WAS REQUIRED TO FILE THE RETURN WHICH IS MANDATORY AS P ER THE EXPLANATION APPENDED TO SECTION 148 OF THE ACT. IT WAS FURTHER STATED THAT ISSUANCE OF NOTICE U/S 143(2) OF THE ACT IS REQUIRED ONLY WHEN RETURN OF INCOME IS FILED BUT IN THIS CASE THE ASSESSEE DID NOT FILE ANY RETURN IN RESPONSE TO THE NOTICE U/S 1 48 OF THE ACT. THEREFORE, THE RE ASSESSMENT FRAMED BY THE AO U/S 147 OF THE ACT WAS JUSTIFIED. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE DID NOT FURNISH THE RELEVANT DOCUMENTS. A REFERENCE WAS MADE TO PARA 3.3 OF THE LD. CIT(A) S ORDER WHEREIN IT IS MENTIO NED THAT IN THE REMAND REPORT THE AO HAD POINTED OUT THAT THE ASSESSEE HAD GIVEN NO EXPLANATION REGARDING AS TO WHY THE DOCUMENTS WERE NOT FILED DURING THE ASSESSMENT PROCEEDINGS AND THAT NO REQUEST HAD BEEN MADE FOR ADMISSION OF THE ADDITIONAL EVIDENCES. THE LD. DR ALSO SUBMITTED THAT THE AO ISSUED THE INTIMATION U/S 143(1) OF THE ACT, THEREFORE, IT CANNOT BE SAID THAT HE ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 17 APPLIED HIS MIND WHILE ISSUING THE SAID INTIMATION . IT WAS CONTENDED THAT WHEN THE AO CAME TO THE CONCLUSION THAT INCOME HAD ESCAPED THE RE WAS PROPER APPLICATION OF MIND. THEREFORE, THE NOTICE ISSUED U/S 148 OF THE ACT WAS AFTER FORMING THE OPINION THAT THE INCOME ESCAPED THE ASSESSMENT AS SUCH THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS FULLY JUSTIFIED. 18. WE HAVE CO NSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE NOTICE U/S 143(2) OF THE ACT WAS NOT ISSUED BEFORE FRAMING THE ASSESSMENT U/S 147 R.W.S 143(3 ) OF THE ACT. THIS FACT HAS ALSO BEEN ADMITTED BY THE AO IN HIS REMAND REPORT DATED 10.12.2012. ON A SIMILAR ISSUE THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ALPINE ELECTRONICS ASIA PTE. LTD. VS DGIT AND ORS. (SUPRA) HELD AS UNDER: SECTION 143( 2) OF THE INCOME - TAX ACT, 1961, IS APPLICABLE TO PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. THE PROVISO TO SECTION 148 OF THE ACT GRANTS LIBERTY TO THE REVENUE TO SERVE NOTICE UNDER SECTION 143(2) OF THE ACT BEFORE PASSING THE ASSESSMENT ORDER FOR RETUR NS FURNISHED ON OR BEFORE OCTOBER 1, 2005. IN RESPECT OF RETURNS FILED PURSUANT TO NOTICE UNDER SECTION 148 OF THE ACT AFTER OCTOBER 1, 2005, IT IS MANDATORY TO SERVE NOT ICE UNDER SECTION 143(2) OF THE ACT, WITHIN THE STIPULATED TIME LIMIT. SECTION 292BB I NCORPORATES THE PRINCIPLE OF ESTOPPELS. IT STIPULATES THAT AN ASSESSEE, WHO HAS APPEARED IN ANY PROCEEDING AND CO - OPERATED IN ANY ENQUIRY RELATING TO ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 18 ASSESSMENT OR REASSESSMENT SHALL BE DEEMED TO BE SERVED WITH ANY NOTICE WHICH WAS REQUIRED TO BE SERVED AN D WOULD BE PRECLUDED FROM OBJECTING THAT THE NOTICE WAS NOT SERVED UPON HIM OR WAS SERVED UPON HIM IN AN IMPROPER MANNER OR WAS NOT SERVED UPON HIM IN TIME. HOWEVER, THE PROVISO STATES THAT THE PRINCIPLE OF ESTOPPELS INCORPORATED IN THE MAIN SECTION WOULD NOT APPLY, IF THE ASSESSEE HAS RAISED OBJECTION IN REPLY TO THE NOTICE BEFORE COMPLETION OF ASSESSMENT OR REASSESSMENT. 19. IN THE PRESENT CASE ALSO THE AO WAS REQUIRED TO SERVE THE NOTICE U/S 143(2) OF THE ACT BEFORE PASSING THE ASSESSMENT ORDER U/S 14 7 OF THE ACT WITHIN STIPULATED TIME LIMIT BUT NO SUCH NOTICE HAS BEEN ISSUED TO THE ASSESSEE . THEREFORE, THE REASSESSMENT FRAMED VIDE ORDER DATED 29.12.2011 WAS NOT VALID. MOREOVER, FROM THE REASONS RECORDED , COPY OF WHICH IS PLACED AT PAGE NO. 30 OF THE A SSESSEE S PAPER BOOK. IT IS CLEAR THAT THE AO HIMSELF ADMITTED THAT THE ASSESSEE HAD CLAIMED AND WAS ALLOWED AN EXPENDITURE OF RS. 87,69,732/ - ON ACCOUNT OF SITE EXPENSES IN THE PROFIT AND LOSS ACCOUNT WHICH WERE OF CAPITAL IN NATURE. S O , NO NEW MATERIAL C AME IN POSSESSION OF THE AO FOR ISSUING THE NOTICE U/S 148 OF THE ACT. ON A SIMILAR ISSUE THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS ORIENT CRAFT LTD. (SUPRA) HELD AS UNDER: THE EXPRESSION REASON TO BELIEVE CANNOT HAVE TWO DIFFERENT ST ANDARDS OR SETS OF MEANING, ONE APPLICABLE WHERE THE ASSESSMENT WAS EARLIER MADE UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961, AND ANOTHER APPLICABLE WHERE AN INTIMATION WAS EARLIER ISSUED UNDER SECTION 143(1). IT ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 19 FOLLOWS THAT IT IS OPEN TO THE ASSESSE E TO CONTEND THAT NOTWITHSTANDING THAT THE ARGUMENT OF CHANGE OF OPINION IS NOT AVAILABLE TO HIM, IT WOULD STILL BE OPEN TO HIM TO CONTEST THE REOPENING ON THE GROUND THAT THERE WAS EITHER NO REASON TO BELIEVE OR THAT THE ALLEGED REASON TO BELIEVE IS NOT RELEVANT FOR THE FORMATION OF THE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN DOING SO, IT IS FURTHER OPEN TO THE ASSESSEE TO CHALLENGE THE REASONS RECORDED UNDER SECTION 148(2) ON THE GROUND THAT THEY DO NOT MEET THE STANDARDS SET IN THE VARIOUS JUDICIAL PRONOUNCEMENTS. 20. IN THE PRESENT CASE ALSO THE AO ACCEPTED THE RETURN U/S 143(1) OF THE ACT AND THEREAFTER ISSUED THE NOTICE U/S 148 OF THE ACT BUT THERE WAS NOTHING IN THE REASON RECORDED TO SHOW THAT ANY TANGIBLE MATERIAL HAD CO ME INTO HIS POSSESSION SUBSEQUENT TO THE ISSUE OF THE INTIMATION U/S 143(1) OF THE ACT . IN THE INSTANT CASE, IT IS ALSO RELEVANT TO POINT OUT THAT THE NOTICE DATED 29.03.2012 ISSUED U/S 148 OF THE ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. ASSESS MENT YEAR 2004 - 05 WAS ISSUED AT THE ADDRESS 81, VIGYAN VIHAR, NEW DELHI - 110092 WHEREAS THE NEW ADDRESS OF THE ASSESSEE WAS 626, DLF TOWER - B, JASOLA VIHAR, NEAR APPOLO HOSPITAL, NEW DELHI, WHICH IS ALSO CLEAR FROM THE NOTICE DATED 10.09.2010 U/S 143(2) OF T HE ACT ISSUED TO THE ASSESSEE FOR THE ASSESSMENT YEAR 2009 - 10, COPY OF WHICH IS PLACED AT PAGE NO. 30 OF THE ASSESSEE S PAPER BOOK. THEREFORE, WITHOUT ISSUING THE NOTICE U/S 148 OF THE ACT ON THE PROPER ADDRESS TO THE ASSESSEE , THE ASSESSING AUTHORITY DID NOT HAVE ITA NO. 2517 /DE L/20 1 3 VEENA ENTERPRISES LTD. 20 JURISDI CTION TO PROCEED FURTHER AND MAK E THE ASSESSMENT WHEN THE NOTICE U/S 143(2) OF THE ACT WAS NOT ISSUED AT ALL AND THE NOTICE U/S 148 OF THE ACT WAS ISSUED AT A WRONG ADDRESS. WE, THEREFORE, KEEPING IN VIEW THE FACTS OF THE PRESENT CASE AND T HE VARIOUS JUDICIAL PRONOUNCEMENT AS DISCUSSED HEREINABOVE ARE OF THE VIEW THAT THE REASSESSMENT ORDER DATED 29.12.2011 PASSED U/S 147/143(3) OF THE ACT WAS NOT VALID, ACCORDINGLY THE SAME IS QUASHED. 21 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D. ( ORDER PRON OUNCED IN THE COURT ON 09 /10 / 2015) . SD/ - SD/ - ( H. S. SIDHU ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09 / 10 /2015 * SUBODH * COPY FORWARDED TO: 1. APPEL LANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR