Shri Janakbhai Ramjibhai Patel, Surat V. The Jt. CIT, Special Range-2, Surat

ITA 27/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7238 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 03-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST IMPUGNED PASSED
• Keywords: Reopening of assessment; Invalid notice; Validity of assessment; Capital receipt
• Section: 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER ITA NO.27/AHD/2017 ASSESSMENT YEAR: 1988-89 JANAKBHAI RAMJIBHAI PATEL L/H OF LATE RAMJIBHAI S.PATEL, D-704, GREEN ARCADE, L.P.SAVANI ROAD, ADAJAN, SURAT 395 009. [PAN: ACFPL 2751 E] VS. THE JOINT COMMISSIONER OF INCOME-TAX, SPECIAL RANGE-2, SURAT. (APPELLANT) (RESPONDENT) ORDER PER H.S. SIDHU, JM: THIS APPEAL FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER PASSED BY THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-I, SURAT DATED 14.03.2016 PERTAINING TO ASSESSMENT YEAR 1988-89. 2. GROUND RAISED BY THE ASSESSEE READS AS UNDER: (I) VALIDITY OF ASSESSMENT ORDER: (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE HELD REOPENING BAD IN LAW AS THE NOTICE U/S. 148 WAS ISSUED IN THE NAME OF DEAD PERSON AND THE ASSESSMENT ON THE BASIS OF THE ABOVE WAS AB IGNITION VOID. (2) THE APPELLANT SUBMITS THAT THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) WAS NOT JUSTIFIED IN NOT CONSIDERING THE EVIDENCE FURNISHED IN RESPECT OF DEATH OF LATE RAMANBHAI PATEL PARTICULARLY WHEN DEATH CERTIFICATE WAS FURNISHED. ASSESSEE BY SHRI HIREN R. VEPARI CA DEPARTMENT BY SHRI R.P.RASTOGI SR.DR DATE OF HEARING 18.07.2019 DATE OF PRONOUNCEMENT 19.07.2019 2 (3) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT JUSTIFIED IN IGNORING THE EVIDENCE FILED BY THE APPELLANT IN THE COURSE OF ASSESSMENT PROCEEDINGS. (II) MISCELLANEOUS: THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR VARY ANY OF THE GROUNDS OF APPEAL. 3. THE ORIGINAL ORDER OF THE JOINT COMMISSIONER OF INCOME-TAX, SPECIAL RANGE-2, SURAT PASSED ON 27.03.2000 U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 WHICH WAS CONFIRMED BY THE LD.CIT(A). 4. THE ASSESSEE PREFERRED AN APPEAL AGAINST THE ORDER OF LD.CIT(A) BEFORE THE ITAT. THE ITAT IN ITA NO.2660/AHD/2002 FOR A.Y. 1988- 89 VIDE ORDER DATED 08.01.2010 HAS RESTORED BACK MATTER TO THE LD.CIT(A) FOR DECISION FRESH. IN THE COMPLIANCE OF THE SAME THE LD.FIRST APPELLATE AUTHORITY DISMISSED THE APPEAL FILED BY THE ASSESSEE VIDE IMPUGNED ORDER DATED 14.03.2016. 5. ASSESSEE AGGRIEVED BY THE ORDER DATED 14.03.2016 FILED THE PRESENT APPEAL ON THE GROUNDS MENTIONED ABOVE. 6. AT THE TIME OF HEARING, THE LD.COUNSEL FOR THE ASSESSEE STATED THAT THE LD.CIT(A) OUGHT TO HAVE HELD REOPENING BAD IN LAW AS THE NOTICE U/S.148 OF THE INCOME TAX ACT WAS ISSUED IN THE NAME OF DEAD PERSON AND THE ASSESSMENT ON THE BASIS OF THE INVALID NOTICE IS ALSO VOID AB INITIO. HE FURTHER STATED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN NO CONSIDERING THE EVIDENCE FURNISHED IN RESPECT OF DEATH OF LATE SHRI RAMJIBHAI S. PATEL, PARTICULARLY WHEN DEATH CERTIFICATE WAS 3 FURNISHED AS WELL AS NOT JUSTIFIED IN IGNORING THE EVIDENCE FILED BY THE ASSESSEE IN THE FORCE OF ASSESSMENT PROCEEDINGS. IN SUPPORT OF HIS CONTENTION, HE DRAW OUR ATTENTION TOWARDS THE ORDER PASSED BY THE ASSESSING OFFICER PASSED U/S.143(3) R.W.S 147 OF THE INCOME TAX ACT AND VARIOUS DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE IN THE SHAPE OF PAPER BOOK CONTAINING IN PAGE 1 TO 165 PAGES IN WHICH THE LD.COUNSEL HAS ATTACHED VARIOUS DOCUMENTARY EVIDENCE SUPPORTING HIS ARGUMENT ADVANCED BY HIM BEFORE THE ASSESSING OFFICER, LD.CIT AS WELL AS BEFORE US. 7. HE FURTHER STATED THAT THIS IS THE SECOND ROUND BEFORE THE TRIBUNAL. IN THE FIRST ROUND, THE TRIBUNAL VIDE PARA 8.1 OF THE ORDER PAGE NO. 25 AND 26 RELEVANT FINDING OF PAGE 26 SET-ASIDE THE MATTER TO THE LD.FIRST APPELLATE AUTHORITY. SINCE THE LD.FIRST APPELLATE AUTHORITY HAD NOT DEALT WITH THE GROUNDS OF VALIDITY OF REOPENING OF ASSESSMENT AND SERVICE OF NOTICE U/.148 OF THE INCOME TAX ACT. THE LD.CIT(A) DECIDED THE MATTER AGAINST THE ASSESSEE AND AGAINST WHICH THE ASSESSEE PREFERRED THE PRESENT APPEAL. 8. THE ONLY GROUND ON WHICH THE ASSESSEE CONTESTED THE APPEAL IN RESPECT OF VALIDITY OF THE ASSESSMENT AS NOTICE U/S.148 WAS ISSUED ON THE NAME OF A DEAD PERSON, LATE SHRI RAMJIBHAI S. PATEL WHO WAS A PARTNER IN BHARAT VIJAY CONTRACTION CO. PVT LTD., WHICH WAS DISSOLVED. HOWEVER, ALONG WITH OTHER THREE PARTNERS, HE RECEIVED SHARE OF ARBITRATION AWARD BY THE GOVERNMENT WHICH HE TREATED AS CAPITAL RECEIPT AND THE ASSESSING OFFICER PROCESSED THE RETURN BY ORDER DATED 4 09.03.1990 U/S.143(1) OF THE ACT, ACCEPTING THE RETURN FILED BY THE ASSESSEE. THEREAFTER, BY ORDER U/S.155 OF THE ACT DATED 24.03.1992 THE ASSESSING OFFICER PASSED ORDER ENHANCING INCOME ALONG WITH THE RETURN OF INCOME. THE ASSESSEE HAD DISCLOSED THE PROFIT AND LOSS ACCOUNT AND CAPITAL ACCOUNT SHOWING THE RECEIPT OF ARBITRATION AWARD. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE U/S.148 OF THE INCOME TAX ACT DATED 13.03.1997 AND REOPENED THE ASSESSMENT. ON LETTER DATED 12.04.1997 WAS RETURNED TO THE ASSESSING OFFICER WHICH WAS RECEIVED BY HIM ON 15.04.1997 REGARDING DEATH OF SHRI RAMJIBHAI S. PATEL IN THE JANUARY 1996 AND REQUESTED THE ASSESSING OFFICER THAT NOTICE WAS BAD IN LAW. 9. THE LD.COUNSEL FOR THE ASSESSEE FURTHER STATED THAT THE ASSESSING OFFICER AGAIN ISSUED NOTICE U/S.148 OF THE ACT DATED 26.03.1999 TO SHRI RAMJIBHAI S. PATEL WHO HAD ALREADY EXPIRED IN THE JANUARY 1996. DESPITE INFORMATION RELATING THERETO WAS GIVEN VIDE LETTER DATED 12.04.1997. THE ASSESSING OFFICER AGAIN WAS INFORMED ON 30.04.1999 ABOUT THE EXPIRY OF SHRI RAMJIBHAI S. PATEL, BUT NO ACTION HAS BEEN TAKEN BY THE ASSESSING OFFICER. THE LEGAL HEIR OF THE ASSESSEE ALSO INFORMED TO THE ASSESSING OFFICER MANY TIMES ABOUT THE DEATH OF SHRI RAMJIBHAI S. PATEL ALONG WITH DEATH CERTIFICATE FROM THE BHAVNAGAR MUNICIPALITY CORPORATION SHOWING THAT THE ASSESSEE HAS EXPIRED ON 24.01.1996. THE PROCEEDINGS SHOULD BE DROPPED AT THAT POINT BY THE ASSESSING OFFICER. LETTER DATED 31.12.1999 ASKED FOR DETAILS ABOUT DEATH CERTIFICATE. AGAIN LEARNED HEIR OF THE ASSESSEE HAS GIVEN REPLY DATED 10.01.2000 AS EARLIER BEEN GIVEN. 5 10. INSPITE OF THE FACT STATED ABOVE, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT ON THE BASIS OF INVALID NOTICE ISSUED IN THE NAME OF DEAD PERSON AND COMPLETED THE ASSESSMENT IN THE NAME OF LEGAL HEIR OF THE SHRI RAMJIBHAI S. PATEL WITHOUT ISSUING NOTICE IN THE NAME OF HIS LEGAL HEIRS. 11. THE LD.COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSMENT PASSED U/S.143 / 147 OF THE ACT IS VOID AB INITIO AND MAY BE CANCELLED BY ACCEPTING APPEAL FILED BY THE ASSESSEE. IN SUPPORT OF HIS CONTENTION, HE HAS CITED VARIOUS JUDGMENT WHICH HE HAS FILED IN HIS PAPER BOOK. 12. THE LD.DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER PASSED BY THE LD.FIRST APPELLATE AUTHORITY AND STATED THAT LEGAL HEIR OF THE ASSESSEE HAS JOINED THE ASSESSMENT PROCEEDINGS AND THEREFORE ORDER PASSED BY THE REVENUE AUTHORITY IS AS PER LAW AND APPEAL FILED BY THE REVENUE AUTHORITY IS AS PER LAW AND APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD AVAILABLE, ESPECIALLY ORDER PASSED BY THE REVENUE AUTHORITIES ALONG WITH THE WRITTEN ARGUMENTS FILED BY THE LD.COUNSEL FOR THE ASSESSEE AND SUPPORT OF VARIOUS DOCUMENTARY EVIDENCES AS WELL AS VARIOUS CASE LAWS FILED BY HIM, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT VIDE ORDER DATED 09.03.1999 U/S.143(1) OF THE INCOME TAX ACT ACCEPTING THE RETURN 6 FILED BY THE ASSESSEE. LATER ON, THE ASSESSING OFFICER ISSUED NOTICE U/S.148 OF THE INCOME TAX ACT DATED 13.03.1997 FOR REOPENING OF THE ASSESSMENT DATED 09.03.1990 U/S.143(1) OF THE INCOME TAX ACT. THE LD.COUNSEL FOR THE ASSESSEE HAS ATTACHED A NOTICE DATED 13.07.1997 AT PAGE 38 OF HIS PAPER BOOK. WE HAVE PERUSED THE SAME I.E. IN THE NAME OF SHRI RAMJIBHAI S. PATEL, 1997. WE HAVE ALSO PERUSED THE LETTER DATED 12.04.1997 I.E. PAGE NO.39 OF THE PAPER BOOK, WRITTEN TO THE ITO, WARD-2(3), SURAT BY THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE. 14. IN RESPONSE TO THE NOTICE U/S.148 OF THE INCOME TAX ACT FOR A.Y. 1988-89 INFORMING THE ASSESSING OFFICER THAT YOU HAVE ISSUED THE SAID NOTICE TO SHRI RAMJIBHAI S. PATEL WHO HAS EXPIRED IN JANUARY 1996, THE NOTICE IS THEREFORE, BAD IN LAW, THEREFORE IGNORE. WE HAVE ALSO SEEN THE RECEIPT OF THIS LETTER DATED 12.04.1997 BY THE ITO, DATED 15.04.1997. AGAIN ON 26.03.1999 THE ASSESSING OFFICER ISSUED NOTICE IN THE NAME OF SHRI RAMJIBHAI S. PATEL U/S.148 OF THE INCOME TAX ACT DESPITE INFORMATION GIVEN BY THE ASSESSEE THAT SHRI RAMJIBHAI S. PATEL HAD BEEN EXPIRED IN THE JANUARY 1996. WE HAVE PERUSED THE NOTICE DATED 13.03.1997 U/S.148 OF THE INCOME TAX ACT AND LETTER WRITTEN BY THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE DATED 12.04.1997 AND THE SECOND NOTICE U/S.148 DATED 26.03.1999 ISSUED IN THE NAME OF DEAD PERSON AS PER THE EVIDENCE SUPPLIED BY THE ASSESSEE TO THE ASSESSING OFFICER WHICH THE ASSESSEE HAS ATTACHED AT PAGE NO.42 OF THE PAPER BOOKS THAT HIS CERTIFICATE BHAVNAGAR MUNICIPAL CORPORATION STATING THEREIN THAT SHRI RAMJIBHAI S. PATEL EXPIRED ON 24.01.1996. 7 AFTER RECEIVING THE INFORMATION FROM THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE ALONG WITH DOCUMENTARY EVIDENCE THE ASSESSING OFFICER SHOULD HAVE BEEN DROPPED THE PROCEEDING FOR REOPENING OF THE CASE OF THE ASSESSEE. BUT, NO EFFECT UPON THE ASSESSING OFFICER THE REASON BEST KNOWN TO HIM. THE ASSESSING OFFICER HAS WASTED HIS TIME AND AS WELL AS THE GOVERNMENT AND THE L/R OF THE ASSESSEES PRECIOUS TIME BY ISSUING NOTICE AGAIN AND AGAIN TO THE DEAD PERSON WHICH IS TOTALLY ILLEGAL VOID AB INITIO. WE ARE OF THE VIEW THAT THE ASSESSMENT IN DISPUTE HAS BEEN COMPLETED U/S.143/147 OF THE INCOME TAX ACT BY ISSUING A NOTICE TO THE DEAD PERSON ON THE BASIS OF A NOTICE U/S.148 OF THE ACT TO THE DEAD PERSON. SIMILARLY, THE LD.FIRST APPELLATE AUTHORITY HAS ALSO WRONGLY UPHOLD THE ILLEGAL ASSESSMENT ORDER WHICH IS NOT SUSTAINABLE IN THE EYE OF LAW. OUR VIEW IS SUPPORTED BY VARIOUS DECISIONS CITED BY THE LD.COUNSEL FOR THE ASSESSEE WHICH ARE AS UNDER: A) JAYADEEPKUMAR DHIRAJLAL THAKKAR (165-DTR-404) B) SMT. KESAR DEVI (227-CTR-621) (RAJASTHAN) C) VIPIN WALIA (67-TAXMANN.COM-56) (DELHI) D) RAKESHKUMAR (313-ITR-305) (PUNJAB & HARYANA) E) M.HEMANATHAN (239-TAXMAN-533) (MADRAS) F) BRAHAM PRAKASH (275-ITR-242)(DELHI) G) ALAMELU VEERAPPAN (16-DTR-434) (MADRAS) H) MANPREET SINGH BHAMRA (138-TTJ-41) (CHANDIGARH, UO) I) LATE SMT. LAXMIBAI KARANPURIA THROUGH L/H RAJENDRA KARANPURIA (135-TTJ-123) (INDORE) J) MANI SQUARE LTD. (88-TAXMANN-COM.77) (KOLKATA) K) SHANTA KAPOOR (93-TAXMANN.COM.226)(AGRA) L) R.C.JAIN (DECD.) (273-ITR-384)(DELHI) M) SMT.S.NACHIAR (326-ITR-77)(MADRAS) 15. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS WELL AS CITATIONS CITED ABOVE AS EXPLAINED ABOVE WE DECLARE ASSESSMENT ORDER DATED 27.03.2000 PASSED U/S.143 R.W.S. 147 OF THE 8 INCOME TAX ACT VOID AB INITIO AS WELL AS THE IMPUGNED ORDER PASSED BY CIT(A)-1, SURAT ON 14.03.2016 BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 19-07-2019. SD/- SD/- (O.P. MEENA) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/07/2019 / GANGADHARA RAO.S COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. PR.CIT 4. CIT(A) 5. DR / / TRUE COPY / / / / TRUE COPY / / ASST. REGISTRAR, ITAT, SURAT