Multiple Finance Co., New Delhi V. DCIT, New Delhi

ITA 2707/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8302 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 05-04-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 04-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Keywords: Period of limitation; Time period of passing order

Judgement Text

1 ITA NO. 2707/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI G. D. AGRAWAL, VICE P RESIDENT AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.-2707/DEL/2012 (ASSESSM ENT YEAR-2007-08) MULTIPLE FINANCE CO. C/O. KAPIL GOEL ADV. A-1/25, SECTOR 5, ROHINI NEW DELHI AABFM3627L (APPELLANT) VS DCIT CIRCLE-26(1) NEW DELHI (RESPONDENT) APPELLANT BY SH. KAPIL GOEL, ADV RESPONDENT BY SH.P. DAM KANUNJNA, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 12/3/2 012 PASSED BY CIT(A) XVIII, NEW DELHI FOR THE ASSESSMEN T YEAR 2007- 08. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, CIT(A) ERRED IN NOT QUASHING THE IMPUGN ED ASSESSMENT ORDER FOR WANT OF MANDATORY SERVICE OF NOTICE U/S 143(2) OF THE ACT, WITHIN PRESCRIBED TIME DATE OF HEARING 05.04.2016 DATE OF PRONOUNCEMENT 0 7 .04.2016 2 ITA NO. 2707/DEL/2012 LIMIT, AS OBJECTED TO LD. A.O DURING ASST. PROCEEDINGS, WITH AFFIDAVITS AND POSTAL EVIDENCE. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, CIT(A) ERRED IN NOT QUASHING THE IMPUGN ED ASSESSMENT ORDER FOR ABSENCE OF VALID SERVICE OF NO TICE U/S 143(2) OF THE ACT ON BASIS OF IMAGINARY AND PERVERSE FINDINGS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, CIT(A) ERRED IN CONFIRMING THE DISALLO WANCE OF LOSS IN FUTURES AND OPTIONS TRANSACTIONS AMOUNTI NG TO RS.10,28,735/- ON MERE BASIS OF SUSPICION, CONJECTURES AND SURMISES AND NON GERMANE CONDITIONS. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, CIT(A) ERRED IN IGNORING OUR VARIOUS SUBMISSIONS IN DISPOSING OUR APPEAL GROUNDS TO SUIT HER PERMEDIATED CONCLUSION. 3. THE LD. AR SUBMITTED THAT THE ASSESSEE IS A PART NERSHIP FIRM AND IS A SUB-BROKER DEALING IN SHARES AND SECU RITIES. THE ASSESSEE DECLARED THE SALE OF SHARES OF RS.14,87,41 ,342/- AGAINST THE PURCHASES OF RS.14,47,72,650/- FOR THE ASSESSME NT YEAR UNDER CONSIDERATION. THE ASSESSEE ALSO DECLARED SA LES BY FUTURE AND OPTION (F & O) OF RS.70,52,868/- AGAINST THE PU RCHASE UNDER THE SAME HEAD OF RS.27,81,603/- AND DECLARED NET LO SS FROM THE BUSINESS ACTIVITIES/TRADING OF SHARES UNDER F & O A T RS.10,28,735/- THOUGH THE GROSS PROFIT DECLARED IN PROFIT AND LOSS ACCOUNT AT RS.31,04,648/-. AS PER THE ASSESSMENT O RDER, THE CASE WAS SELECTED AFTER DUE APPROVAL OF THE CCIT AN D NOTICE U/S 143(2) WAS ISSUED. THE SAID NOTICE WAS ISSUED ON 2 9/09/2008 BUT WAS RECEIVED AFTER THE TIME BARRING DATE ON 30/ 09/2008 BY THE ASSESSEE. THE LD. AR FURTHER SUBMITTED THAT TH E ASSESSEE 3 ITA NO. 2707/DEL/2012 RECEIVED THE NOTICE AFTER THE STATUTORY PERIOD, THE REFORE, SECTION 143(2) NOTICE IS NOT IN ACCORDANCE WITH LAW. 4. THE LD. AR FURTHER SUBMITTED THAT THE CIT(A) HAS WRONGLY GIVEN THE FINDING THAT THE POST OFFICE IS THE AGENT OF THE ASSESSEE AND THE DATE ON WHICH THE NOTICE IS RECEIVED BY THE POST OFFICE IS DEEM TO BE THE DATE OF SERVICE OF NOTICE. THE LD. AR FURTHER SUBMITTED THAT THE RELIANCE PLACED BY THE CIT(A) IN RESPECT OF DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MADHYA BHARAT ENERGY CORPORATION LTD PASSED ON 11 TH JULY 2011 IS NOT AT ALL RELEVANT IN THE PRESENT CASE AS THE I SSUE THEREIN WAS TOTALLY DIFFERENT. 5. THE LD. AR RELIED UPON THE ITAT DELHI BENCH DECI SION IN THE CASE OF OIP SENSOR SYSTEMS INDIA LIAISON OFFICE VS. ADIT, ITA NO. 5796/DEL/2010 DATED 28 TH DECEMBER, 2013. THE ISSUE RAISED HEREIN WAS ALREADY DECIDED IN FAVOUR OF THE ASSESSE E. IN PARA 15 AND 16 OF THE SAID DECISION CLEARLY STATED OUT THAT THE LIMITATION FOR SERVICE OF NOTICE U/S 143(2) IN ACCORDANCE WITH APPLICABILITY OF THE PROVISO TO SECTION 143(2) (II) WOULD BE SIX MON THS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FU RNISHED. THE LD. AR SUBMITTED THAT THE LIMITATION AS LAID DOWN I N THE AMENDED PROVISO TO SECTION 143(2) (II) IS APPLICABLE IN ACC ORDANCE WITH THE DELHI HIGH COURT DECISION IN THE CASE OF C. B RICHA RDS ELLIS MORITIUS LTD. VS. ADIT 2008 TAXMAN 323 (DELHI). TH E LD. AR ALSO RELIED ON THE DECISION OF CIT VS. LENA DIAMONDS LTD . 281 ITR 1 (DELHI) AS WELL AS CIT (A) VS. VARDHMAN STATE PVT. LTD 287 ITR 368 (DEL). 4 ITA NO. 2707/DEL/2012 6. AS RELATES TO THE NEXT POINT, THE LD. AR SUBMITT ED THAT DATE OF SERVICE OF THE NOTICE U/S 143(2) IS THE DATE WHE N THE ASSESSEE RECEIVED THE NOTICE AND NOT THE DATE OF ISSUANCE OF SUCH NOTICE. THE AUTHORITIES BELOW HAVE TAKEN THE DATE OF ISSUAN CE OF NOTICE I.E. 29/9/2008 AS THE DEEMED DATE OF SERVICE. THE LD. AR ON THE OTHER HAND, MAINTAINS THAT SINCE THE NOTICE WAS SER VED AFTER 30 TH SEPTEMBER, 2008, THE SAID DATE IS BEYOND THE LIMITA TION PERIOD PRESCRIBED BY THE APPLICABLE PROVISO TO SECTION 143 (2) (II) OF THE ACT. THUS, THE LD. AR POINTED OUT THAT THE CIT(A) H AS TOTALLY IGNORED THE VALIDITY OF SERVICE OF NOTICE IN ASSESS EES OWN CASE AND THE SAME SHOULD HAVE BEEN SET ASIDE BY THE CIT(A). THE LD. AR FURTHER SUBMITTED THAT IN VIEW OF THIS, THE ASSESSM ENT ORDER SHOULD HAVE BEEN QUASHED BY THE CIT (A). 7. THE LD. DR SUBMITTED THAT SINCE THE AMENDMENT TO PROVISO IN RESPECT OF SECTION 143(2) OF THE ACT IS NOT APPL ICABLE IN THE PRESENT CASE BECAUSE THE ASSESSMENT YEAR 2007-08 WI LL HAVE GOVERNING EFFECT OF THE EARLIER PROVISO, THE CIT(A) ORDER IS JUST AND PROPER AND ASSESSMENT ORDER IS RIGHTLY PASSED IN AS SESSEES CASE. 8. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. THE NOTICE U/S 143(2) WAS RECEIVED AFTER THE EXPIRY OF THE LIMITATION PERIOD GIVEN UNDER THE ACT BY THE ASSESS EE. THEREFORE, THE CONTENTION OF THE LD. AR APPEARS TO BE JUST AND PROPER. THE POST OFFICE IS NOT AN AGENT OF THE ASSESSEE. IT IS THE SERVICE AVAILED BY THE DEPARTMENT TO SERVE THE NOTICE TO TH E ASSESSEE. IN- FACT THE DEPARTMENT ISSUED THE NOTICE U/S 143(2) ON 29.09.2008, BUT DISPATCHED THE SAME ON THE 30.09.2008 WHICH IS THE LAST DATE OF LIMITATION PERIOD. IF IT IS A CASE OF THE REVEN UE THAT THE NOTICE 5 ITA NO. 2707/DEL/2012 WAS DELIVERED THROUGH HAND ON THE VERY SAME DAY, TH EN IT IS POSSIBLE THAT THE NOTICE WAS SERVED WELL WITHIN THE TIME. THE DECISION REFERRED BY THE ASSESSEE CLEARLY DISCUSSED THE ISSUE BEFORE US AND IT HAS GONE FURTHER IN RESPECT OF THE IMPLICATIONS OF THE AMENDED PROVISO WHETHER IT IS APPLICABLE FOR AS SESSMENT YEAR 2007-08 OR NOT. THEREFORE, THE REVENUES CONTENTIO N AS RELATES TO AMENDMENT TO PROVISO DOES NOT SUSTAIN. 9. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 7 TH OF APRIL, 2016. SD/- SD/- (G. D. AGRAWAL) (SUC HITRA KAMBLE) VICE PRESIDENT JUDICIAL MEMBER DATED: 07/04/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 05/04/2016 PS 2. DRAFT PLACED BEFORE AUTHOR 06/04/2016 PS 6 ITA NO. 2707/DEL/2012 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 07.04.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 07.04.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 7 ITA NO. 2707/DEL/2012 8 ITA NO. 5807/DEL/2010