M/s Total Presentation Device (P) Ltd., New Delhi V. DCIT, New Delhi

ITA 2774/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91140 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 08-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKER
• Assessee Lawyers: KRISHAN KANT
• Keywords: Opportunity of being heard; Additional evidence; Bad and doubtful debts
• Section: 143(3); 142(1); 68; 10

Judgement Text

ITA NO. 2774/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A.NO. 2774 /DEL/201 3 A.Y. : 200 8 - 0 9 M/S TOTAL PRESENTATION DEVICE (P) LTD., 118E, NEB SARAI, IGNOU ROAD, NEW DELHI 110 068 (PAN: AAACT5992K) VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 16(1) NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. KRISHAN KANT, ADVOCATE DEPARTMENT BY : SH. J.P. CHANDRAKER, SR. DR DATE OF HEARING : 08 - 0 5 - 201 5 DATE OF ORDER : 0 1 - 0 6 - 201 5 ORDER PER H.S. SIDHU : J M THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 06 / 2 /20 1 3 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 19 , NEW DELHI ON THE FOLLOWING GROUNDS: - 1. THE LD. CIT(A) ERRED IN FACTS & CIRCUMSTANCES OF THE CASE & IN LAW IN HOLDING THAT THE ASSESSMENT HAS BEEN FRAMED BY VALID SERVICE OF NOTICE U/ S 143(2) OF INCOME TAX ACT 196 1 & DO NOT DESERVE TO BE QUASHED. 2. THAT THE LD. CIT(A) ERRED IN LAW, BY NOT PROVIDING ANY OPPORTUNITY TO REBUT THE REMAND REPORT OF THE AO REGARDING THE SERVICE OF NOTICE U/S 143(2) OF INCOME TAX ACT 1961. ITA NO. 2774/ DEL/ 2013 2 3. THAT THE LD CIT (A) ERRED IN FACTS & IN LAW IN HOLDING, WHILE DISALLOWING THE APPLICATION U/R 46A OF INCOME TAX RULE THAT THE NON OF THE CONDITION LAID DOWN IN RULE 46A ARE SATISFIED. 4. THAT THE LD. CIT(A) EARED IN LAW NOT CONSIDERING THE REMAND REPORT SEND BY AO IN RESPONSE OF LETTER DATED 07/12 /2012 & REJECTED THE APPLICATION U/R 46A OF INCOME TAX ACT 1961 5. THE LD CIT (A) ERRED IN FACTS AND IN LAW KEEPING THE FOLLOWING ADDITIONS AS IT IS WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD: - I. THAT THE LD. CIT(A) ERRED IN FACTS & IN LAW BY DISALLO WING THE BAD DEBTS. II. THAT THE LD. CIT(A) ERRED IN FACTS & IN LAW BY REJECTING THE CLAIM OF LOSS OF GOODS IN TRANSIT & BUSINESS DAMAGE. III. THAT THE CIT(A) ERRED IN FACTS AND IN LAW BY REJECTING CLAIM DISCOUNT OF THE PART EXPENSES. IV. THAT THE LD. CIT (A) ERRED IN FACTS AND IN LAW BY UPHOLDING THE ADDITION MADE U/S 68 OF INCOME TAX ACT BY WAY OF REJECTING THE CLAIM OF 1,39,30,653/ - V. THAT THE CIT(A) ERRED IN FACTS AND IN LAW BY REJECTING THE CLAIM OF ASSESSEE TOWARDS SERVICE CHARGES. VI. THAT TH E CIT (A) ERRED IN FACTS AND IN LAW BY REJECTING THE CLAIM OF INTEREST EXPENSES. 6 . THE CIT (A) ERRED IN FACTS AND IN LAW WHILE DECIDING THE APPEAL, WITHOUT INVOKING THE POWER GIVEN IN SECTION 250 (4) OF INCOME TAX ACT 1961 WHICH ULTIMATELY LEADS TO HAR D SHIP ON THE ASSESSEE. 7. THAT THE APPELLANT CRAVES, LEAVE TO ADD OR AMEND, ANY GROUND OF APPEAL DURING THE COURSE OF APPELLATE PROCEEDINGS ITA NO. 2774/ DEL/ 2013 3 2. THE FACTS NARRATED BY REVENUE AUTHORITIES ARE THAT T HE RETURN OF INCOME IN THIS CASE WAS FILED ON 29.3.2009 D ECLARING INCOME OF RS. 1,18,79,657/ - . THE CASE WAS TAKEN UP UNDER SCRUTINY. STATUTORY NOTICE U/S. 143(2) OF THE I.T. ACT, 1961, WAS ISSUED TO THE ASSESSEE COMPANY ON 18.9.2009 AND SERVED UPON THE ASSESSEE COMPANY. A QUESTIONNAIRE DATED 7.4 .2010 WAS SENT TO THE ASSESSEE COMPANY ALONGWITH NOTICE U/S. 142(1) AND ANOTHER NOTICE U/S. 143(2) AND 142(1) ALONGWITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE ON 27.7.2010. IN RESPONSE TO THE SAME AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME. DURING THE YEAR THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF TRADING OF ELECTRONIC & ELECTRICAL GOOD, COMPUTER PERIPHERAL, AUDIO VISUALS EQUIPMENTS ETC. AND RENDERING SERVICES INCIDENTAL THERETO. AFTER CONSIDERING THE REPLY FILED BY TH E ASSESSEE AND THE DOCUMENTARY EVIDENCE SUPPORTING THE CLAIM OF THE ASSESSEE, THE AO ASSESSED THE INCOME AT RS. 5,10,43,340/ - AND COMPLETING THE ASSESSMENT ON 31.12.20 10 U/S. 143(3) OF THE I.T. ACT. 3. AGGRIEVED WITH THE AFORESAID ORDER DATED 31.12.2010, ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A), WHO IMPUGNED ORDER DATED 06 . 2 .201 3 DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGAINST THE AFORESAID ORDER DATED 6 .2.201 3 PASSED BY THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. A T THE TIME OF HEARING LD. COUNSEL OF THE ASSESSEE ARGUED ONLY ON THE ISSUE INVOLVED IN GROUND NO. 1 RELATING TO NON - SERVICE OF NOTIC E U/S. 143(2) OF THE I.T. ACT AND IN SUPPORT OF HIS ARGUMENTS HE FILED THE WRITTEN SUBMISSIONS. FOR THE SAKE OF CONVENIE NCE, THE WRITTEN SUBMISSION FILED BY THE ASSESSEE ARE REPRODUCED HEREUNDER: - ITA NO. 2774/ DEL/ 2013 4 THE PROMOTERS OF ASSESSEE COMPANY SH. SANJAY BANSAL & SMT. NANDITA SINHA GOT MARRIED ON 26/04/1996 & THEREAFTER BOTH OF THEM DECIDED TO FORM A COMPANY M/S TOTAL PRESENTATION DEVICE PRIVATE LIMITED HEREIN AFTER CALLED 'THE ASSESSEE' & THE SAID COMPANY WAS FORMED VIDE CERTIFICATION OF INCORPORATION OF ROC DATED 02/09/1996 HAVING TWO SHARE HOLDERS & SUBSCRI BER TO MOA& AOA NAMELY SH. SANJAY BANSAL (HAVING SAHRE HOLDING OF 69.9%) & NANDITA SINHA (HAVING HOLDING OF 30.1 %). AFTER THREE YEARS OF THEIR MARRIAGE A DISPUTE ERUPTED BETWEEN THEM & IN THE END BOTH PARTIES FILED VARIOUS COURT CASES AGAINST EACH OTHER . IN BETWEEN NANDITA SINHA WAS REMOVED FROM DIRECTORSHIP OF THE COMPANY BY MAJORITY SHAREHOLDER SH. SANJAY BANSAL VIDE NOTICE TO NANDITA DATED 29/06/2006, REQUISITION FOR CALLING EXTRAORDINARY GM DATED 08/06/2006 & ALSO VIDE NOTICE OF EXTRA OGM DATED 24/07 /2006 . LATER ON, ON 04/12/2009 A DECREE OF DIVORCE BY MUTUAL CONSENT BEARING NO. HMA 197 OF 2009 WAS ALLOWED BY THE COURT ADJ LD. MS. ADITI CHAUDHARY ON THE BASIS OF SETTLEMENT AGREEMENT DATED 02/12/2009 BETWEEN SH. SANJAY BANSAL, MRS. NANDITA & THE ASSE SSEE COMPANY, THROUGH ITS SHARE HOLDERS. A PETITION WAS FILED ON 23/12/2009 & ON 03/06/2010 JUDGMENT WAS PASSED BY A O J ( CENTRAL) - 04 DR. ARCHANA SINHA & MARRIAGE WAS MUTUALLY DISSOLVED. AS PER THE SETTLEMENT, THE CONTROL OF THE COMPANY WAS HANDED BACK TO NANDITA BY WAY OF TRANSFER OF SHARES & MR. SANJAY BANSAL RESIGNED FROM DIRECTORSHIP OF THE COMPANY ON 03/06/2010 ITSELF ALONG WITH HIS ENTIRE TEAM. COPY OF F ORM 32 INTIMATION OF RESIGNATION TO RO C IS ATTACHED . BUT IN FACT A DUE DILIGENCE OF ACTUAL HANDING OVER OF ALL DOCUMENTS WAS NOT DONE AT THAT TIME. ITA NO. 2774/ DEL/ 2013 5 DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE COMPANY HAD MADE LOT OF REQUEST TO THE. OLD MANAGEMENT TO GIVE THE FILES / DOCUMENTS P ERTAINING TO AY IN QUESTION BUT OF NO USE & IN THE END, THE ENTIRE FACTS OF THE DISPUTE BETWEEN THE TWO MANAGEMENTS WAS EXPLAINED TO AO VIDE LETTER DATED 15/12/2010 . AFTER THE RECEIPT OF THE ASSESSMENT ORDER, A COPY OF ORDER AL ONG WITH THE DEMAND NOTICE WAS SEND TO SANJAY BANSAL WITH A TELEPHONE CALL INFORMING HIM THAT HE HAD VIOLATED THE SETTLEMENT TERMS & NOT COOPERATED IN INCOME TAX PROCEEDINGS OF 2007 - 2008 PERTAINS TO HIS PERIOD OF CONTROL OF THE COMPANY THEREFORE ENTIRE DEM AND TO BE PAID BY HIM & TO ENFORCE THIS WE TAKE LEGAL RECOURSE AGAIN OTHERWISE HE HAD TO COOPERATE, GIVE & ASSIST THE NEW MANAGEMENT TO DEAL WITH THE CASE OF HUGE DEMAND & THEREAFTER THE COMPANY AGAIN ASK FOR THE DOCUMENTS VIDE LETTER DATED 08/02/2011& 17/ 02/2011. AS A RESULT WE RECEIVED ALL DOCUMENTS ON 15/04/2011 . FROM THE DOCUMENTS / RECORD FILE RECEIVED ON 15/04/2011, WE CAME TO KNOW ABOUT THE EXISTENCE OF TWO PROTEST LETTER WRITTEN BY OLD MANAGEMENT THROUGH ITS REPRESENTATIVE & CA DATED 10105/2010 & 13 /05/2010 SEND BY SPEED POST TO AO & CIT - VI, IN CHARGE OF AO, REGARDING THE NON RECEIPT OF STATUTORY NOTICE U/S 143(2) OF INCOME TAX ACT & EXPLAINING THE LAW. FIRST APPEAL BEFORE CIT (A) FILED ON 02/0212011 VIDE RECEIPT NO. AD 877057 , MUCH BEFORE THE DATE RECEIPT OF DOCUMENTS I.E 15/04 / 2011 FROM THE OLD MANAGEMENT . THEREFORE ASSESSEE COMPANY DID NOT RAISE ANY GROUND OF APPEAL OF NON RECEIPT OF NOTICE ULS 143(2) AT THE TIME OF FILING OF THE APPEAL. ITA NO. 2774/ DEL/ 2013 6 ON 25/04/2012 ASSESSEE COMPANY FILED AN APPLICATION FOR A DDITIONAL EVIDENCE U/R 46A OF INCOME TAX ACT & AT THE TIME OF HEARING THE APPLICATION OF ADDITIONAL EVIDENCE AR OF THE COMPANY RAISED THE ADDITIONAL GROUND OF NON RECEIPT OF STATUTORY NOTICE U/S 143(2)(II) OF INCOME TAX ACT 1961 & SAME WAS AGAIN MENTIONED IN LETTER DATED 07/12/2012. O N THE BASIS OF THIS ADDITIONAL GROUND READ WITH AN APPLICATION U/R 46A CIT (A) ASKED FOR A REMAND REPORT FROM AO VIDE LETTER DATED 07/12/20 12 ON TWO GROUNDS I.E. WHETHER THE APPLICATION U/R 46A IS ACCEPTABLE? & COMMENT ON SER VICE OF NOTICE ULS 143(2) OF INCOME TAX ACT 1961 & SEND THE COPY OF NOTICE WITH PROOF OF SERVICE. IN RESPONSE OF THIS LETTER, AO ASKED ASSESSEE COMPANY TO ATTEND THE REMAND REPORT PROCEEDINGS & ASSESSEE ACCORDINGLY SUBMITTED THE DESIRED INFORMATION. A O SE ND A REMAND REPORT VIDE LETTER DATED 27/12/2012 TO CIT(A). AFTER CONSIDERING THE EVIDENCE FURNISHED, A O COMMENTED IN THE SAID REMAND REPORT DATED 27 / 12/2012 THAT ADDITIONAL EVIDENCE MAY BE ACCEPTED. DESPITE OF RECOMMENDATION OF THE AO IN REMAND REPORT TO A CCEPT THE ADDITIONAL EVIDENCE, CIT (A) HAS CHOSEN TO REJECT THE APPLICATION OF ADDITIONAL EVIDENCE ULR 46A WITHOUT ASSIGNING ANY REASON & WITHOUT PROVIDING AN OPPORTUNITY OF BEING HEARD WHICH IS BAD IN LAW. THE COPY OF REMAND REPORT WAS NOT PROVIDED TO ASS ESSEE & SAME WAS OBTAINED BY ASSESSEE THROUGH THE RECORD FILE OF THE ASSESSMENT AS CERTIFIED TRUE COPY. THIS POINT MAY BE DEALT IN DETAIL ON SECOND GROUND OF APPEAL SEPARATELY. ITA NO. 2774/ DEL/ 2013 7 SINCE THE REMAND REPORT DATED 27/12/2012 WAS SILENT ON THE ISSUE OF SERVICE OF NOTICE ULS 143(2) OF INCOME TAX ACT, CIT(A) WRITTEN A SECOND LETTER TO THE AO DATED 16/01/2013, ASKING AGAIN TO AO TO COMMENT ABOUT THE SERVICE OF N O TICE ULS 143(2) ALONG WITH THE PROOF OF SERVICE. IN RESPONSE OF THIS LETTER, AO SEND A REPLY DATED 28/01 / 2 013 ALONG WITH COPY OF NOTICE DATED 18/09/2009 SEND THROUGH SPEED POST DISPATCH RECEIPT DATED 22/09/2009 AFFIXED PASTED ON THE SAID NOTICE AS PROOF OF DISPATCH . CIT(A) ON 30 / 0 1 / 2013, HANDED OVER THE COPY OF REMAND REPORT DATED 28/11 / 2013 ALONG ATTACHMENT AS COPY OF NOTICE DATED 18/09/2009 WITH PROOF OF DISPATCH PASTED ON THE SAID NOTICE. THE CIT(A) WITH THIS CONCLUDED THE HEARING WITHOUT GIVING ANY OPPORTUNITY TO REBUT THE FINDING OF THE AO. AS A RESULT OF, NO OPPORTUNITY PROVIDED TO REBUT THE F IN DING OF AO, ON 30 / 01 / 12013 ITSELF, AFTER RECONFIRMING THE RECORD, A LETTER DATED 30 / 01 / 2013, DRAFTED HURRIEDLY, WAS SEND TO CIT (A) BY SPEED POST AT 6.00PM IN THE EVENING, EXPLAINING THE FACT OF NON RECEIPT OF NOTICE ULS 143(2) AS THE NOTICE WAS SEND ON WRONG ADDRESS. IN FACT ASSESSEE COMPANY SHIFTED ITS PLACE OF BUSINESS FROM D - 5 GREEN PARK EXTENSION NEW DELHI TO NEW ADDRESS AT 118 - E NEB SARAI IGNOU ROAD NEW DELHI - 68 & THEREAFTER ASSESSEE FILED AN APPLICATION FOR CHANGE OF ADDRESS ON 18/01 / 20 08 VIDE NSDL RECEIPT NO. 010690200302180 AT PAN DATA BASE. A COPY OF RECEIPT OF NSDL ALONG WITH PROFESSIONAL CHARGES BILL OF ANUJ GOYAL ASSO C IATE CA . IN RESPONSE OF THE SAID APPLICATION AN OBJECTION LETTER DATED ITA NO. 2774/ DEL/ 2013 8 24/01 / 2008 WAS RECEIVED AT NEW ADDRESS, FRO M INCOME TAX PAN SERVICE UNIT POINTING OUT THE DEFECT OF WRONG MENTIONING OF PAN AS AAACT6992K IN PLACE OF CORRECT PAN AAACT5992K. (DIGIT 6 WAS TYPED IN PLACE OF 5). AS REQUIRED BY PAN UNIT SERVICE, THE SAID MISTAKE WAS RECTIFIED BY ASSESSEE & THE CORRECT PAN WITH ALL REQUIRED CHANGES WAS DISPATCHED TO ASSESSEE ON 17/03/2008 BY COURIER. THIS FACT CAN BE VERIFIED FROM THE TAX INFORMATION NETWORK OF INCOME TAX DEPARTMENT. FROM ALL THESE DOCUMENTS IT IS CLEAR THAT THE CHANGE OF ADDRESS OF THE ASSESSEE, IN PAN DATA BASE OF THE INCOME TAX DEPARTMENT WAS DONE EVEN BEFORE OF CLOSING OF FY 2007 - 2008. ACCORDINGLY RETURN OF INCOME TAX OF YEAR ENDING 31 / 03/2008 I.E. FOR AY 2008 - 2009 WAS FILED ON 29103/2009 FROM THE NEW ADDRESS , BUT AO, ON 18/09/2009 HAD CHOSEN TO SEN D THE NOTICE U/S 143(2) OF INCOME TAX ACT ON THE OLD ADDRESS. SAME WAS ACCORDINGLY NOT SERVED ON THE ASSESSEE. AFFIDAVIT TO THIS EFFECT CAN BE FILED IF REQUIRED BY THE HON'BLE BENCH. MORE OVER YOUR KIND ATTENTION IS INVITED TOWARDS THE AMENDMENT REGARDING THE CHANGE - IN - PRINCIPAL PLACE OF BUSINESS IN SALES TAX DEPARTMENT W.E.F 30 / 06/2007 ACCORDINGLY ASSESSEE FILED ITS TDS RETURN WITH INCOME TAX DEPARTMENT FOR THE SECOND QUARTER OF FY 2007 - 2008 VIDE RECEIPT NO. 010690200168535 & FORM 27A. CIT(A) HAS ERRED WH ILE DEALING THE POINT OF NON RECEIPT OF NOTICE ON PARA 4.2 OF PAGE 8 OF ORDER OF CIT(A) ON FOLLOWING GROUNDS: - ITA NO. 2774/ DEL/ 2013 9 (A) NO OPPORTUNITY WAS PROVIDED TO REBUT THE FINDING OF THE AO OTHERWISE ALL THE INFORMATION OF CHANGE OF ADDRESS IN PAN DATA BASE WOULD HAVE BE EN FURNISHED TO (B) CIT(A) HAS ERRED IS MENTIONING IN PARA 4.3 OF PAGE 8 OF ORDER THAT THE AO SEND THE NOTICE ON THE ADDRESS AVAILABLE TO HIM. IN FACT RETURN OF INCOME WAS FILED FROM THE NEW ADDRESS . MORE OVER THE ADDRESS IN PAN DATA WAS CHANGED EVEN BEF ORE THE CLOSING OF FY RELEVANT TO AY 2008 - 2009. ASSESSEE WAS FILING ITS TDS RETURN WITH THE DEPARTMENT FROM SECOND QR. OF 2007 - 2008 & ONWARD FROM NEW ADDRESS. THEREFORE THE NEW ADDRESS WAS VERY MUCH AVAILABLE WITH AO BUT AO CHOSEN TO SEND THE NOTICE AT THE OLD ADDRESS FOR THE REASON BEST KNOWN TO HIM. IN FACT ASSESSEE INSPECTED THE RECORD FILE OF ASSESSMENT VIDE RECEIPT N O. 9708 DATED 17/04/2013 (PAGE 76(I) & 77(I)) & OBTAIN THE COPIES OF FOLLOWING: - ON 05 / 03 . 2010 THE RETURN OF AY 2008 - 2009 WAS PROCESSE D ULS 143(1)(A) AS PER THIS INTIMATION THE ADDRESS OF THE ASSESSEE IS THE NEW ADDRESS. . ON 07/04/2010 A NOTICE U/S 142(1 ) ON WHICH TYPED ADDRESS IS D - 5 GREEN PARK EXTENSION NEW DELHI & HAND WRITTEN ADDRESS IS NEW ADDRESS WHICH SEEMS TO BE AFTER THOUGHT AS THIS NOTICE HAD NEVER RECEIVED BY THE ASSESSEE. THIS HAS BEEN SEND BY SPEED POST ON 08/04/2010 ASKING THE ASSESSEE TO APPEAR ON 30104/2010 AT 12.00. ON 30 / 04/2010 AO CORRECTED HIS NEGLIGENCE & SEND THE NOTICE ULS 142(1) FIXING THE CASE ITA NO. 2774/ DEL/ 2013 10 FOR 14/05/2010 AT CORRECT ADDRESS I.E 118 NEB SARAI. THIS IS SEND THROUGH SPEED POST VIDE SERIAL NO. 148 VIDE RECEIPT NO. 5. COPY ATTACHED AT PAGE 88. THIS NOTICE WAS SERVED & IN RESPONSE' OF THIS NOTICE, ASSESSEE FILED THE REPLY DATED 10 / 05/2010 & DATED 13/05/2010 OBJE CTING THE VALIDITY OF THE NOTICE. FIRST NOTICE ULS 143(2) OF INCOME TAX ACT ON NEW ADDRESS DATED 27/07/2010 WAS SERVED ON ASSESSEE FIXING THE CASE FOR 20 / 08/2010. C) THAT THE ALLEGATION OF CIT CA) THAT NON RECEIPT OF NOTICE GROUND OF APPEAL, IS AFTER THO UGHT, IS INCORRECT. THIS FACT WAS BROUGHT TO THE KNOWLEDGE OF AO & THE CONCERN CIT BY THE OLD MANAGEMENT VIDE LETTER DATED 10 / 05/2010 & DATED 13/05/2010. MOREOVER CIT ( A) AGAIN ERRED WHILE SAYING THAT THIS GROUND WAS NOT RAISED DURING THE APPEAL. IN FACT, O N THE BASIS OF THE GROUND RAISED, CIT CA) ASKED AO FOR A REMAND REPORT ASKING HIM TO COMMENT ON THE SERVICE OF NOTICE WHICH IS MENTIONED IN ORDER OF CIT(A) ON PARA 3.1 ON PAGE 7 ITSELF. THEREFORE ORDER OF CIT CA) IS CONTRADICTING ITSELF. LEGAL POSITION AS PER PROVISO TO SECTION 143(2) (I I) OF INCOME TAX ACT 1961 INSERTED B Y FINANCE ACT 2008 W.E.F 01 / 4 / 2008 NO NOTICE U/S CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF FY IN WHICH THE RETURN IS FURNISHED. IN THIS CASE ROI WAS FILED ON 29/03/2009. THEREFORE NOTICE ULS 143(2)(II) SHALL BE SERVED ON OR BEFORE 30 / 09/2009 TO ITA NO. 2774/ DEL/ 2013 11 COMPLETE THE VALID ASSESSMENT. NO NOTICE WAS SERVED ON ASSESSEE U/S 143(2) ON OR BEFORE 30 / 09/2009 . CIT(A) HAS RELIED ON A CASE CIT VS. JAGAT NO VEL EXHIBITORS (P) LTD. (2012) 18 TAXMANN.COM 138 (DELHI). YOUR KIND ATTENTION IS INVITED TOWARDS THE FACT THAT IN THIS CASE ALL NOTICES WERE SEND ON SAME ADDRESS WHICH WAS THE CORRECT ADDRESS. MORE OVER PROVISION OF SECTION 292B IS NOT OVERRIDING THE PROVISION OF 142(2)(II) OF INCOME TAX ACT. MORE OVER ASSESSEE PLACES RELIANCE ON FOLLOWING CASES LAWS : - 1. CIT VS. LUNAR DIAMONDS LTD. (2006) 281 ITR 1 (DELHI). IN THIS CASE JURISDICTIONAL HIGH C OURT HELD THAT NOTICE U/S 143(2) MUST BE SERVED ON THE ASSESSEE WITH IN THE TIME STIPULATED IN THE PROVISO. IN CASE THE NOTICE WAS NOT SERVED WITHIN THE SAID TIME LIMIT THE ASSESSMENT ORDER PASSED WOULD BE NULL AND VOID. 2. CIT VS. MASCOMPTEL INDIA LTD. IN ITA 11 / 2012 DATED 04/0112012 OF DELHI HIGH COURT. THE FACT OF THE CASE ARE SIMILAR TO OUR FACTS. IN THIS CASE ALSO COURT RELIED ON CIT V. LUNAR DIAMONDS LTD. (2006) 281 ITR 1 (DELHI). 3 . CIT VS. V ARDHMAN ESTATE P. LTD. (2006) 287 ITR 368 ( DEL) IT WA S HELD THAT THE DATE OF DISPATCH OF NOTICE CANNOT BE THE DEEMED DATE OF SERVICE OF NOTICE. NOTICE U/S 143(2) HAVING BEEN SERVED ON THE ASSESSEE THROUGH SPEED POST AFTER THE EXPIRY OF THE PRESCRIBED TIME LIMIT, THE SERVICE OF NOTICE WAS NOT EFFECTED IN TIME . ITA NO. 2774/ DEL/ 2013 12 4. THE SIMILAR VIEW WAS TAKEN BY GURAJAT HIGH COURT IN DCIT V. MAHI VALLY HOTELS & RESORTS ( 2006) 287 ITR 360 ( GUJ) . FROM THE ABOVE SAID CASE LAWS IT CAN BE SEEN THAT NO ASSESSMENT U/S 143(3) CAN BE SAID TO HAVE VALIDLY MADE WHERE NOTICE U/S 143(2) IS NOT SERVED OR WHERE SUCH NOTICE IS SERVED BEYOND THE PRESCRIBED PERIOD OR IMPROPERLY SERVED. THE CONSEQUENCES FLOWING FROM SUCH NON / BELATED / IMPROPER SERVICES OF NOTICE ARE THAT THE ASSESSMENT SO MADE BECOME VOID AB INITIO. EFF ECT OF SECTION 292BB OF INCOME TAX ACT PI. REFER PAGE NO. 2 PARA 2 OF ASSESSMENT ORDER OF AO IN WHICH AO SAID 'BEFORE GOING IN TO ASSESSMENT PART OF THE ORDER, I CONSIDER IT IS IMPORTANT TO GIVE THE BACK GROUND OF THE CASE. THE ASSESSEE COMPANY HAS NOT AT ALL COOPERATING IN PROVIDING THE DETAIL ..... ' THEREFORE IT IS CLEAR FROM THE ASSESSMENT ORDER THAT, (AS PER THE VIEW OF THE AO) ASSESSEE HAS NOT COOPERATED IN ASSESSMENT PROCEEDING. MORE OVER ASSESSEE COMPANY HAS RAISED OBJECTION BEFORE THE COMPLETION OF ASSESSMENT REGARD ING THE SERVICE OF NOTICE. THEREFORE THE CASE IS FULLY COVERED UNDER THE PROVISO TO SECTION 292BB OF INCOME TAX ACT. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 2774/ DEL/ 2013 13 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES, WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AS WELL AS THE CASE LAWS RELEVANT TO THE ISSUE IN DISPUTE. AS PER THE ASSESSMENT ORDER THE ASSESSEE FILED ITS RETURN OF INCOME DATED 29.3.2009 F OR THE ASSESSMENT YEAR IN DISPUTE AT THE TOTAL INCOME OF RS. 1,18,79,657/ - . ACCORDING TO THE ASSESSMENT ORDER THE NOTICE U/S. 143(2) OF THE I.T. ACT WAS ISSUED TO THE ASSESSEE COMPANY ON 18.3.2009 AND SERVED UPON THE ASSESSEE COMPANY. THE ASSESSEE HAS DI SPUTED THE SERVICE OF NOTICE U/S. 143(2) OF THE I.T. ACT ON 18.9.2009. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE DRAW OUR ATTENTION TOWARDS PAGE NO. 74 OF THE ASSESSEE S PAPER BOOK THAT THE INCOME TAX RETURN ACKNOWLEDGMENT FOR THE ASSTT. YEAR I N DISPUTE I.E. 2008 - 09 IN WHICH THE ASSESSEE HAS MENTIONED ITS ADDRESS I.E. 118 - E, NEB SARAI, NEW DELHI. THE ASSESSEE S COUNSEL FURTHER DRAW OUR ATTENTION TOWARDS PAGE NO. 67 OF PAPER BOOK WHERE THE NOTICE U/S. 143(2) OF THE ACT DATED 18.9.2009 FOR 30.9.2 009 HAS BEEN ISSUED BY THE AO TO THE ASSESSEE ON THE ADDRESS I.E. D - 5, GREEN PARK EXTENSION, NEW DELHI. AS DISCUSSED ABOVE, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSTT. YEAR IN DISPUTE DATED 29.3.2009 BY MENTIONING ITS ADDRESS AS 118 - E, NEB SARAI , NEW DELHI. IN OUR VIEW AO SHOULD HAVE ISSUED NOTICE U/S. 143(2) OF THE I.T. ACT TO THE ASSESSEE ON THE ADDRESS MENTIONED IN ITS RETURN OF INCOME FOR THE ASSTT. YEAR IN DISPUTE I.E. 118 - E, NEB SARAI, NEW DELHI. (PAGE NO. 74 OF THE PAPER BOOK). BUT AS PER THE RECORD, THE AO HAD ISSUED NOTICE TO THE ASSESSEE U/S. 143(2) OF THE I.T. ACT ON THE ADDRESS AT D - 5, GREEN PARK EXTENSION, NEW DELHI WHICH IS NOT AS PER THE RECORD AVAILABLE WITH AO. 7.1.1. SECONDLY, THE AO HAD ISSUED INTIMATION U/S. 143(1) OF THE ACT DATED 5.3.2010 TO THE ASSESSEE ON THE CORRECT ADDRESS I.E. 118 - E, NEB SARAI, IGNOU ROAD, NEW DELHI WHICH THE ASSESSEE HAS ATTACHED ITA NO. 2774/ DEL/ 2013 14 IN ITS PAPER BOOK AT PAGE 78 MEANING THEREBY THE AO IS IN POSSESSION OF CORRECT ADDRESS OF THE ASSESSEE AND HAS NOT I SSUED NOTICE U/S. 143(2) OF THE ACT TO THE ASSESSEE ON THE CORRECT ADDRESS. 7.1.2 WE FIND THAT THE ASSESSEE HAS ALSO FILED ITS OBJECTIONS DATED 10.5.2010 BEFORE THE AO WHICH IS AT PAGE NO. 55 OF THE PAPER BOOK FOR NON - SERVICE OF STATUTORY NOTICE U/ S. 143(2) OF THE ACT. ASSESSEE HAS ALSO GIVEN INTIMATION DATED 13.5.2010 TO THE LD. COMMISSIONER OF INCOME TAX - VI REGARDING NON - SERVICE OF STATUTORY NOTICE U/S. 143(2) OF THE ACT, BUT AO AS WELL AS LD. CIT HAS NOT TAKEN ANY ACTION ON THE SAME. LD. FIRST APPELLATE AUTHORITY HAS PASSED THE IMPUGNED ORDER WITHOUT APPRECIATING THE F ACTS AND RECORD OF TH E CASE , WHICH IS NOT SUSTAINABLE IN THE EYES OF LAW. 7.1. 3 THIRDLY, WE ALSO FIND THAT AT PAGE 79 OF THE PAPER BOOK FILED BY THE ASSESSEE THAT NOTICE U/S . 143(1) OF THE IT. ACT WAS ALSO ISSUED TO THE ASSESSEE DIRECTING TO ATTEND THE OFFICE OF THE AO FOR 30.4.2010 ON THE OLD ADDRESS I.E. D - 5, GREEN PARK EXTENSION, NEW DELHI. BUT WE HAVE ALSO FOUND THAT THE AO HAS WRITTEN BY HAND THE CORRECT ADDRESS OF THE ASSESSEE I.E. 118 - E, NEB SARAI, IGNOU ROAD, NEW DELHI 110 068 MEANING THEREBY THE AO IS HAVING THE KNOWLEDGE OF THE CORRECT ADDRESS OF THE ASSESSEE, BUT DID NOT ISSUE NOTICE U/S. 143(2) OF THE I.T. ACT TO THE ASSESSEE ON THE CORRECT ADDRESS OF THE ASSESS EE. THEREFORE, WE ARE OF THE VIEW THAT NOTICE U/S. 143(2) OF THE I.T. ACT HAS NOT BEEN SERVED UPON THE ASSESSEE AND THE AO HAS COMPLETED THE ASSESSMENT WITHOUT SERVING THE NOTICE U/S. 143(2) OF THE I.T. ACT ON THE ASSESSEE, WHICH IS MANDATORY FOR THE AO B EFORE COMPLETION OF THE ASSESSMENT IN DISPUTE. ACCORDING TO THE PROVISIONS OF SECTION 143(2)(II) OF THE I.T. ACT, NO NOTICE SHALL BE SERVED UPON ON ASSESSEE AFTER THE EXPIRY OF THE 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FU RNISHED. ACCORDING TO THE RECORD, WE FIND THAT THE ASSESSEE S RETURN OF ITA NO. 2774/ DEL/ 2013 15 INCOME WAS FILED BY THE ASSESSEE ON 29.3.2009 . THEREFORE, NOTICE U/S. 143(2)(II) WOULD BE SERVED ON OR BEFORE 39.9.2010 TO COMPLETE THE VALID ASSESSMENT, BUT NO SUCH NOTICE WAS S ERVED ON THE ASSESSEE ON OR BEFORE 30.9.2009. THEREFORE, THE ASSESSMENT IN DISPUTE IS NULL AND VOID. IN VIEW OF ABOVE, THE AO HAS COMPLETED THE ASSESSMENT IN DISPUTE CONTRARY TO THE PROVISIONS OF LAW AND, HENCE, THE ASSESSMENT IN DISPUTE IS NOT SUSTAIN ABLE IN LAWS , THIS VIEW IS SUPPORTED BY THE HON BLE SUPREME COURT OF INDIA JUDGMENT; VARIOUS HIGH COURTS JUDGMENTS AND THE TRIBUNAL DECISIONS WHICH ARE REPRODUCED HEREUNDER: - 1. ACIT & ANR. VS. HOTEL BLUE MOON [2010] 321 ITR 362 (SC) WHEREIN THE HON BLE SUPREME COURT HAS HELD THAT THE ISSUE OF NOTICE U/S. 143(2) OF THE I.T. ACT IS MANDATORY AND NOT PROCEDURAL. IF THE NOTICE IS NOT SERVED WITHIN THE PRESCRIBED PERIOD, THE ASSESSMENT O RDER IS INVALID. 2. CIT VS. LUNAR DIAMONDS LTD. (2006) 281 ITR 1 (DELHI). IN THIS CASE JURISDICTIONAL HIGH COURT HELD THAT NOTICE U/S 143(2) MUST BE SERVED ON THE ASSESSEE WITH IN THE TIME STIPULATED IN THE PROVISO. IN CASE THE NOTICE WAS NOT SERVED WITH IN THE SAID TIME LIMIT THE ASSESSMENT ORDER PASSED WOULD BE NULL AND VOID. 3 . CIT VS. MASCOMPTEL INDIA LTD. IN ITA 11/2012 DATED 04/0112012 OF DELHI HIGH COURT. THE FACT OF THE CASE ARE SIMILAR TO OUR FACTS. IN THIS CASE ALSO COURT RELIED ON CIT V. LUNAR DIAMONDS LTD. (2006) 281 ITR 1 (DELHI). ITA NO. 2774/ DEL/ 2013 16 4 . CIT VS. VARDHMAN ESTATE P. LTD. ( 2006) 287 ITR 368 (DEL) IT WAS HELD THAT THE DATE OF DISPATCH OF NOTICE CANNOT BE THE DEEMED DATE OF SERVICE OF NOTICE. NOTICE U/S 143(2) HAVING BEEN SERVED ON THE ASSESSEE THROUGH SPEED POST AFTER THE EXPIRY OF THE PRESCRIBED TIME LIMIT, THE SERVICE OF NO TICE WAS NOT EFFECTED IN TIME. 5 . THE SIMILAR VIEW WAS TAKEN BY GURAJAT HIGH COURT IN DCIT V. MAHI VALLY HOTELS & RESORTS ( 2006) 287 ITR 360 ( GUJ). 7.2 FROM THE ABOVE SAID CASE LAWS , IT CAN BE SEEN THAT NO ASSESSMENT U/S 143(3) CAN BE SAID TO HAVE VA LIDLY MADE WHERE NOTICE U/S 143(2) IS NOT SERVED OR WHERE SUCH NOTICE IS SERVED BEYOND THE PRESCRIBED PERIOD OR IMPROPERLY SERVED. THE CONSEQUENCES FLOWING FROM SUCH NON / BELATED / IMPROPER SERVICES OF NOTICE ARE THAT THE ASSESSMENT SO MADE BECOME VOID AB INITIO. 8 . IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS RELIED UPON, W E ARE OF THE CONSIDERED VIEW THAT THE AO HAS NOT ISSUED ANY NOTICE U/S 143(2) OF THE I.T. ACT TO THE ASSESSEE. DURING THE ENTIRE ASSESSMENT PROCEEDINGS, THE ASSESSMENT ORDER IN DISPUTE IS INVALID, VOID ABNITIO AND AGAINST THE PROVISIONS OF THE LAW AND T HE IMPUGNED ORDER IS NOT SUSTAINABLE IN THE EYES OF LAW AND HENCE, WE CANCEL THE SAME BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. ITA NO. 2774/ DEL/ 2013 17 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE O PEN C OURT ON 0 1 / 0 6 /20 1 5 . S D / - S D / - [ J.S. REDDY] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 0 1 / 0 6 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES