Smt. Janak Rani Dhingra, Haryana V. The Income Tax Officer, Moga

ITA 293/ASR/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4136 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-02-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 17-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: P N ARORA
• Section: 144; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N. S. SAINI, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I. T. A. NO. 293/(ASR)/2016 ASSES SMENT YEAR: 2006-07 SMT. JANAK RANI DHINGRA, W/O SHRI A.P.DHINGRA, 138, MANGE WALA HOUSE, PATI WALI GALI, MOGA, (NOW 28, GROUND FLOOR, ASHOKA ENCLAVE, SECTOR 34, FARIDABAD (HARYANA) PAN NO. ACQPD3274B VS. INCOME TAX OFFICER, WARD-1, MOGA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P.N. ARORA, ADVOCATE RESPONDENT BY: SH. BHAWANI SHANKAR, DR DATE OF HEARING : 11.2.2019 DATE OF PRONOUNCEMENT : 13.2.2019 ORDER PER N.S. SAINI, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-3, LUDHIANA DA TED 4.3.2016. 2. GROUND NOS. 2 TO 6 READS AS UNDER:- 2. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AND FA CTS OF THE CASE BY SUSTAINING THE ASSESSMENT FRAMED U/SS. 143( 3)/144 OF THE ACT, IN THE ABSENCE OF A VALID SERVICE OF N OTICE U/S 143(2) OF THE ACT ON THE ASSESSEE. 3. THAT THE LD. CIT(A) HAD WRONGLY OBSERVED THAT THE IMPUGNED SERVICE OF NOTICE U/S 143(2) BY AFFIXTURE WAS WIT NESSED BY ONE INDEPENDENT WITNESS, AS THE SAME IS GLARINGLY FOUND CONTRARY TO THE FACTS AVAILABLE ON RECORD. 2 ITA NO. 293/ASR/2016 SMT. JANAK RANI DHINGRA, FARIDABAD 4. THAT THE LD. CIT(A) HAD MOST ARBITRARILY JUSTIFIED THE SUBSTANTIALLY INCOMPLETE ADDRESS OF THE ASSESSEE PROVIDED BY THE A.O IN THE POSTAL CORRESPONDENCE PERTAINING TO IMPUGNED SERVICE OF NOTICE U/S 143(2) OF THE ACT, FOR T HE REASON THAT AS THE HUSBAND OF THE ASSESSEE WAS A WE LL KNOWN PERSON, THEREFORE IT WOULD NOT HAVE BEEN DIFFICULT FOR THE POSTMAN OF THE AREA TO LOCATE THE ASSESSEE. 5. THAT THE LD. CIT(A) ON THE BASIS OF MISCONCEIVED FA CTS WHICH ARE GLARINGLY FOUND CONTRARY TO THE CLAIM OF THE A. O RAISED IN THE BODY OF THE ASSESSMENT ORDER, THAT TILL 31.07.2 007 ONLY NOTICE U/S 142(1) WAS SERVED ON THE ASSESSEE, HAD T HUS MOST ARBITRARILY PRESUMED SERVICE OF NOTICE U/S 143(2) O F THE ACT ON THE ASSESSEE. 6. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AND F ACTS OF THE CASE BY FAILING TO APPRECIATE THAT IN THE ABSEN CE OF A VALID SERVICE OF NOTICE U/S 143(2), AS REQUIRED U NDER LAW, THE ASSESSEE HAD REMAINED DIVESTED OF THE OPPORTUNI TY TO PARTICIPATE IN THE ASSESSMENT PROCEEDINGS. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN T HE INSTANT CASE, THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 10.7.2006 DISCLOSING INCOME AT RS. 1,32,060/-. THE LAST DATE FOR SERVING NOTICE U/ S 143(2) WAS 31.7.2007. THE AO ISSUED A NOTICE U/S 143(2) ON 30.7.2007 I.E. JUST ONE DAY PRIOR TO THE LAST DATE OF SERVICE AND COMPLETED ASSESSMENT PURSUANT TO THIS N OTICE ON 18.12.2008 DETERMINING INCOME AT RS. 7,18,254/- VIDE AN ORDER PASSED U/S 1 44 OF THE ACT. 4. THE ASSESSEE CONTENDED THAT NO VALID NOTICE U/S 143(2) OF THE ACT WAS SERVED UPON HIM WITHIN PRESCRIBED TIME WHICH EXPIRED ON 31 .7.2007. 5. ON THE OTHER HAND, THE CONTENTION OF THE DEPARTM ENT IS THAT NOTICE ISSUED U/S 143(2) ON 30.7.2007 WAS TRIED TO SERVE THROUGH PROC ESS SERVER ON 31.7.2007 BUT COULD 3 ITA NO. 293/ASR/2016 SMT. JANAK RANI DHINGRA, FARIDABAD NOT BE SERVED AS THE PROCESS SERVER CAME TO KNOW TH AT ASSESSEE WAS OUT OF INDIA ON THAT DATE. THEREAFTER, THE AO SENT THE NOTICE BY RE GISTERED POST TO THE ASSESSEE ON 31.7.2007 AND SIMULTANEOUSLY DIRECTED THE INSPECTOR ATTACHED TO HIS OFFICE TO SERVE THE NOTICE THROUGH AFFIXTURE BY AFFIXING THE NOTICE AT THE DOOR OF THE RESIDENCE OF THE ASSESSEE. 6. THEREAFTER, THE RETURN WAS FILED BEFORE THE AO A ND AS PER THAT REPORT, TWO PERSONS HAVE CLAIMED THAT NOTICE WAS AFFIXED BY THE M AT THE DOOR OF THE ASSESSEE ON 31.7.2007. ONE OF THEM HAS WRITTEN HIS NAME AS GUR DEEP SINGH AND OTHER PERSON HAS MADE AN INITIAL WITHOUT MENTIONING HIS NAME OR IDEN TITY. THIS REPORT WAS COUNTERSIGNED BY MR. M.S. SINGLA, INSPECTOR STATING THAT THE NOTICE WAS AFFIXED IN HIS PRESENCE. THE TIME AND IDENTITY OF THE PERSONS WHO HAVE ALLEGEDLY AFFIXED THE NOTICE IS NOT MENTIONED. AS PER THIS NOTICE, THE HEARING WAS FIXED ON 31.7.2007 ITSELF AT 11 AM IN THE OFFICE OF THE AO. THE LD. DR CLAIMED THAT TH E AFORESAID NOTICE AND THE MANNER OF SERVICE ARE VALID AND PROPER AND CONSEQUENTLY AS SUMPTION OF JURISDICTION TO PASS THE IMPUGNED ORDER OF ASSESSMENT AS VALID. 7. IN OUR CONSIDERED VIEW, NEITHER THE NOTICE WAS V ALID NOR THE MANNER OF SERVICE WAS IN ACCORDANCE WITH THE LAW LAID DOWN IN SECTION 282 OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT', IN SHORT). 8. THE NOTICE ISSUED ON 30.7.2007 AND ALLEGEDLY SER VED AT SOME UNKNOWN TIME ON 31.7.2007 FIXING HEARING AT 11 AM ON 31.7.2007 BEIN G IMPOSSIBLE OF MAKING THE COMPLIANCE CANNOT BE HELD TO BE A VALID NOTICE IN T HE EYES OF LAW. THE NOTICE IS 4 ITA NO. 293/ASR/2016 SMT. JANAK RANI DHINGRA, FARIDABAD EXPECTED TO BE COMPLIED WITH BY THE ASSESSEE AND S UCH A NOTICE WHICH IS IMPOSSIBLE OF COMPLIANCE CANNOT BE HELD TO BE VALID NOTICE. 9. FURTHER THE MANNER OF SERVICE OF NOTICE BY AFFIX TURE IS A SUBSTITUTE MANNER IN PLACE OF DIRECT SERVICE AND IT CAN BE RESORTED ONLY WHEN OTHER MANNER PRESENT IN THE LAW IS NOT POSSIBLE. 10. AS PER SECTION 282 OF THE ACT, THE NOTICE CAN B E SERVED BY POST OR IN THE MANNER AS PRESCRIBED IN ORDER V OF THE CODE OF CIVIL PROCE DURE (CPC). 11. IN THE INSTANT CASE, ADMITTEDLY THE NOTICE WAS DISPATCHED BY POST ON 31.3.2007 AND, HENCE, THE SAME COULD NOT HAVE BEEN SERVED UP ON THE ASSESSEE ON OR BEFORE 31.7.2007 WHICH WAS THE LAST DATE OF SERVICE OF NOT ICE. 12. FURTHER, IN THE INSTANT CASE, IT IS STATED THAT PROCESS SERVER OF THE DEPARTMENT TRIED TO SERVE NOTICE IN PERSON UPON THE ASSESSEE O N 31.7.2007 BUT COULD NOT BE SERVED BECAUSE THE ASSESSEE HAS GONE ABROAD. HOWEVER, IT C OULD NOT BE EXPLAINED HOW THE PROCESS SERVER CAME TO KNOW OF THIS FACT AND WHEN T HE ASSESSEE WAS EXPECTED TO COME BACK. 13. BE THAT AT IT MAY. THE SERVICE BY POST WAS NOT EXHAUSTED BY THE REVENUE BEFORE RESTORING TO THE MANNER OF SERVICE BY AFFIXTURE. TH E CONTENTION OF THE LD. DR THAT IF THE MANNER OF SERVICE BY POST WOULD HAVE BEEN ADOPT ED, THEN THE SERVICE COULD NOT HAVE BEEN MADE WITHIN PRESCRIBED TIME, IN OUR CONSI DERED VIEW DOES NOT EMPOWER THE AO TO RESORT TO SERVE THE NOTICE BY AFFIXTURE . 5 ITA NO. 293/ASR/2016 SMT. JANAK RANI DHINGRA, FARIDABAD 14. THE MUMBAI BENCH OF THE TRIBUNAL IN HEAVEN DISTILLERY (P) LTD. VS. ITO (ASSESSMENT YEAR 2000-01) IN ITA NO. 9041/MUM/2004 ORDER DATED 30.11.2016 HAS HELD AS UNDER:- 7.2....IN THE PRESENT CASE, IT IS UNDENIABLE THAT THE NOTICE UNDER SECTION 143(2) DATED 29-11-2001 HAS BEEN DIRECTLY S ERVED THROUGH AFFIXTURE. THE COMMISSIONER (APPEALS) HAS O BSERVED THAT THERE WAS GOOD REASON FOR THE ASSESSING OFFICE R TO TAKE THIS STEP BECAUSE OF THE NEED TO AVOID TIME LAG AS OTHER WISE THE SERVICE OF NOTICE WAS BECOMING TIME BARRED. IN OUR CONSIDERED OPINION, THE AFORESAID CANNOT BE CONSIDERED TO BE A REASON TO JUSTIFY THE SERVICE OF NOTICE BY AFFIXTURE AFTER BY PASSING THE NORMAL PROCEDURE OF SERVICE OF NOTICE. IN FACT, IN THE CONTEXT OF SUCH PLEA OF THE COMMISSIONER (APPEALS), THE JUDGME NT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. DEWAN KRAFT SYSTEM (P) LTD., (2007) 165 TAXMAN 139 (DEL) HAS BEEN RELIED UPON. IN THIS CASE, THE NOTICE WAS SERVED ON THE AS SESSEE BY AFFIXTURE AND IT WAS THE CASE OF THE ASSESSING OFFI CER THAT THE NOTICE UNDER SECTION 143(2) SENT BY SPEED POST COUL D NOT BE SERVED AND, THEREFORE, AN INSPECTOR WAS DEPUTED, WH O WENT TO THE OFFICE PREMISES OF THE ASSESSEE AND ON FINDING THE SAME LOCKED, THE NOTICE WAS SERVED BY AFFIXTURE. THE ASS ESSEE CONTENDED THAT THE NOTICE WAS INVALIDLY SERVED AND THE TRIBUNAL TOOK NOTE OF THE FACT THAT THE NOTICE WAS ISSUED AT THE VERY LAST MINUTE TO ENSURE THAT THE CASE DID NOT BECOME TIME BARRED AND NO EFFORTS WERE MADE BY THE ASSESSING OFFICER TO FI ND OUT THE WHEREABOUTS OF THE ASSESSEE TO SERVE THE NOTICE, BU T A SHORT CUT WAS TAKEN BY THE INSPECTOR BY RESORTING TO SERVICE BY AFFIXTURE. THE TRIBUNAL UPHELD THE PLEA OF THE ASSESSEE AND OB SERVED THAT THE REVENUE HAD FAILED TO DISCHARGE THE ONUS TO PRO VE THAT THE NOTICE WAS IN FACT SERVED UPON THE ASSESSEE WITHIN THE PRESCRIBED PERIOD. THE HONBLE DELHI HIGH COURT UPHELD THE DEC ISION OF THE TRIBUNAL BY MAKING THE FOLLOWING DISCUSSION : 11. WE HAVE EXAMINED THE COPIES OF THE NOTICES ISSUED BY THE ASSESSING OFFICER AND FIND THAT THE NOTICE WAS ISSUED AT THE LAST MINUTE. SINCE THE OFF ICE OF THE ASSESSEE WAS CLOSED, NO EFFORTS WERE MADE BY THE ASSESSING OFFICER TO FIND OUT THE WHEREABOUTS O F THE ASSESSEE TO SERVE IT BUT A SHORT CUT WAS TAKEN BY 6 ITA NO. 293/ASR/2016 SMT. JANAK RANI DHINGRA, FARIDABAD THE INSPECTOR WHO RESORTED TO AFFIXATION, WHICH WAS CARRIED OUT IN THE ABSENCE OF ANY INDEPENDENT WITNESS. IT APPEARS TO US THAT THE ENTIRE EXERCISE OF SENDING THE INSPECTOR AND RESORTING TO AFFIXATION W AS CARRIED OUT ONLY TO ENSURE THAT THE CASE DOES NOT BECOME TIME-BARRED, KNOWING FULLY WELL THAT THE NOTICES HAVE BEEN ISSUED AT THE VERY LAST MINUTE AN D COULD NOT HAVE BEEN SERVED ON THE ASSESSEE WITHOUT UNDERTAKING SOME OUT OF THE ORDINARY EXERCISE AS HA S BEEN DONE IN THE PRESENT CASE . 7.3 IN THE PRESENT CASE TOO, THERE IS NOTHING TO SUG GEST THAT THE ASSESSEE WAS INTENTIONALLY HIDING FROM THE AUTHORIT IES FOR THE PURPOSE OF AVOIDING SERVICE OR THERE WAS ANY OTHER GOOD REASON TO CONCLUDE THAT THE NOTICE COULD NOT BE SERVED IN AN ORDINARY WAY. THE INACTION OR DELAY ON THE PART OF THE ASSES SING OFFICER IN ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT CANN OT BE A GROUND TO STRAIGHTWAY EFFECT SERVICE BY AFFIXTURE. THUS, IN THE INSTANT CASE, THE ORDINARY PROCESS NOT HAVING BEEN EXHAUSTED OR CARRIED OUT BY THE ASSESSING OFFICER, HE WAS NOT JU STIFIED IN DIRECTLY RESORTING TO SERVICE OF NOTICE BY AN AFFIX TURE MERELY BECAUSE HE HAD ISSUED THE NOTICE AT THE LAST MINUTE I.E. ON 29-11- 2011 SO AS TO AVOID THE LIMITATION EXPIRING ON 30-1 1-2001. UNDER THESE CIRCUMSTANCES, WE FIND AMPLE FORCE IN T HE PLEA OF THE ASSESSEE ON THE ISSUE OF WRONG ASSUMPTION OF JU RISDICTION BY THE ASSESSING OFFICER BY ISSUING THE INSTANT NOTICE UNDER SECTION 143(2) OF THE ACT. 15. THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS HABIBULLAH (1985) 21 TAXMAN 293 (ALL.) HAS HELD THAT SINCE THE ASSESS EE HAD GONE TO LONDON AND THERE WAS NO POSSIBILITY OF HIS COMING BACK IN THE NEAR F UTURE, THE AFFIXATION OF NOTICE ON THE MAIN DOOR OF THE RESIDENCE OF THE ASSESSEE COULD NO T BE TAKEN TO BE SUFFICIENT SERVICE OF NOTICE 7 ITA NO. 293/ASR/2016 SMT. JANAK RANI DHINGRA, FARIDABAD 16. IN THE INSTANT CASE, WE FIND THAT IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE OR HER AGENT REFUSED TO RECEIVE OR ACKNOW LEDGE THE RECEIPT OF NOTICE. IT IS ALSO NOT ON RECORD THAT THE ASSESSEE COULD NOT HAVE BEEN AVAILABLE AT HER RESIDENCE IN A REASONABLE TIME FROM THE DATE OF WHICH THE FIRST AT TEMPT WAS MADE TO SERVE THE NOTICE IN PERSON. FURTHER, IT IS ALSO EVIDENT THAT NO ATTE MPT WAS MADE TO SERVE THE NOTICE BY POST WITHIN PRESCRIBED TIME. THEREFORE, SIMPLY BEC AUSE THE AO HAS ISSUED THE NOTICE IN THE LAST MINUTE I.E. JUST A DAY PRIOR TO THE LAS T DATE PRESCRIBED FOR SERVICE OF NOTICE DOES NOT EMPOWER THE AO TO SERVE THE NOTICE BY AFFI XTURE. UNDER THE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, NO PROPER SERVICE OF THE NOTIC E ISSUED U/S 143(2) WAS MADE WITHIN THE PRESCRIBED TIME LIMIT. CONSEQUENTLY, AS THE JURISDICTION TO MAKE ASSESSMENT U/S 143(3) OR 144 OF THE ACT GOT EXPIRED WITHOUT VA LID SERVICE OF NOTICE WITHIN TIME, THE IMPUGNED ORDER IS BAD IN LAW. WE, THEREFORE, Q UASH THE SAME AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 17. AS WE HAVE QUASHED THE ASSESSMENT ORDER DATED 1 8.12.2008 PASSED U/S 144 OF THE ACT, THE OTHER GROUNDS OF APPEAL TAKEN BY THE A SSESSEE ON MERITS HAVE BECOME ACADEMIC IN NATURE AND ARE, THEREFORE, DISMISSED. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13. 02.2019 SD/- SD/- (N. K. CHOUDHRY) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 13.02.2019 RKK