Shri Jayantilal Atmaram Patel,HUF, Ahmedabad V. The ACIT.,Circle-6, Ahmedabad

ITA 2936/AHD/2010

• Counselvise Citation: 293620514 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 26-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA D R
• Keywords: Invalid notice; Business income

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , .'.#$%, '& ' ' BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T.A. NO.2936/AHD/2010 ( ) * ) * ) * ) * / / / / ASSESSMENT YEAR : 2006-07) JAYANTILAL ATMARAM PATEL HUF 30-SARVODAY NAGAR-1 BHUGANGDEV CHAR RASTA SOLA ROAD AHMEDABAD ) ) ) ) / VS. THE ASST.CIT CIR-6 AHMEDABAD + '& ./,- ./ PAN/GIR NO. : AABHJ 0502 K ( +. / // / APPELLANT ) .. ( /0+. / RESPONDENT ) +. 1 ' / APPELLANT BY : SHRI DHIREN SHAH, A.R. /0+. 2 1 ' / RESPONDENT BY : SHRI D.C. SHARMA, D.R. )3 2 & / / / / DATE OF HEARING : 17/11/2011 4$* 2 & / DATE OF PRONOUNCEMENT : 13.1.12 '5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XVI, AHMEDAB AD DATED 16/08/2010 PASSED FOR A.Y. 2006-07. 2. SEVERAL GROUNDS HAVE BEEN RAISED WHICH ARE REPRO DUCED AS UNDER:- 1) THE ORDER PASSED BY THE LD CIT(A) IS AGAINST L AW EQUITY AND JUSTICE AND SAME IS WHOLLY ILLEGAL, UNLAWFUL AND BA D IN LAW. ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 2 - 2) THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN UPHOLD ING THE VALIDITY OF THE ASSESSMENT ORDER IN ABSENCE OF SERV ICE OF NOTICE U/S 143(2) OF THE ACT TO THE APPELLANT. 3) THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT PR OVIDING OPPORTUNITY TO THE APPELLANT TO REBUT THE REMAND RE PORT DATED 12-8-2010 OBTAINED FROM THE LD.A.O. 4) THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/OR F ACTS UPHOLDING THE ORDER OF THE LD. A.O. IN CONSIDERING LONG TERM CAPITAL GAIN AS BUSINESS INCOME AND THUS UPHOLDING ADDITION OF RS.25,28,810/-. 5) THE LD CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/OR FA CTS UPHOLDING THE ORDER OF THE LD. A.O. IN CONSIDERING SHORT TERM CAPITAL GAIN OF RS.18,58,771/- AS BUSINESS INCOME. 6) THE LD CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/OR FA CTS UPHOLDING THE ORDER OF THE LD. A.O. IN REGARDS TO N OTIONAL INTEREST INCOME OF RS.134770/-. 7) THE LD CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/OR FA CTS UPHOLDING THE ORDER OF THE LD. A.O. IN REGARDS TO D ISALLOWANCE OF RS.13953/- U/S.14A OF THE ACT. 8) THE LD CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/OR FA CTS UPHOLDING THE ORDER OF THE LD. A.O. IN REGARDS TO N ON ALLOWING CLAIM OF THE APPELLANT OF RS.11,224/- OF PROFESSION AL FEES. 3. AT THE OUTSET, THE LD.AR CHALLENGED THE VALIDITY OF THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T.ACT DATED 26/12/ 2008. IN THIS REGARD, GROUND NOS.1, 2 & 3 WERE SERIOUSLY PRESSED AND ARGU ED. ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 3 - 4. THE APPELLANT IS ASSESSED AS HUF AND STATED TO B E DERIVING INCOME FROM THE BUSINESS OF SHARE TRADING. FOR THE YEAR U NDER CONSIDERATION, RETURN OF INCOME WAS FILED ON 11/12/2006 DECLARING INCOME OF RS.25,41,970/-. THE ASSESSEE HAD SHOWN THE INCOME UNDER THE HEADS SHORT-TERM CAPITAL GAIN AND LONG-TERM CAPITAL GAIN . HOWEVER, THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE WAS IN THE BUSINESS OF SHARE TRAD ING FOR A.Y. 2006-07. THEREUPON, INCOME FROM SHARE TRADING WAS ASSESSED A T RS.43,87,581/- AND THE TOTAL INCOME WAS ASSESSED AT RS.45,71,687/-. W ITH THIS BRIEF BACKGROUND, ABOUT THE NATURE OF THE BUSINESS, NOW W E HAVE TO PROCEED WITH THE ISSUE RAISED BEFORE US IN RESPECT OF THE VALIDI TY OF THE NOTICE ISSUED U/S.143(2) OF THE I.T.ACT. 4.1. AS PER THE FIRST PAGE OF THE ASSESSMENT ORDER, INITIALLY THE RETURN WAS PROCESSED U/S.143(1) OF THE I.T.ACT WHICH WAS SELEC TED FOR SCRUTINY UNDER CASS. THE ASSESSING OFFICER HAS NOTED THAT A NOTIC E U/S.143(2) OF THE I.T.ACT WAS ISSUED ON 16/11/2007 AND AS PER ASSESSI NG OFFICER, THE SAME WAS DULY SERVED UPON THE ASSESSEE ON 21/11/2007. IT HAS ALSO BEEN NOTED BY THE ASSESSING OFFICER THAT THEREAFTER A NOTICE U /S.142(1) OF THE I.T.ACT ALONG WITH QUESTIONNAIRE WAS ISSUED AND SERVED ON 0 5/09/2008 UPON THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. THERE I S NO OTHER DISCUSSION IN THIS REGARD AS FAR AS THE ASSESSMENT ORDER IN QUEST ION IS CONCERNED. 5. THE IMPUGNED ISSUE WAS RAKED UP BEFORE THE FIRST APPELLATE AUTHORITY WHO HAS DISMISSED THE GRIEVANCE OF THE ASSESSEE IN THE FOLLOWING MANNER:- ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 4 - 2.1 THIS IS REGARDING NOT SERVING THE NOTICE UNDE R SECTION 143[2] IN TIME AND THEREFORE THE ORDER IS VOID IN THE EYES OF LAW. IN THE ASSESSMENT ORDER, THE AO HAS STATED THAT THE RETUR N OF INCOME FOR AY 2006-07 WAS FILED ON 11.12.2006 AND THE NOTICE UNDE R SECTION 143[2] WAS ISSUED ON 16.11.2007 AND WAS DULY SERVED ON THE ASSESSEE ON 21.11.2007. THE APPELLANT HAS STATED THAT NO SUCH NOTICE WAS RECEIVED BY IT. THE APPELLANT ARGUED THAT HE RAISE D THE OBJECTION FOR THE FIRST TIME DURING THE ASSESSMENT PROCEEDINGS. THE APPELLANT HAS STATED THAT TILL DATE NO SUCH PROOF HAS BEEN GIVEN TO HIM. THE APPELLANT HAS FILED AN AFFIDAVIT THAT HE AND HIS WI FE WERE OUTSIDE INDIA FROM 29.07.2005 TO 07.03.2008. HIS SON WAS OUTSIDE INDIA FROM 27.04.2007 TO 15.02.2008 AND HIS WIFE WAS OUTSIDE I NDIA FROM 17.04.2006 TO 31.03.2009 AND HENCE THE NOTICE WAS N OT SERVED UPON THEM. 2.2. I HAVE CONSIDERED THE SUBMISSION MADE BY THE A PPELLANT. IT IS VERY INTERESTING THAT NEITHER THE APPELLANT NOR HIS RELATIVES WERE IN INDIA BUT STILL THE INCOME TAX RETURN WAS FILED ON 11.12.2006 WHERE THE COLUMN OF VERIFICATION AS TO WHO IS SIGNING IS UNFILLED BUT THERE IS SIGNATURE IN THE SPACE FOR THE SIGNATURE. THE A SSESSING OFFICER WAS ASKED TO GIVE HIS REPORT ON THE ISSUE OF SERVIC E OF NOTICE. VIDE LETTER DATED 12.08.2010, THE ASSESSING OFFICER STAT ED THAT THE INITIAL NOTICE ISSUED UNDER SECTION 143[2] DATED 16.11.2007 WAS DULY SERVED ON THE ASSESSEES REPRESENTATIVE. MR.PRASHANT J PA TEL WHO IS THE CONSTITUTED AUTHORITY OF THE ASSESSEE BECAUSE NOT O NLY THE INCOME TAX RETURN BUT THE ACCOMPANIED DOCUMENTS WERE SIGNED BY THE CONSTITUTED ATTORNEY MR.PRASHANT J.PATEL. THE INCOME TAX RETUR N WAS FILED ON 11.12.2006 BUT THE VERIFICATION COLUMN OF INCOME TA X RETURN WAS NOT FILLED UP BUT IT WAS SIGNED BY MR.PRASHANT J PATEL. THE COPY OF THE NOTICE DATED 16.11.2007 RECEIVED ON 21.11.2007 WAS ENCLOSED BY THE AO ALONG WITH THE LETTER. COPY OF THE AO'S LETTER WITH ENCLOSURES ARE ATTACHED WITH THIS APPELLATE ORDER. THE AO FU RTHER STATED THAT THE ISSUE OF NON-SERVICE OF THE INITIAL NOTICE WAS NOT RAISED BY THE AUTHORIZED REPRESENTED OF THE ASSESSEE WHO ATTENDED ON 05.09.2008, 08.10.2008, 21.11.2008, 26.11.2008, 01.12.2008 AND 05.12.2008, AND THEREFORE, THE ASSESSEE CANNOT TAKE SUCH A PLEA SE AT THIS STAGE. IN VIEW OF THE ABOVE, I AGREE WITH THE ASSESSING OF FICER THAT THERE IS NO MERIT IN THE ARGUMENT OF THE APPELLANT. IF THE ASS ESSEE ALONGWITH ALL ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 5 - RELATIVES DISAPPEAR FROM INDIA CAN HE AVOID ALL LEG AL LIABILITIES IN INDIA. HOWEVER, THE INITIAL NOTICE WAS ISSUED AND SERVED WITHIN TIME AND AS PER LAW. THIS GROUND OF APPEAL IS THEREFORE DISMISSED. BEING AGGRIEVED NOW THE ASSESSEE IS BEFORE US CHALL ENGING THE VALIDITY OF THE SERVICE OF THE NOTICE U/S.143(2) OF THE I.T.ACT ALLEGED TO HAVE NOT BEEN SERVED ON THE ASSESSEE OR ANY OF HIS REPRE SENTATIVE. 6. WHEN THE BENCH OF THE TRIBUNAL HAS HEARD THIS IS SUE, THEN IT WAS DECIDED TO PASS INTERIM ORDER THROUGH WHICH CERTAIN DIRECTIONS WERE ISSUED TO THE REVENUE DEPARTMENT TO VERIFY CERTAIN FACTS C ONCERNING SERVICE OF NOTICE. THE SAID INTERIM ORDER OF THE TRIBUNAL DAT ED 07/04/2011 IS WORTH FOR REPRODUCTION, HENCE REPRODUCED BELOW:- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MUKUL KR. SHRAWAT, JM AND D.C.AGRAWAL , AM JAYANTILAL ATMARAM PATEL HUF, 30, SARVODAY NAGAR-1, BHUYANGDEV CHAR RASTA, SOLA ROAD, AHMEDABAD. VS. ASSTT. CIT, CIRCLE-6, AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI DHIREN SHAH & M. CHAJJAD, ARS RESPONDENT BY:- MRS. CHHAVI ANUPAM, CIT, DR & G.S. SOURYAWANSI, DR INTERIM ORDER PER D.C. AGRAWAL, ACCOUNTANT MEMBER . IN THIS CASE, IN ITS APPEAL FILED BY THE ASSESSEE GROUND NO.2 HAS BEEN RAISED AS UNDER :- ITA NO.2936/AHD/2010 ASST. YEAR 2006-07 ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 6 - (2) THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN UPHOLD ING THE VALIDITY OF THE ASSESSMENT ORDER IN ABSENCE OF SERVICE OF NOTICE U/S 143(2) OF THE ACT TO THE APPELLANT. 2. WHILE ARGUING THIS GROUND, THE LD. AR FOR THE AS SESSEE SUBMITTED THAT NOTICE U/S 143(2) HAS NOT BEEN SERVED ON HIM WITHIN 12 MONTHS OF END OF THE MONTH IN WHICH RETURN WAS FILED. THEREFORE, ENTIRE ASSESSMENT PROCEEDINGS ARE INVALI D. 3. ON THE OTHER HAND, LD. DR PRODUCED BEFORE US REM AND REPORT OF THE AO DATED 12.8.2010 SUBMITTED BY HIM TO THE LD. CIT(A) (XVI) ENCLOSING THEREWITH A COPY OF THE NOTICE U/S 143(2) WHICH WAS PURPORTED TO BE SERVED ON ONE SHRI PRASHA NT JAYANTILAL ATMARAM ON 21.11.2007, AS CLAIMED BY THE AO IN THE REMAND REPORT. EVEN IN THE ASSESSMENT ORDER THE AO HAS MENTIONED THAT NOTICE U/S 143(2) WAS ISSUED ON 16.11.2007 AND WAS SERVED ON ASSESSEE ON 21.11.2007. 4. IN RESPONSE TO THIS LD. AR FOR THE ASSESSEE SUBM ITTED THAT SHRI JAYANTILAL ATMARAM PATEL, THE KARTA OF HUF AND HIS SON SHRI PRASHANT J. PA TEL ON WHOM THE NOTICE IS PURPORTED TO BE SERVED WAS OUT OF INDIA WHICH IS SUPPORTED BY COPIE S OF PASS PORT ENCLOSED WITH THE PAPER BOOK. AS PER DETAILS GIVEN ABOUT THEIR STAY IN INDIA ON T HE BASIS OF ENTRIES IN THE PASS PORT, THE LD. AR POINTED OUT THE PERIOD OF STAY OF THE TWO PERSONS I N INDIA, AS UNDER :- JAYANTILAL A. PATEL, IN INDIA FROM TO 01.11.2003 27.01.2004 08.03.2005 29.08.2005 07.04.2008 TILL DATE PRASHANT J. PATEL IN INDIA FROM TO UPTO 24.08.2005 08.12.2005 10.04.2006 05.07.2006 03.09.2006 23.01.2007 27.04.2007 15.02.2008 13.04.2008 ON THE BASIS OF ABOVE, IT WAS SUBMITTED BEFORE US T HAT ON 21.11.2007 SHRI PRASHANT J. PATEL WAS NOT IN INDIA AND, THEREFORE, NOTICE U/S 143(2) COUL D NOT HAVE BEEN SERVED ON HIM AND, THEREFORE, HE COULD NOT HAVE SIGNED ON THE NOTICE. IN OTHER WO RDS, SOMEBODY ELSE MIGHT HAVE SIGNED FOR PRASHANT J. PATEL. THEREFORE, IT WILL NOT BE A VALI D SIGNATURE. THEREFORE, ASSESSMENT SHOULD BE DECLARED AS AB INITIO VOID. 5. THE LD. DR ON THE OTHER HAND SUBMITTED THAT IT I S NOT A CASE WHERE EVERY ONE IN THE FAMILY MIGHT HAVE LEFT INDIA. IT IS A CASE OF HUF, THEREFO RE, SOMEBODY ELSE MAY BE IN THE HOUSE WHO MIGHT HAVE RECEIVED THE NOTICE AND SIGNED AS PRASHA NT J. PATEL. 6. THE LD. AR DENIED THAT NOTICE WAS SERVED EITHER ON KARTA OR ON PRASHAT J. PATEL OR ANY OTHER MEMBER OF THE FAMILY. 7. AFTER HEARING THE PARTIES, WE ARE OF THE CONSIDE RED VIEW THAT THE COMMISSIONER OF INCOME-TAX CONCERNED SHOULD CARRY OUT OR CAUSE TO C ARRY OUT ENQUIRIES SO AS TO FIND OUT- ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 7 - (1) UPON WHOM THE NOTICE U/S 143(2) AS ENCLOSED WITH TH E REMAND REPORT OF AO DATED 12.8.2010 ADDRESSED TO CIT(A) (XVI) WAS SERVED ? (2) WHETHER IT WAS SHRI PRASHANT J. PATEL AS SUCH OR SO MEBODY ELSE HAD SIGNED ON BEHALF OF SHRI PRASHANT J. PATEL? (3) WHETHER IT WAS AN ACT OF THE DEPARTMENTAL OFFICER O R EMPLOYEE FORGING THE SIGNATURE OF SHRI PRASHANT J. PATEL AND SHOWING THE SERVICE W ITHIN THE STATUTORY PERIOD OF 12 MONTHS FROM FILING OF THE RETURN? IN THIS REGARD, THE OFFICER CARRYING OUT THE ENQUIR Y MAY EXERCISE ALL HIS POWERS VESTED IN HIM UNDER THE INCOME-TAX ACT INCLUDING SUMMONING ANY OF THE MEMBERS OF THE FAMILY, EMPLOYEE, SERVANTS AND EVEN TAKING SPECIMEN SIGNATURE(S) AND REFERRING TO THE HAND-WRITING EXPERT, IF CONSIDERED NECESSARY. 8. THE REPORT ALONG WITH EVIDENCE COLLECTED SHOULD BE SUBMITTED TO THE BENCH WITHIN THREE WEEKS OF THE RECEIPT OF THIS ORDER. ORDER WAS PRONOUNCED IN OPEN COURT ON 7/4/11. SD/- SD/- (MUKUL KR. SHRAWAT) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED : 7/4/11. 7. THEREAFTER, A REPORT DATED 14/06/2011 WAS FURNIS HED; REPRODUCED BELOW:- NO.CIT-III/HQ-TECH./R-6/JAPHUF/2011-12. DATE : 14-06-2011. THE REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD. SIR, SUB : ITATS INTERIM ORDER IN THE CASE OF SHRI JA YANTILAL ATMARAM PATEL I- HUF ITA NO.2936/AHD/2010 A.Y . 2006-07 REPORT REG. HG. ON 28/6/2011 BENCH D . *** PLEASE REFER TO THIS OFFICE LETTER OF EVEN NUMBER D ATED 20-05-2011 ON THE ABOVE SUBJECT, THROUGH WHICH A REQUEST WAS MADE TO THE HO N.MEMBERS TO ALLOW ONE MONTHS ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 8 - TIME TO FURNISH THE REPORT SOUGHT BY THEM IN PARA 7 OF THEIR ORDER DATED 7-4-2011, IN THE AFORESAID CASE. 2. IN THEIR ORDER, THE HON.MEMBERS HAVE RAISED THE FOLLOWING QUERIES : (1) UPON WHOM THE NOTICE U/S.143(2) AS ENCLOSED W ITH THE REMAND REPORT OF AO DATED 12.8.2010 ADDRESSED TO CIT(A)(XVI) WAS SER VED? (2) WHETHER IT WAS SHRI PRASHANT J.PATEL AS SUCH OR SOM EBODY ELSE HAD SIGNED ON BEHALF OF SHRI PRASHANT J.PATEL ? (3) WHETHER IT WAS AN ACT OF THE DEPARTMENTAL OFFICER O R EMPLOYEE FORGING THE SIGNATURE OF SHRI PRASAHNT J.PATEL AND SHOWING THE SERVICE WITHIN THE STATUTORY PERIOD OF 12 MONTHS FROM FILING OF THE RE TURN. 3. AS REGARDS THE FIRST QUERY, IT IS NOT POSSIBLE FOR US TO VERIFY AND STATE THE NAME OR IDENTITY OF THE PERSON ON WHOM THE IMPUGNED NOTICE U/S.143(2) OF THE I.T. ACT DATED 16- 11-2007 WAS SERVED. THIS IS BECAUSE, THE PERSON WH O RECEIVED THE NOTICE ONLY PUT HIS/HER SIGNATURE WITHOUT WRITING THE FULL NAME. WHAT IS C LEAR IS THAT, THE NOTICE WAS RECEIVED BY A PERSON WHOSE SURNAME WAS PATEL. 4. AS REGARDS THE SECOND QUERY, VERIFICATION OF THE RECORDS SHOW THAT IT WAS NOT SHRI PRASHANT J.PATEL WHO HAD RECEIVED / SIGNED THE NOT ICE. THIS IS ESTABLISHED BY COMPARING THE SIGNATURE OF SHRI PRASHANT PATEL AS FOUND ON TH E ENCLOSURES TO THE RETURN OF INCOME FILED BY THE ASSESSEE, AND ALSO HIS SAMPLE SIGNATUR ES OBTAINED BY THE ACIT, CIRCLE-6 WHILE CARRYING OUT VERIFICATIONS FOR THE PURPOSE OF REPLYING TO THE QUERIES RAISED BY THE HON.MEMBERS. HOWEVFER, IT IS NOT POSSIBLE FOR US T O STATE WHETHER THE IMPUGNED NOTICE U/S.143(2) WAS SIGNED BY SOMEBODY ON BEHALF OF SH RI PRASHANT J.PATEL. WHAT IS CLEAR IS THAT, SOMEBODY, WHO WAS AVAILABLE AT THE GIVEN ADDR ESS OF THE ASSESSEE, HAD RECEIVED THE SAID NOTICE. 5. AS REGARDS THE THIRD QUERY, IT IS SUBMITTED THAT , IT DEFINITELY WAS NOT AN ACT OF ANY DEPARTMENTAL OFFICER OR EMPLOYEE WHO COULD HAVE FOR GED THE SIGNATURE OF SHRI PRASHANT J.PATEL IN ORDER TO ENSURE THE SERVICE OF THE NOTIC E WITHIN THE STIPULATED PERIOD OF 12 MONTHS. 6. HAVING FURNISHED REPLIES TO THE QUERIES POSE4D B Y THE HON.MEMBERS AS ABOVE, IT IS FURTHER SUBMITTED THAT A NOTICE SERVER REGISTER WAS MAINTAINED BY THE NOTICE SERVERS POSTED IN RANGE-6, AHMEDABAD DURING THE FINANCILA Y EARS, 2006-07 AND 2007-08. IN THIS REGISTER, THE NOTICE SERVERS ENTERED THE NOTIC ES RECEIVED BY THEM FROM THE ASSESSING OFFICERS OF RANGE-6 ON DIFFERENT DATES, FOR THE PUR POSE OF SERVING THEM ON THE CONCERNED ASSESSEES. ONCE THE NOTICES WERE SERVED, THE NOTIC E SERVERS BRACKETED THE NOTICES OR ROUNDED THEM OFF AND PUT THEIR SIGNATURES TO SHOW T HAT THE NOTICES WERE DULY SERVED. 7. IN THIS REGISTER, UNDER THE DATE OF 19-11-2007 THERE IS AN ENTRY SHOWING THE NAME OF PATEL JAYANTILAL ATMARAM AGAINST WHOM A NOTICE U/S.143(2) IS ENTERED FOR THE ASSESSMENT YEAR 2006-07. THIS NOTICE, ALONGWITH TW O OTHERS, HAVE BEEN BRACKETED AND THE NOTICE SERVER WHO SERVED THE NOTICE HAS PUT HIS SIGNATURE THEREON. A COPY OF THE ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 9 - RELEVANT PAGE FROM THE REGISTER DULY CERTIFIED BY T HE ACIT, CIRCLE-6 IS ENCLOSED HEREWITH. THE REGISTER IN ORIGINAL WILL BE PRODUCED IF SO DES IRED BY THE HON.MEMBERS. 8. IT IS SUBMITTED THAT THE ENTRY OF THE NAME OF TH E ASSESSEE IN THE NOTICE SERVER REGISTER CLEARLY SHOWS THAT THE NOTICE U/S.143(2) WAS DULY SERVED ON THE ASSESSEE. 9. NOW, THE QUESTION REMAINS AS TO WHO RECEIVED THI S NOTICE ON 21-11-2007 ON BEHALF OF THE ASSESSEE? IT IS NOT ALWAYS POSSIBLE FOR THE HUMBLE NOTICE SERVER TO DEMAND PROOF OF IDENTITY OF THE PERSON RECEIVING A NOTICE. IT IS THEREFORE FOR THE ASSESSEE TO STATE BEFORE THE HON.MEMBERS AS TO WHO RECEIVED THE NOTIC E. IT COULD BE ANY PERSON OTHER THAN THE ASSESSEE OR HIS CONSTITUTED ATTORNEY. IT DID NOT NECESSARILY HAVE TO BE ONE OF THEM FOR THE SERVICE TO BE A VALID SERVICE. 10. IT IS FURTHER SUBMITTED THAT THE PERSON WHO SIG NED THE ASSESSEES RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07, CANNOT BE IDENTIFI ED FOR THE SIMPLE REASON THAT THE PERSON WHO SIGNED THE RETURN DID NOT ENTER HIS NAME IN THE VERIFICATION COLUMN. THE SIGNATURE IS DATED 22-07-2006, BUT THE RETURN OF IN COME WAS FILED ON 11-12-2006. THERE ARE SEVERAL ENCLOSURES TO THE RETURN OF INCOME, ALL OF WHICH ARE SIGNED BY SHRI PRASHANT J.PATEL WHO IS THE ELDEST SON OF THE KARTA OF THE A SSESSEE HUF AND WHO HAS SIGNED THE DOCUMENT AS THE CONSTITUTED ATTORNEY OF THE HUF, JAYANTILAL ATMARAM PATEL. 11. THE AFORESAID FACTS CLEARLY SHOW THAT SINCE THE KARTA WAS MOST OF THE TIME LIVING ABROAD DURING THE RELEVANT PERIOD, THERE WERE OTHER PEOPLE WHO WERE SIGNING DOCUMENTS ON HIS BEHALF. IT IS ONE SUCH OTHER PERSON WHO HAD RECEIVED (AND SIGNED) ON 21-11-2007 THE NOTICE U/S.143(2) OF THE I.T.ACT DATED 16-11-20 07. THE KARTA AND THE HUF CANNOT NOW ABSOLVE ITSELF AND CLAIM THAT THE IMPUGNED NOTI CE WAS NOT VALIDLY SERVED. YOURS FAITHFULLY, SD/- [SIDDHARTHA MUKERJEE] COMMISSIONER OF INCOME TAX, AHMEDABAD-III, AHMEDABAD. ENCL : AS ABOVE. COPY TO : THE CIT (DR),ITATD BENCH, AHMEDABAD SD/-. ITO (HQ-TECH-III), AHMEDABAD 7.2. FROM THE SIDE OF THE REVENUE, AN ANOTHER CORRE SPONDENCE DATED 07/06/2011 HAS ALSO BEEN PLACED ON RECORD THROUGH W HICH ASST.CIT CIRCLE-6 AHMEDABAD HAS CONVEYED CERTAIN FACTS TO THE CIT-III AHMEDABAD; REPRODUCED BELOW:- ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 10 - NO.ACIT/CIR.6/JAP/2011-12 DATE : 07/06 /2011 TO, THE COMMISSIONER OF INCOME TAX AHMEDABAD-III AHMEDABAD. [ SUBMITTED THROUGH THE ADDL.C.I.T. RANGE-6, AHMEDA BAD ] SIR, SUB : ITATS INTERIM ORDER IN THE CASE OF SHRI J AYANTILAL A.PATEL (HUF), - SUBMISSION OF REPORT REGARDING. REF : (I) ITATS D BENCH ORDER ITAT NO.2936/AHD /2010 A.Y. 2006-07 DATED 07/04/2011 (II) CITS LETTER HQ-/TECH-III/JAP-HUF/2 010-11 DATED 20/05/2011. PLEASE REFER TO THE ABOVE. 2. IN ACCORDANCE WITH THE DIRECTIONS ISSUED BY HON BLE ITAT AND ALSO FURTHER TO THE LETTER ADDRESSED TO REGISTRAR ITAT. SEEKING TIME F OR FURNISHING VERIFICATION. IT IS SUBMITTED THAT SUMMONS WERE ISSUED TO THE FOLLOWING PERSONS. SHRI JAYANTILAL ATMARAM PATEL (HUF). SMT. HASUMATIBEN J.PATEL (WIFE). SHRI PRASHANTT J.PATEL (ELDER SON) CONSTITUTED ATTO RNEY SHRI VIPUL J.PATEL (SON). FOR VERIFICATION OF DETAILS LIKE, PASS PORT, SIGNAT URE ON PAN AND SIGNATURE VERIFICATION FROM WITH THE BANK. IN RESPONSE TO SUMMONS ISSUED ALL THE PERSONS EXCEP T SHRI VIPUL J.PATEL (SECOND SON) HAVE APPEARED. SHRI VIPUL J.PATEL IS IN U.S. ALL THE FAMILY MEMBERS HAVE PRODUCED THE COPIES OF PASS PORT, STATING THAT THEY ARE OUT OF INDIA AT THE TIME OF FILING OF INCOME TAX RETURN AND ACCOMPANIED DOCUMENTS. DURING THE E XAMINATION IT IS FOUND THAT THE RETURN OF INCOME VERIFICATION COLUMN, EVEN THOUGH I T WAS NOT FILLED BUT STATED TO HAVE BEEN SIGNED AT ABROAD. SIMILARLY, THE ACCOMPANIED DOCUMENTS WERE STATED TO BE SIGNED BY SHRI PRASHANT J.PATEL CONSTITUTED ATTORNEY. THE SE WERE SIGNED DURING JULY, 2006 BUT ENCLOSED TO THE RETURN OF INCOME SIGNED BY THE ASSE SSEE AND SENT TO SHRI MAHESH CHAJAD, C.A. OF THE ASSESSEE AND RETURN WAS FILED ON 11/12/ 2006 BY THE AUDITORS OFFICE. SHRI JAYANTILAL ATMARAM PATEL AND SHRI PRASHANTT J. PATEL HAVE STATED THAT THEY HAVE NOT RECEIVED THE INITIAL HEARING NOTICE U/S.14 3(2). THE ASSESSEE FURTHER STATES THAT HE IS PRESENT IN INDIA SINCE 07/04/2008 AND HE HAS ATTENDED INCOME TAX OFFICE DURING SEPTEMBER, OCTOBER, NOVEMBER AND DECEMBER, 2008 RES PECTIVELY AND ACTIVELY ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 11 - PARTICIPATED IN SCRUTINY PROCEEDINGS. THE ASSESSEE S OBJECTION IN ASSESSMENT PROCEEDINGS TOWARDS NON RECEIPT OF NOTICE WITHIN 12 MONTHS FROM THE DATE OF FILING OF RETURN WAS ALREADY ANSWERED BY THE DEPARTMENT ON 05 /12/2008 (DURING THE COURSE OF ASSESSMENT PROCEEDINGS). REGARDING SPECIFIC OBSERVATION OF HON'BLE ITAT IT I S HUMBLY SUBMITTED THAT. (I) IT IS NOT POSSIBLE TO IDENTIFY THE PERSON TO WHOM T HE ORIGINAL NOTICE U/S.143(2) WAS SERVED DUE TO PASSAGE OF TIME. (II) SINCE THE VERIFICATION COLUMN WAS NOT FILLED AND AL SO NO NAME WAS MENTIONED BELOW THE ASSESSEES SIGNATURE IT WAS CON STRUED AS CONSTITUTED ATTORNEY SIGNATURE. NOW IT IS VERIFIED AND ASSESSEE HAS ALSO CONFIRMED THAT VERIFICATION PAGE OF RETURN OF INCOME FILED ON 11/12/2006 WAS SIGNED BY SHRI JAYANTILAL A.PATEL. HOWEVER, THE ELDER SON OF THE ASSESSEE, SHRI PRASHANT J.PATEL HAS STAT ED AND CONFIRMED THAT HE HAS PUT IN 33 SIGNATURES AS CONSTITUTED ATTORNEY TO THE ASSESSEE AND ALL THE DOCUMENTS WERE ATTACHED TO THE RETURN O F INCOME AND SENT TO SHRI MAHESH CHAJADS OFFICE (CA) FOR SUBMISSION IN INCOME TAX OFFICE. THUS THE RETURN AND ACCOMPANIED DOCUMENTS STATED TO HAVE BEEN PREPARED IN JULY (THE EXACT DATE OF SIGNATURE IS NOT KNOWN) BUT RETURN WAS FILED ON 11/12/2006 THROUGH SHRI MAHESH CHAJAD, AUDITOR OF THE ASSESSEE. AFTER DUE ENQUIRY AND EXAMINATION OF MEMBERS OF THE FAMILY AND EMPLOYEES ETC. IT IS SEEN AND OBSERVED WITH A SUBMISSION THAT RETU RN OF INCOME .. A DOCUMENT AS WHOLE TO BE FILED WITH THE DEPARTMENT AND IT CANNOT BE BR OKEN UP IN TO PARTS, SO AS TO BE SIGNED BY ONE PERSON IN SOME PART AND BY ANOTHER PERSON FO R THE REMAINING PARTS. THE RETURN OF INCOME SIGNED BY SHRI JAYANTILAL A.PATEL AND ACC OMPANIED DOCUMENTS STATED TO BE PREPARED IN JULY 2006 SIGNED BY SHRI PRASHANT J.PAT EL AT 33 PLACES AND FINALLY FILED RETURN OF INCOME ON 11/12/2006. THIS IT SELF SHOWS THE INCONSISTENCY AND INCORRECTNESS OF THE ASSESSEES CONDUCT. AFTER ENQUIRY AND EXAMINATION OF RECORDS AVAILABLE. I AM OF THE OPINION THAT NOTICE U/S.143(2) WAS DULY ISSUED AND SERVED, THOUG H AT THIS STAGE, AFTER LAPSE OF ALMOST 4 YEARS IT IS NOT POSSIBLE TO GATHER EVIDENCES AS T O WHO HAS EXACTLY PRESENT ON THE DATE AND SERVICE AT THE ASSESSEE ADDRESS. THE FACTUAL POSITION AS AVAILABLE FROM RECORD AND A SCERTAINED THROUGH ENQUIRY, IT IS SUBMITTED THAT IT MAY NOT BE POSSIBLE TO STATE W HETHER SOMEBODY ELSE HAS SIGNED ON BEHALF OF SHRI PRASHANT J.PATEL OR ASSESSEE AT THE GIVEN ADDRESS/TIME OF SERVICE OF SUCH NOTICE. IT IS FURTHER SUBMITTED THAT IT IS NOT POSSIBLE TO ASCERTAIN, WHO WAS PRESENT AT THE GIVEN ADDRESS 4 YEARS AGO. IT IS ONLY FOR THE ASSE SSEE TO STATE WHO COULD HAVE ACCEPTED THE NOTICE ON HIS BEHALF. IT IS FURTHER ASCERTAINE D THAT THE THEN ASSESSING OFFICER USED TO MAINTAIN A NOTICE SERVER REGISTER WHERE IN NOTICES DULY ISSUED WERE ENTERED IN THE ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 12 - REGISTER. I AM ALSO SUBMITTING HEREWITH A CERTIFIE D XEROX COPY OF THE NOTICE SERVER REGISTER WITH THE RELEVANT PAGE WITH NAME OF THE AS SESSEE. IT IS CRYSTAL CLEAR UP ON VERIFICATION AND SCRUTINY OF THIS REGISTER, THE NOT ICE U/S.143(2) IN THE NAME OF SHRI JAYANTILAL ATMARAM PATEL FOR A.Y. 2006-07 WAS GIVEN TO NOTICE SERVER ON 19/11/2007 AND SERVED ON 21/11/2007. THEREFORE, IT IS SUBMITTED THAT EVIDENCE REGARDING ISSUE OF NOTICE WELL WITH IN TIME AND SERVICE THERE OF IS AVAILABLE ON RECORD. SUBMITTED FOR NECESSARY INSTRUCTIONS IF ANY. YOURS FAITHFULLY, SD/- (T.SATYANANDAM) ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE-6, AHMEDABAD. 8. WITH THIS FACTUAL BACKGROUND, WE HAVE HEARD BOTH THE SIDES. THE LD.AR MR.DHIREN SHAH HAS CONTESTED THAT THE DATE ON WHICH I.E. 21/11/2007 THE REVENUE DEPARTMENT HAD ALLEGED THE SERVICE OF N OTICE U/S.143(2) OF THE I.T.ACT DATED 16/11/2007, THE KARTA OF HUF SHRI JAYANTILAL A.PATEL AND HIS SON SHRI PRASHANT JAYANTILAL PATEL WERE OUT OF COUNTRY. THE LD.AR HAS FURNISHED PARTICULARS OF STAY OF BOTH THE PERSONS I N INDIA AS UNDER:- A.Y. 2006-07 PARTICULARS OF STAY OF JAYANTILAL A. PATEL IN IDNIA FROM TO 01.11.2003 27.01.2004 08.03.2005 TO 29.08.2005 07.04.2008 TO TILL DATE PARTICULARS OF STAY OF PRASHANT JAYANTILAL PATEL IN IDNIA FROM TO UPTO 24.08.2005 08.12.2005 TO 10.04.2006 05.07.2006 TO 03.09.2006 23.01.2007 TO 27.04.2007 15.02.2008 TO 13.04.2008 ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 13 - 8.1. IT HAS ALSO BEEN POINTED OUT THAT THE VALIDITY FO THE SERVICE OF THE NOTICE HAS BEEN CHALLENGED BEFORE THE ASSESSING OFF ICER VIDE A LETTER DATED 26/11/2008; REPRODUCED BELOW:- JAYANTILAL A PATEL HUF 30, SARVODAYNAGAR SOCIETY SOLA ROAD AHMEDABAD 26-11-2008 TO THE ASST COMM.OF I.TAX CIRCLE-6, AHMEDABAD DEAR SIR, SUB : ASSESSMENT PROCEEDINGS FOR THE A.Y. 2006-07 IN REFERENCE TO ABOVE, I WOULD LIKE TO STATE AS UND ER. I HAVE FILLED RETURN OF INCOME FOR THE YEAR UNDER R EFERENCE ON 11-12-2006 IN WARD- 6(2), AHMEDABAD. I HAVE NOT RECEIVED NOTICE U/S.14 3(2) OF THE ACT WITHIN 12 MONTHS OF FILLING OF RETURN AS PRESCRIBED TIME LIMI T TO ISSUE NOTICE UNDER THE ACT. WITHOUT PREJUDICE TO ABOVE AND UNDER PROTEST I AM S UBMITTING FOLLOWING DETAILS. 1. COPIES OF DEMAT STATEMENT FOR FINANCIAL YEAR 2003-0 4 & 2004-05. 2. STATEMENT SHARES GIVEN ON LOAN AND RECEIVED BACK FR OM PRASHANT J.PATEL WITH DEMAT STATEMENT. 3. COPIES OF BILLS FOR PURCHASE AND SALE OF SHARES FOR WHICH LONG TERM CAPITAL GAIN SHOWN. 4. A STATEMENT OF SHARES GIVEN ON LOAN TO PARTIES WITH THEIR DEMAT ACCOUNT. 5. COPY OF REVISED BALANCE SHEET. 6. COPY OF LETTER OF NAHAR INTERNATIONAL 7. STOCK STATEMENT. PL. FIND ABOVE IN ORDER. THANKING YOU FOR, JAYANTILAL A.PATEL HUF SD/- KARTA ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 14 - 9. THE LD.AR MR.DHIREN SHAH HAS ALSO MENTIONED THAT EVEN AFTER THE COMPLETION OF THE ASSESSMENT, THE ASSESSEE WROTE A LETTER DATED 27/01/2009 TO THE ASSESSING OFFICER REQUESTING TO PROVIDE THE PROOF OF SERVICE OF THE SAID NOTICE; REPRODUCED BELOW:- JAYANTILAL A.PATEL HUF 30, SARVODAYNAGAR SOCIETY SOLA ROAD AHMEDABAD DATE: 27-01-2009 TO, THE ASST.COMM. OF I.TAX CIRCLE-6, AHMEDABAD SUB : PROVIDING CERTIFIED COPY OF NOTICE ISSUED AN D SERVED U/S.143(2) OF THE ACT A.Y. 2006-07. DEAR SIR, IN REFERENCE TO ABOVE, DURING THE COURSE OF ASSESSM ENT PROCEEDINGS WE HAVE RAISED ISSUE REGARDING NON RECEIPT OF NOTICE U/S 14 3(2) OF THE ACT WITHIN STIPULATED TIME. IN REFERENCE TO SAME, YOUR GOOD SELF HAVE WROTE A L ETTER DATED 5-12-2008, WHERE IN YOU HAVE STATED THAT NOTICE U/S.143(2) OF THE ACT W AS PERSONALLY SERVED TO UNDERSIGNED. YOU ARE REQUESTED TO PROVIDE CERTIFIED COPY OF NOTI CE DATED 21-11-2007 WITH THE PROOF OF SERVICE. IN ANTICIPATION OF YOUR KIND CO-OPERATION. THANKING YOU, YOURS SINCERELY, FOR JAYANTILAL A.PATEL HUF SD/- KARTA ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 15 - 10. WE HAVE HEARD BOTH THE SIDES AT LENGTH. THE SH ORT ISSUE BEFORE US IS WHETHER THERE WAS A PROPER SERVICE OF NOTICE ISSUED U/S.143(2) DATED 16/11/2007 ALLEGED TO HAVE BEEN SERVED ON 21.11.200 7. FROM THE SIDE OF THE REVENUE, CERTAIN CORRESPONDENCE AND ENQUIRY IN THIS REGARD WAS MADE SPECIALLY AFTER AN INTERIM ORDER OF THE TRIBUNAL DA TED 7.4.2011, ALREADY REPRODUCED ABOVE. WE HAVE EXAMINED THE CORRESPON DENCE IN THIS REGARD AND THE GLARING FEATURE IS THAT THE REVENUE HAS ALM OST EXPRESSED ITS INABILITY TO IDENTIFY THE PERSON ON WHOM THE IMPUGNED NOTICE WAS SERVED. IN ONE OF THE LETTER DATED 2.9.2011, THE SR.DR HAS ADMITTED T HAT THE SAID NOTICE SERVER HAD VIOLATED THE PROCEDURE. RELEVANT PORTION IS REPRODUCED BELOW. DATE: 02.09.2011 TO THE DY.REGISTRAR HONBLE ITAT-D BENCH ABHINAV ARCADE AHMEDABAD SIR, SUB : FILING OF PAPER BOOK IN RESPECT TO REPORT OF THE UNDERSIGNED AFTER PROGRESS OF INQUIRY IN RESPECT TO INTERIM ORDER DAT ED 07.04.2011 IN THE CASE OF JAYANTILAL ATMARAM PATEL (HUF) VIDE ITA NO. 2936/AHD/2010 FOR A.Y. 2006-07. .. 4. MAY I ELABORATE, THE ASSESSEE FILED ITS RETURN OF I NCOME IN SARAL FORM FOR A.Y. 2006-07 ON 11.12.2006 IN THE OFFICE OF THE ACIT, CIR-6, AHMEDABAD. ON 16.11.2007, NOTICE U/S.143(2) WAS IS SUED FIXING THE DATE OF HEARING 12.12.2007. THE NOTICE HAS BEEN IS SUED SHRI B.K. SHRIMALI, ACIT, CIRCLE-6, AHMEDABAD. THE NOTICE IS PASTED ON THE BACK OF THE SARAL FORM. IT HAS BEEN SERVED ON 21.11.200 7 ON SOME MR.PATEL. ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 16 - THE SIGNATURE ON THE NOTICE SERVED ON 21.11.2007 AN D SIGNATURE ON VERIFICATION OF KARTA OF HUF DATED 22.07.2006 DIFFE RS. XEROX COPIES ARE ENCLOSED HEREWITH IN THE PAPER BOOK. (ANNEXURE-II). . 7.THE HON'BLE TRIBUNAL REQUIRED THE UNDERSIGNED TO TELL ABOUT THE PROCEDURE OF SERVICE OF NOTICE ETC. IN THIS MATTER , IT WAS DEPOSITED THAT NOTICE SERVER SHOULD CONTACT THE ASSESSEES GIVEN A DDRESS AND SERVE THE NOTICE ON ANY ADULT MEMBER. IN TOKEN OF SERVICE, T HE NOTICE SERVER SHOULD SECURE SIGNATURE OF THE FAMILY MEMBER. HE SHOULD I NQUIRE ABOUT THE NAME OF THE PERSON AND HIS IDENTITY AND RELATIONSHIP WIT H THE ASSESSEE. AFTER THIS, THE NOTICE SERVER SHOULD MARK THAT NOTICE IS SERVED UPON SUCH AND SUCH PERSON AND SHOULD MARK HIS OWN SIGNATURES. MAY I A DD THAT HERE IS A PECULIAR THING. THE NOTICE SERVER VIOLATED THE PRO CEDURE AND DID NOT COMPLETED THE FORMALITIES. NOTICE SERVER SECURED S IGN OF THE ASSESSEE ETC. ON THE NOTICE ITSELF AND ON THE NOTICE SERVER REGIS TER ALSO. IT MAY FURTHER BE POINTED OUT THAT THESE SIGNATURES ARE ALSO DIFFER. 8.THE UNDERSIGNED HEREBY GIVE HIS REPORT TO THE UPM OST ABILITY. THIS CASE WAS HEARD ON 01.09.2011. THANKING YOU, YOURS FAITHFULLY, SD/- (D C SHARMA) SR.DEPARTMENTAL REPRESENTATIVE ITAT, D-BENCH, AHMEDABAD EVEN THE COMMISSIONER OF INCOME-TAX AHMEDABAD-III LETTER DATED 14/06/2011 HAD STATED VIDE PARA-3, ALREADY REPRODUC ED SUPRA, THAT IT WAS NOT POSSIBLE TO VERIFY AND STATE THE NAME OR IDENTITY O F THE PERSON ON WHOM THE IMPUGNED NOTICE U/S.143(2) DATED 16.11.2007 WAS SER VED. IN THIS LETTER AN ANOTHER FACT VIDE PARA-11 HAS BEEN AFFIRMED THAT TH E KARTA OF THE HUF REMAINED MOST OF THE TIME OUT OF THE COUNTRY. IT W AS INFORMED THAT DURING THE RELEVANT PERIOD, THE KARTA WAS STAYING ABROAD. IT IS ALSO WORTH TO MENTION THAT IN COMPLIANCE OF THE DIRECTIONS OF THE INTERIM ORDER THE ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 17 - REVENUE DEPARTMENT HAD IN FACT ISSUED NOTICES TO TH E KARTA, HIS SONS AND OTHER FAMILY MEMBERS SO AS TO MATCH THE SIGNATURE O F ANYONE OF THEM WITH THE SIGNATURE ON THE SAID NOTICE. COPIES OF THO SE LETTERS REQUIRING THE ATTENDANCE OF THOSE PERSONS ARE ALSO PLACED ON RECO RD. BUT THE FACTUAL POSITION IS REMAINED THE SAME THAT THE SIGNATURE ON THE IMPUGNED NOTICE DID NOT MATCH WITH ANY OF THE FAMILY MEMBERS OR THE KAR TA HIMSELF. WE HAVE DRAWN THIS CONCLUSION BECAUSE THE REVENUE DEPARTMEN T HAS NOT INFORMED US OR CERTIFIED THAT THE SIGNATURE ON THE SAID NOTICE HAD MATCHED WITH ANY OF THE FAMILY MEMBER. 11. FROM THE SIDE OF THE ASSESSEE, COPIES OF THE PA SSPORT WERE PLACED BEFORE US AND IT IS ALSO WORTH TO PLACE ON RECORD T HAT THEIR ORIGINAL PASSPORTS HAVE ALSO BEEN DISPLAYED. FROM THOSE DATES OF TRAV ELLING, THE ASSESSEE HAS ESTABLISHED THAT THE KARTA HIMSELF AND HIS SON, WHO STAYS IN INDIA BOTH WERE OUT OF THE COUNTRY ON THE DATE WHEN IT WAS ALLEGED BY THE REVENUE DEPARTMENT THAT THE SAID NOTICE WAS SERVED ON 21/11 /2007. EVEN THE REVENUE DEPARTMENT HAS NOT CHALLENGED THE SAID CONT ENTION OF THE ASSESSEE. DUE TO THIS REASON, ATLEAST ONE FACT WAS PROVED AND CAN BE SAID TO BE UNCONTROVERTED THAT SHRI JAYANTILAL A. PATEL, KARTA AND HIS SON SHRI PRASHANT JAYANTILAL PATEL, BOTH WERE NOT PRESENT IN INDIA ON THE DAY WHEN THE NOTICE WAS CLAIMED TO HAVE BEEN SERVED. 12. IN THE LIGHT OF THE ABOVE FINDINGS ON FACTS, WE HAVE TO EXAMINE THE POSITION OF LAW AS PRONOUNCED BY SEVERAL HONBLE CO URTS. ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 18 - (A) IN THE CASE OF NRIPENDRA MISHRA VS. ITO 121 TTJ 701 (LUCKNOW) THE RESPECTED CO-ORDINATE BENCH HAS OPINE D THAT IN THE SAID CASE THE AO HAD SIMPLY BRUSHED ASIDE THE A SSESSEES OBJECTION ON THE GROUND THAT EARLIER A NOTICE U/S.1 43(2) HAD BEEN ISSUED AND THE SAME HAS BEEN SERVED BY THE INSPECTO R ON ONE R. THE TRIBUNAL HAS OPINED THAT REVENUE HAD TO ESTABLI SH THE SERVICE OF NOTICE U/S.143(2) ON THE ASSESSEE AND THAT TOO W ITHIN THE STIPULATED TIME AS PRESCRIBED UNDER THE PROVISO OF SECTION 143(2) OF THE IT ACT. FROM THE CORRESPONDENCE AS PLACED BEFORE THE TRIBUNAL AND ON THE BASIS OF THE RECORD A FINDING W AS GIVEN THAT IT WAS CLEAR THAT THE REVENUE HAD NOT ESTABLISHED THE IDENTITY OF R. EVEN IT WAS HELD THAT THERE WAS NO MATERIAL ON RECO RD TO ESTABLISH THAT R WAS AN AGENT OF THE ASSESSEE. ON THAT BASIS , WHEN THE REVENUE HAD NOT PROVED THE IDENTITY OF R THE ASSESS MENT ORDER WAS ANNULLED BY THE TRIBUNAL. (B) IN THE CASE OF ITO VS. BEDI ENTERPRISES 114 TTJ 706 (LUCKNOW) THE RESPECTED CO-ORDINATE BENCH HAS EXPRE SSED THAT AS FAR AS POSSIBLE SERVICE SHOULD BE EFFECTED ON THE P ERSON NAMED IN THE NOTICE AND IF IT COULD NOT BE POSSIBLE, THEN TH E SAME SHOULD BE EFFECTED ON THE PERSON WHO IS DULY VESTED WITH THE AUTHORITY TO RECEIVE SUCH NOTICE. WHEN THE ASSESSEE TOOK THE PL EA THAT THERE WAS NO PROPER SERVICE ON HIM, THEN IT IS FOR THE RE VENUE TO PLACE THE RELEVANT MATERIAL TO ESTABLISH THAT THE NOTICE WAS PROPERLY SERVED. IN THAT CASE, THE REPORT OF THE INSPECTO R WAS UNDATED AND THE LADY ON WHOM THE NOTICE WAS SERVED COULD NOT BE IDENTIFIED BY THE INSPECTOR, HENCE THE TRIBUNAL HAS HELD THAT IN THE ABSENCE OF ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 19 - PROPER AND VALID SERVICE OF NOTICE ON THE ASSESSEE AS PER THE PROVISIONS OF SECTION 282 AND ORDER 5 RULE-18 OF C PC THE ASSESSMENT WAS ANNULLED. (C) IN THE CASE OF ANIL KUMAR GOYAL VS. ITO 116 TTJ 239 (LUCKNOW) THE QUESTION WAS THE VALIDITY OF NOTICE U /S.148 WHICH WAS SERVED ON A PERSON WORKING IN A PARTNERSHIP, HO WEVER, THAT PERSON HAD NO EXPRESS OR IMPLIED AUTHORITY TO RECEI VE NOTICE ON BEHALF OF THE ASSESSEE-FIRM. IN THE CITED DECISION THE SAID PERSON COULD NOT BE IDENTIFIED. IT WAS HELD THAT THE AO A SSUMES JURISDICTION TO COMPLETE THE ASSESSMENT ONLY AFTER SERVICE OF A LEGAL AND VALID NOTICE IN ACCORDANCE WITH LAW. IT WAS ALSO HELD THAT ACQUIESCENCE ON THE PART OF THE ASSESSEE COULD NOT CONFER JURISDICTION WHICH OTHERWISE FOUND TO BE LACKING FR OM THE VERY BEGINNING. IT WAS HELD THAT WHEN THE ASSESSEE HAD PLEADED THAT HE HAD NOT BEEN PROPERLY SERVED WITH ANY NOTICE, IT IS FOR THE DEPARTMENT TO PLACE RELEVANT MATERIAL THAT THE ASSE SSEE WAS SERVED WITH PROPER NOTICE. ON THAT BASIS, THE TRIBUNAL HAS QUASHED THE ASSESSMENT. (D) IN THE CASE OF HIND BOOK HOUSE VS. ITO 93 TTJ 224 (DELHI), IT WAS FOUND THAT SERVICE WAS ON AN UNAUTHORIZED PERSO N, THE NOTICE U/S.143(2) WAS STATED TO BE SERVED ON ONE A, BUT TH E SAID PERSON WAS NEITHER A PARTNER NOR AN AUTHORIZED REPRESENTAT IVE AND IT WAS FOUND THAT A WAS NOT EVEN AN EMPLOYEE OF THE FIRM. IT WAS HELD THAT NO VALID NOTICE WAS SERVED ON THE ASSESSEE U/S .143(2) WITHIN THE SPECIFIED TIME LIMIT THEREFORE THE ASSESSMENT C OMPLETED IN PURSUANCE OF AN INVALID NOTICE WAS VOID AB INITO. ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 20 - (E) IN THE CASE OF R.L. NARANG VS. CIT 136 ITR 108 (DEL.), IT WAS HELD THAT IN THE ABSENCE OF PROPER SERVICE OF NOTIC E THROUGH PROCESS SERVER AND IT WAS FOUND THAT SOME ONE HAS S IGNED ON THE IMPUGNED NOTICE AND THAT THERE WAS NOTHING ON RECOR D TO INDICATE THE IDENTITY OF THE SAID PERSON ON WHOM THE NOTICE WAS ALLEGED TO HAVE BEEN SERVED IT WAS HELD THAT THERE WAS NO PRES UMPTION TO TREAT THE SAID NOTICE AS VALID NOTICE. (F) IN THE CASE OF ACIT VS. ASHIANA AUTOMOBILES (P) LTD . 124 ITD 425 (ITAT PATNA BENCH), IT WAS NOTED THAT WHEN SERV ICE OF NOTICE IS CHALLENGED BY THE ASSESSEE, THEN EVIDENCE IN THE FORM OF ACKNOWLEDGEMENT, CERTIFICATE FROM THE COURIER AND T HE PROPER AUTHORIZATION SHOULD BE SHOWN TO THE ASSESSEE. IN ADDITION TO THE ACKNOWLEDGEMENT, THERE MUST BE SOMETHING ELSE ON RE CORD TO SHOW THAT THE PERSON ON WHOM THE NOTICE WAS CLAIMED TO HAVE BEEN SERVED, WAS IN FACT THE PERSON NAMED IN THE NO TICE. SINCE THERE WAS NO EVIDENCE OF SERVICE OF NOTICE ON THE A SSESSEE, IT WAS HELD THAT AO DID NOT GET JURISDICTION TO CONTINUE W ITH THE PROCEEDINGS U/S.147 OF THE I.T.ACT. (G) IN THE CASE OF ACIT VS. VISION INC. 130 TTJ 696 (DEL) [AUTHORED BY MY LD.COLLEAGUE], IT WAS NOTICED THAT THERE WAS ABSENCE OF VALID SERVICE OF NOTICE U/S.143(2) OF I.T. ACT. THERE WA S A REMAND REPORT THROUGH IT WAS INFORMED THAT THE SAID NOTICE WAS SERVED ON THE PERSON AVAILABLE AT THE ASSESSEES ADDRESS, HOW EVER PARTNER WAS OUT OF STATION, BUT THE NAME OF THE PERSON ON W HOM THE SAID NOTICE WAS CLAIMED TO HAVE BEEN SERVED WAS NOT AVAI LABLE. IT WAS THEREFORE FOUND THAT THE NOTICE WAS NOT SERVED ON A NY PARTNER OF ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 21 - THE ASSESSEE FIRM. ACCORDING TO THE TRIBUNAL, AT B EST, THE SAID NOTICE MIGHT HAVE BEEN SERVED ON AN EMPLOYEE OF THE FIRM. BUT IT WAS NOT THE CASE OF THE REVENUE THAT THE PERSON ON WHOM THE NOTICE WAS SERVED WAS AN AUTHORIZED PERSON TO ACCEP T THE NOTICE ON BEHALF OF THE ASSESSEE. AN ANOTHER OBSERVATION H AS ALSO BEEN MADE THAT SECTION 292BB WAS INSERTED WITH EFFECT FR OM 1/4/2008 AND NOT APPLICABLE FOR ASSESSMENT YEAR 2003-04. FU RTHER AN OBSERVATION HAS ALSO BEEN MADE THAT IN SPITE OF THE FACT THAT THE ASSESSEE HAD PARTICIPATED IN THE ASSESSMENT PROCEED INGS THE ASSESSMENT WAS INVALID AND FINALLY IT WAS QUASHED. 13. WITH THIS LEGAL AS ALSO FACTUAL BACKGROUND, WE HAVE PERUSED AN AFFIDAVIT OF THE ASSESSEE THROUGH WHICH HE HAS DEPO SED ON OATH THAT HE AND HIS WIFE WERE OUT OF INDIA DURING 29/7/2005 TO 7/3/ 2008. IT HAS ALSO BEEN AFFIRMED THAT HIS SON PRASHANT J.PATEL WAS ALSO OUT OF INDIA DURING 27/4/2007 TO 15/02/2008. IT HAS ALSO BEEN AFFIRMED THAT THE WIFE OF HIS SON WAS ALSO OUT OF INDIA FROM 7/4/2006 UPTILL 31/03/2009. IT W AS STATED THAT HIS SECOND SON IS A U.S. CITIZEN AND NOT IN INDIA SINCE 2007. SO IT WAS STATED THAT THEY HAVE NOT RECEIVED ANY NOTICE U/S.143(2) DURING THE CALENDAR YEAR 2007 SINCE THE FAMILY WAS NOT IN INDIA. COPIES OF PASSPORTS A ND OTHER RELEVANT DOCUMENT ARE ALSO ON RECORD. CONSIDERING THE TOT ALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ONCE THE ADMITTED FACTUA L POSITION IS THAT THE ASSESSEE AND HIS CLOSE FAMILY MEMBERS WERE OUT OF C OUNTRY AND THAT THE AUTHORIZED PERSON WAS ALSO OUT OF COUNTRY AND THAT ONE OF HIS SON STAYS IN USA, WE HAVE NO OPTION BUT TO HOLD THAT THE SERVICE OF NOTICE U/S.143(2) WAS NOT A PROPER SERVICE, SPECIALLY WHEN THE REVENUE HA S NOT ESTABLISHED THE ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 22 - NAME OF THE PERSON AND THE IDENTITY OF THE PERSON W HOSE ALLEGED SIGNATURE WERE FOUND IN THE IMPUGNED NOTICE. ALMOST ON IDENT ICAL GROUNDS, ONCE A VIEW HAS ALREADY BEEN TAKEN BY THE RESPECTED CO-ORD INATE I BENCH ITAT DELHI IN THE CASE OF VISION INC.(SUPRA) AND SEVERAL OTHER DECISIONS AS DISCUSSED HEREINABOVE, WE HEREBY TAKE A VIEW THAT I N THE ABSENCE OF VALID SERVICE OF NOTICE U/S.143(2) THE ASSESSMENT PROCEED INGS AS PER ORDER U/S.143(3) DATED 26.12.2008, THE IMPUGNED ASSESSMEN T ORDER CHALLENGED BEFORE US, WERE NOT VALID AND HEREBY QUASHED. AN A PPREHENSION HAS BEEN RAISED FROM THE SIDE OF THE REVENUE ABOUT THE TAX D EPOSITED BY THE ASSESSEE AS PER THE RETURN FILED AND IN THIS REGARD WE HAVE ALREADY TAKEN A COGNIZANCE OF THE FACT THAT THE SAID RETURN OF THE ASSESSEE WA S PROCESSED U/S.143(1) OF THE IT ACT, MEANING THEREBY THE SAID RETURN WAS PRO CESSED AND ASSESSED HAVING NO BEARING OF THE VIEW EXPRESSED IN THIS APP EAL. RESULTANTLY, GROUND NOS.1 & 2 ARE ALLOWED. REST OF THE GROUNDS ARE ON MERITS, THEREFORE AT PRESENT THERE IS NO NECESSITY TO DECIDE THOSE GROUN DS ONCE WE HAVE HELD THE IMPUGNED ASSESSMENT ORDER AS BAD IN LAW AND FOR THI S LEGAL PROPOSITION, WE PLACE RELIANCE ON RAHUL KUMAR BAJAJ 69 ITD 01 (SB). 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. SD/- SD/- ( A.K. GARODIA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD; DATED 13 / 01 /2012 6..), .)../ T.C. NAIR, SR. PS ITA NO.2936/AHD /2010 JAYANTILAL ATMARAM PATEL HUF VS. ASST.CIT ASST.YEAR - 2006-07 - 23 - '5 2 /7 8'7* '5 2 /7 8'7* '5 2 /7 8'7* '5 2 /7 8'7*/ COPY OF THE ORDER FORWARDED TO : 1. +. / THE APPELLANT 2. /0+. / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-XVI, AHMEDBAD 5. 7<# /) , , / DR, ITAT, AHMEDABAD 6. # =3 / GUARD FILE. '5) '5) '5) '5) / BY ORDER, 07 / //TRUE COPY// > >> >/ // / , , , , ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..27.12.11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27.12.11 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 13.1.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13.1.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER