Shri Jagdish C. Sachdev, Ahmedabad V. The Income tax Officer, Ward-10(2), Ahmedabad

ITA 308/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76752 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-05-2014
• Assessment Year: 1995-1996
• Appeal Filed On: 04-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Keywords: Period of limitation; Tangible material; Condonation of delay
• Section: 143(3); 234B; 147

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NOS.307 AND 308/AHD/2011 [ASSTT.YEAR : 1994-1995 AND 1995-1996] JAGDISH C. SACHDEV C/O. KETAN H. SHAH, ADVOCATE 903, SAPPHIRE COMPLEX C.G. ROAD, NAVRANGPURA AHMEDABAD. PAN : ALUPS 8870 P /VS. ITO, WARD-10(2) AHMEDABAD. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI KETAN SHAH + 2 3 )/ REVENUE BY : SHRI O.P. VAISHNAV, CIT-DR 5 2 &(*/ DATE OF HEARING : 5 TH MAY, 2014 678 2 &(*/ DATE OF PRONOUNCEMENT : 06-06-2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THESE TWO APPEALS BY THE ASSESSEE FOR THE ASSESSMENT YEARS 1994-1995 AND 199 5-1996 ARE DIRECTED AGAINST THE ORDERS OF THE CIT(A). THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. ITA NOS.307 AND 308/AHD/2011 -2- 2. THE CONCISE GROUNDS OF THE APPEAL OF THE ASSESSE E FOR THE ASSTT.YEAR 1994-95 ARE AS UNDER: THE FOLLOWING GROUNDS ARE WITHOUT PREJUDICE TO EAC H OTHER. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER/COMMISSIONER OF INCOME TAX (APPEA LS) ERRED 1. IN NOT CONDONING THE SO-CALLED DELAY OF FILING O F APPEAL. IT IS PRAYED THAT THE APPELLANT HAS FILED APPEAL IMMEDIAT ELY AFTER COMING INTO KNOWLEDGE THAT THE AFFIXTURE HAS BEEN MADE. FU RTHER, WITHOUT PREJUDICE, CIT(A) HIMSELF HAS DECIDED THE APPEAL ON MERITS AND AS SUCH HE OUGHT TO HAVE CONDONE THE DELAY. 2. IN ASSESSING THE INCOME AT RS.9,6 6,210/- AS AGAINST 'NIL' RETURNED INCOME. 3. IN NOT APPRECIATING THE FACT THAT THE SERVI CE OF THE NOTICE U/S.148 IS ITSELF BAD IN LAW, VOID AB-INITIO, ILLEG AL AND LIABLE TO BE QUASHED. 3A. IT IS PRAYED THAT EVEN NOTICE U/S.143(2) HAS NOT BEEN SERVED TO THE ASSESSEE AND/OR TO AUTHORIZED PERSON, AND AS SU CH, THE PROCEEDINGS U/S.143(2)/143(3)/148 IS ITSELF BAD IN LAW, VOID AB-INITIO AND LIABLE TO BE QUASHED. 4. IN NOT APPRECIATING THE FACT THAT AS PER THE REA SONS RECORDED, 148 NOTICE WAS IN REFERENCE TO THE AMOUNT OF RS.5,3 5,586/- AND NOT IN REFERENCE TO THE AMOUNT OF ADDITION MADE WORTH R S.9,29,945/- AND AS SUCH ADDITION TO THE EXTENT OF RS.9,29,945/- IS BAD IN LAW AND ILLEGAL. 5. IN NOT APPRECIATING THE FACT THAT EVEN OTHE RWISE THE ASSESSMENT FRAMED BEYOND 4 YEARS IS ITSELF BAD IN LAW, VOID AB -INITIO AND ILLEGAL THOUGH THE INTIMATION U/S.143(1)(A) DATED 07.02.199 5 HAS BEEN PASSED. THERE IS NO SUCH TANGIBLE MATERIAL ON RECOR D. 5A, IN NOT APPRECIATING THE FACT THAT THERE IS N O APPLICATION OF MIND EITHER BY ASSESSING OFFICER OR BY HIS CONCERNED APP ROPRIATE AUTHORITY U/S.151 BEFORE ISSUING ANY NOTICE U/S.148 AND/OR BEFORE GIVING ANY APPROVAL- IT IS PRAYED THAT EXPLANATION- 2 OF SECTION 148 ITA NOS.307 AND 308/AHD/2011 -3- IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THEREFORE, NOTICE U/S.148 QUA APPROVAL IS BADE IN L AW. 6. IN NOT APPRECIATING THE FACTS THAT THE REOP ENING CANNOT BE MADE MERELY ON THE BASIS OF INFORMATION RECEIVED IN SUBSEQUENT ASSESSMENT YEAR AND THAT IN OUR CASE THE REOPENING HAS BEEN MADE TAKING BASE OF ASST. YEAR 1998-99 IS ITSELF BAD IN LAW AND VOID AB- INITIO. 7. IN NOT APPRECIATING THE FACT THAT EVEN OTHE RWISE NO ADDITION CAN BE MADE TO THE EXTENT OF OPENING BALANCE CARRIE D FORWARD IN REFERENCE TO CASH CREDIT, 8. IN NOT APPRECIATING THE FACT THAT TO THE EX TENT OF CONFIRMATION AS WELL AS PAN FILED, THERE CANNOT BE ANY ADDITION TO THESE CREDITS. AGAIN THIS SHOWS NON-APPLICATION OF MIND. 9. IN NOT APPRECIATING THE FACT THAT THE REPAYMENT HAS BEEN MADE TO VARIOUS PARTIES AND THERE IS NO EVIDENCE THAT MO NEY CAME BACK TO THE ASSESSEE, THEREFORE, NO ADDITION CAN BE MADE. 10. IN NOT APPRECIATING THE FACT THAT THE ASSESS EE HAS DISCHARGED ITS ONUS BY PROVIDING COMPLETE DETAILS OF EVERY CREDITO RS LIKE ADDRESS, PAN NO., PAYMENT MADE THROUGH ACCOUNT PAYEE CHEQUES AND THEREFORE ADDITION OF RS.9,29,945/- IS REQUIRED TO BE DELETED. 11. IT IS FURTHER PRAYED THAT EVEN OTHERWISE THE AS SESSEE HAS ASKED THE ASSESSING OFFICER TO ISSUE SUMMONS U/S.L31 OF T HE ACT IN REFERENCE TO EACH AND EVERY CREDITORS AND SINCE THE LOWER AUTHORITY FAILED TO EXAMINE CREDITOR, NO ADDITION CAN BE MADE . 12. IT IS FURTHER PRAYED THAT BOTH THE LOWER AUT HORITIES HAVE TOTALLY ERRED IN GIVING ADVERSE REMARKS AGAINST THE ASSESSE E, MORE PARTICULARLY, THE ASSESSEE HAS ALREADY DISCHARGED T HE ONUS IN REFERENCE TO EACH AND EVERY CREDITORS AS DISCUSSED BY CIT(APPEALS) IN HIS APPEAL ORDER PAGE 56 TO 63. 13. IN NOT APPRECIATING THE FACT THAT THE APPROV AL GRANTED U/S.151 IS ITSELF BAD IN LAW AND ILLEGAL, MAINLY ON THE GRO UND THAT THE HIGHER AUTHORITY HAS GIVEN APPROVAL IN A VERY CURSORY MANN ER BY WRITING YES' IN APPROVAL MEMO. THEREFORE, IT IS PRAYED THA T THERE IS NO ITA NOS.307 AND 308/AHD/2011 -4- APPLICATION OF MIND AND AS SUCH, THE APPROVAL AS WE LL AS NOTICE U/S.148 IS BAD IN FEW. 14. THE LEARNED C.I.T-(APPEALS) HAS ERRED IN GIV ING SOME ADVERSE REMARKS AS PER THE APPELLATE ORDER PAGE 85 TO 103. IT IS PRAYED THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, HE OUGHT NOT TO HAVE PASSED SUCH REMARKS. 15. IN CHARGING INTEREST UNDER SEC.234A AND 234B O NLY IN THE DEMAND NOTICE AND FURTHER PRAYED THAT, ASSESSEE HAS NOT COMMITTED BY SUCH DEFAULT. THE CONCISE GROUNDS OF THE APPEAL OF THE ASSESSEE FOR THE ASSTT.YEAR 1995-96 ARE AS UNDER: THE FOLLOWING GROUNDS ARE WITHOUT PREJUDICE TO EAC H OTHER. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER/COMMISSIONER OF INCOME TAX (APPEA LS) ERRED 1. IN NOT CONDONING THE SO-CALLED DELAY OF FILING O F APPEAL. IT IS PRAYED THAT THE APPELLANT HAS FILED APPEAL IMMEDIAT ELY AFTER COMING INTO KNOWLEDGE THAT THE AFFIXTURE HAS BEEN MADE. FU RTHER, WITHOUT PREJUDICE, CIT(A) HIMSELF HAS DECIDED THE APPEAL ON MERITS AND AS SUCH HE OUGHT TO HAVE CONDONE THE DELAY. 2. IN ASSESSING THE INCOME AT RS.1,2 9,76,570/- AS AGAINST 'NIL' RETURNED INCOME. 2A. IN MAKING ADDITION U/S.68 ON ACCOUNT OF PROMOTE RS APPLICATION MONEY OF RS.28,38,000/- 3. IN NOT APPRECIATING THE FACT THAT THE SERVI CE OF THE NOTICE U/S.148 IS ITSELF BAD IN LAW, VOID AB-INITIO, ILLEG AL AND LIABLE TO BE QUASHED. 3A. IT IS PRAYED THAT EVEN NOTICE U/S.143(2) HAS NOT BEEN SERVED TO THE ASSESSEE AND/OR TO AUTHORIZED PERSON, AND AS SU CH, THE PROCEEDINGS U/S.143(2)/143(3)/148 IS ITSELF BAD IN LAW, VOID AB-INITIO AND LIABLE TO BE QUASHED. ITA NOS.307 AND 308/AHD/2011 -5- 4. IN NOT APPRECIATING THE FACT THAT AS PER THE REA SONS RECORDED, 148 NOTICE WAS IN REFERENCE TO THE AMOUNT OF RS.1,5 4,500/- AND NOT IN REFERENCE TO THE AMOUNT OF ADDITION MADE WORTH R S.1,30,90,237/- AND AS SUCH ADDITION TO THE EXTENT OF RS.1,30,90,23 7/- IS BAD IN LAW AND ILLEGAL. 5. IN NOT APPRECIATING THE FACT THAT EVEN OTHE RWISE THE ASSESSMENT FRAMED BEYOND 4 YEARS IS ITSELF BAD IN LAW, VOID AB -INITIO AND ILLEGAL THOUGH THE INTIMATION U/S.143(1)(A) DATED 05.09.199 6 HAS BEEN PASSED. THERE IS NO SUCH TANGIBLE MATERIAL ON RECOR D. 5A. IN NOT APPRECIATING THE FACT THAT THERE IS N O APPLICATION OF MIND EITHER BY ASSESSING OFFICER OR BY HIS CONCERNED APP ROPRIATE AUTHORITY U/S.151 BEFORE ISSUING ANY NOTICE U/S.148 AND/OR BEFORE GIVING ANY APPROVAL- IT IS PRAYED THAT EXPLANATION- 2 OF SECTION 148 IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THEREFORE, NOTICE U/S.148 QUA APPROVAL IS BADE IN L AW. 6. IN NOT APPRECIATING THE FACTS THAT THE REOP ENING CANNOT BE MADE MERELY ON THE BASIS OF INFORMATION RECEIVED IN SUBSEQUENT ASSESSMENT YEAR AND THAT IN OUR CASE THE REOPENING HAS BEEN MADE TAKING BASE OF ASST. YEAR 1998-99 IS ITSELF BAD IN LAW AND VOID AB- INITIO. 7. IN NOT APPRECIATING THE FACT THAT EVEN OTHE RWISE NO ADDITION CAN BE MADE TO THE EXTENT OF OPENING BALANCE CARRIE D FORWARD IN REFERENCE TO CASH CREDIT. 8. IN NOT APPRECIATING THE FACT THAT TO THE EX TENT OF CONFIRMATION AS WELL AS PAN FILED, THERE CANNOT BE ANY ADDITION TO THESE CREDITS. AGAIN THIS SHOWS NON-APPLICATION OF MIND. 9. IN NOT APPRECIATING THE FACT THAT THE REPAYMENT HAS BEEN MADE TO VARIOUS PARTIES AND THERE IS NO EVIDENCE THAT MO NEY CAME BACK TO THE ASSESSEE, THEREFORE, NO ADDITION CAN BE MADE. 10. IN NOT APPRECIATING THE FACT THAT THE ASSESS EE HAS DISCHARGED ITS ONUS BY PROVIDING COMPLETE DETAILS OF EVERY CREDITO RS LIKE ADDRESS, PAN NO., PAYMENT MADE THROUGH ACCOUNT PAYEE CHEQUES AND THEREFORE ADDITION OF RS.1,30,90,237/- IS REQUIRED TO BE DELETED. ITA NOS.307 AND 308/AHD/2011 -6- 11. IT IS FURTHER PRAYED THAT EVEN OTHERWISE THE AS SESSEE HAS ASKED THE ASSESSING OFFICER TO ISSUE SUMMONS U/S.L31 OF T HE ACT IN REFERENCE TO EACH AND EVERY CREDITORS AND SINCE THE LOWER AUTHORITY FAILED TO EXAMINE CREDITOR, NO ADDITION CAN BE MADE . 12. IT IS FURTHER PRAYED THAT BOTH THE LOWER AUT HORITIES HAVE TOTALLY ERRED IN GIVING ADVERSE REMARKS AGAINST THE ASSESSE E, MORE PARTICULARLY, THE ASSESSEE HAS ALREADY DISCHARGED T HE ONUS IN REFERENCE TO EACH AND EVERY CREDITORS AS DISCUSSED BY CIT(APPEALS) IN HIS APPEAL ORDER PAGE 56 TO 63. 13. IN NOT APPRECIATING THE FACT THAT THE APPROV AL GRANTED U/S.151 IS ITSELF BAD IN LAW AND ILLEGAL, MAINLY ON THE GRO UND THAT THE HIGHER AUTHORITY HAS GIVEN APPROVAL IN A VERY CURSORY MANN ER BY WRITING YES' IN APPROVAL MEMO. THEREFORE, IT IS PRAYED THA T THERE IS NO APPLICATION OF MIND AND AS SUCH, THE APPROVAL AS WE LL AS NOTICE U/S.148 IS BAD IN FEW. 14. THE LEARNED C.I.T-(APPEALS) HAS ERRED IN GIV ING SOME ADVERSE REMARKS AS PER THE APPELLATE ORDER PAGE 85 TO 103. IT IS PRAYED THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, HE OUGHT NOT TO HAVE PASSED SUCH REMARKS. 15. IN CHARGING INTEREST UNDER SEC.234A AND 234B O NLY IN THE DEMAND NOTICE AND FURTHER PRAYED THAT, ASSESSEE HAS NOT COMMITTED BY SUCH DEFAULT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THIS IS THIRD ROUND OF LITIGATION BEFORE THE TRIBUNAL. HE SUBMIT TED THAT THE CIT(A) IN THE IMPUGNED ORDER HAS REFUSED TO CONDONE THE DELAY IN FILING THE APPEAL BEFORE HIM AND HAS DISMISSED THE APPEAL ON THIS GRO UND. FURTHER, THE LEARNED CIT(A) HAS DECIDED THE MATTER ON ITS MERITS AND HAS DISMISSED BOTH THE APPEALS OF THE ASSESSEE ON MERITS ALSO. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THERE WAS IN FACT NO DELAY IN FILING THE APPEAL BEFORE THE CIT(A) AGA INST THE ASSESSMENT ORDERS IN THIS CASE. HE SUBMITTED THAT THE ASSESSE E LIVES IN UK SINCE LAST SO MANY YEARS AND THE ASSESSMENT ORDERS ARE DATED 26.1 2.2008. THE AO HAS ITA NOS.307 AND 308/AHD/2011 -7- SERVED THE ASSESSMENT ORDER PER AFFIXTURE ON 2.1.20 09. HE SUBMITTED THAT THE ASSESSEE COULD NOT GET THE ASSESSMENT ORDERS PE R AFFIXTURE, AND THEREFORE, THE DATE OF SERVICE SHOULD BE TAKEN AS 1 0.12.2009 ON WHICH THE COPIES OF THE ORDERS WERE SERVED ON THE ASSESSEE. HE SUBMITTED THAT THE APPEALS WERE FILED BEFORE THE CIT(A) ON 18.2.2010. HE SUBMITTED THAT ON DATE OF AFFIXTURE OF THE ASSESSMENT ORDERS ON 2.1.2 009, THE ASSESSEE WAS IN UK, AND THEREFORE, WAS NOT AWARE OF THE ASSESSMENT ORDERS. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THESE F ACTS WERE SUBMITTED BEFORE THE CIT(A), BUT THE CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE AS TIME BARRED. THE LEARNED DR HAS SUPPORTED THE A CTION OF THE CIT(A) IN NOT CONDONING THE DELAY IN FILING THE APPEALS BEFOR E HIM AND DISCUSSED IN DETAIL THE NON-COOPERATIVE ATTITUDE OF THE ASSESSEE , AS RECORDED BY THE AO AS WELL AS BY THE CIT(A) IN THEIR RESPECTIVE ORDERS . 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS REGARDING T HE ISSUE OF CONDONATION OF DELAY IN FILING THE APPEALS BEFORE T HE FIRST APPELLATE AUTHORITY I.E. THE CIT(A) BY THE ASSESSEE. WE FIND THAT THE ORDER OF THE ASSESSMENT FOR BOTH THE ASSTT.YEARS 1994-95 AND 199 5-1996 WERE PASSED ON 26.12.2008 UNDER SECTION 143(3) R.W.S. 250 OF TH E ACT. THE APPEALS IN THESE TWO CASES WERE FILED BEFORE THE CIT(A) ON 18. 2.2010, WHICH IS CLEARLY BARRED BY LIMITATION. WE FIND THAT THE CIT (A) HAS RECORDED IN HIS APPELLATE ORDER THAT THE ASSESSEE HAS NEITHER FILED ANY APPLICATION FOR CONDONATION OF DELAY, NOR HAS MADE ANY GROUND OF AP PEAL REGARDING THE CONDONATION OF DELAY. THE ASSESSEE HAS NOT GIVEN A NY REASON AS TO WHY THE APPEALS WERE FILED LATE AND HENCE, THE APPEALS WERE LIABLE TO BE DISMISSED, AS TIME BARRED. REGARDING THE CLAIM OF THE ASSESSE E THAT THE ASSESSMENT ORDERS WERE RECEIVED ONLY ON 10.12.2009, THE CIT(A) ASKED FOR A REPORT FROM THE AO REGARDING SERVICE OF NOTICES. THE AO I N FACT, VIDE HIS LETTER DATED 20.12.2010 INFORMED THAT FOR ASSTT.YEAR 1994- 95, THE ORDER WAS ITA NOS.307 AND 308/AHD/2011 -8- DISPATCHED BY SPEED POST ON 31.12.2008, BUT WAS REC EIVED BACK FROM THE POSTAL AUTHORITIES. THEREAFTER, THE ORDER FOR BOTH THE ASSTT.YEARS 1994-95 AND 1995-1996 WERE SERVED BY AFFIXTURE ON 2.1.2009. THE CIT(A) HAS RECORDED THAT THE AO HAS ENCLOSED COPIES OF PANCHNAMA REGARDING SERVICE OF THE ASSESSMENT ORDERS FOR BOTH THE ASSTT.YEARS 1 994-95 AND 1995-1996 BY AFFIXTURE. THE PANCHNAMA IS DATED 2.1.2009, AND HENCE, THE CLAIM OF THE ASSESSEE THAT THE ASSESSMENT ORDERS WERE SERVED BY AFFIXTURE ON 9.11.2009 WAS HELD AS PATENTLY WRONG BY THE CIT(A). THE CIT(A) HAS FURTHER RECORDED THAT THE ASSESSEE HAS NOT GIVEN AN Y REASON AS TO WHY THE DELAY WAS OCCURRED FOR MORE THAN ONE YEAR AND THAT IN FACT THE ASSESSEE HAS MADE A WRONG STATEMENT THAT THE ORDERS WERE AFFIXED IN NOVEMBER 2009 AND NOT IN JANUARY, 2009. THE CIT(A) HAS FURTHER R ECORDED IN THE IMPUGNED ORDER THAT THE ASSESSEE HAS GOT THE ORDERS SET ASIDE FROM THE ITAT WITH THE PROMISE THAT HE WOULD COOPERATE IN TH E ASSESSMENT PROCEEDINGS AND INSTEAD OF COOPERATING BY FILING DE TAILS, THE ASSESSEE HAS NOT EVEN ATTENDED AND NOT EVEN RECEIVED ORDERS. IN THESE FACTS, THE APPEALS WERE DISMISSED AS TIME BARRED BY THE CIT(A). WE FI ND THAT EVEN BEFORE US NO REASON FOR THE DELAY IN FILING THE APPEAL BEFORE THE CIT(A) BY MORE THAN ONE YEAR COULD BE GIVEN ON BEHALF OF THE ASSESSEE. WE FIND THAT THERE IS NO REASON TO DISBELIEVE THE PANCHNAMA DATED 2.1.2009 IN SUPPORT OF THE CLAIM OF THE DEPARTMENT THAT THE BOTH THE ASSESSMENT ORDE RS WERE SERVED BY AFFIXTURE ON 2.1.2009, AFTER THE ASSESSMENT ORDERS WERE DISPATCHED BY SPEED POST ON 31.12.2008, AND WERE RECEIVED BACK BY THE DEPARTMENT FROM THE POSTAL AUTHORITIES. IN THESE FACTS OF THE CASE , WE HOLD THAT THE CIT(A) HAS VALIDLY DISMISSED THE APPEALS BEFORE HIM AS BAR RED BY LIMITATION. WE HOLD ACCORDINGLY. 6. FURTHER, WE FIND THAT THE CIT(A) HAS RECORDED IN HIS APPELLATE ORDER THAT THIS BEING THIRD ROUND OF APPEAL, AS THE ITAT HAS SET ASIDE THE APPEALS ITA NOS.307 AND 308/AHD/2011 -9- ON TWO EARLIER OCCASIONS, AND THEREFORE, THE APPEAL S WERE CONSIDERED ON MERITS ALSO BY THE CIT(A) AND THE CIT(A) HAS RECORD ED THAT HE DID NOT WANT THAT THE MATTER TO BE SENT BACK AGAIN, AS ALRE ADY IT IS THIRD ROUND OF LITIGATION AND EVEN IN THE THIRD ROUND, THE ASSESSE E HAS NOT COOPERATED BEFORE THE AO ALTHOUGH THE ASSESSEE HAD GOT THE MAT TERS SET ASIDE BEFORE THE ITAT WITH THE PROMISE THAT HE WOULD BE COOPERAT ING IN THE FINALIZATION OF ASSESSMENT PROCEEDINGS. IN THIS BACKGROUND, WE ARE OF THE VIEW THAT SINCE THE MATTERS PERTAINS TO VERY OLD ASSTT.YEARS 1994-95 AND 1995-1996 AND THIS BEING THE THIRD ROUND OF LITIGATION BEFORE THE TRIBUNAL, IT WOULD BE EXPEDIENT TO DISPOSE OF THE ISSUES RAISED BY THE AS SESSEE ON ITS MERITS ALSO, ALTHOUGH THE PRESENT APPEALS WERE RIGHTLY DISMISSED BY THE CIT(A), AS TIME BARRED. 7. THE FIRST ISSUE RAISED BY THE ASSESSEE ON MERITS OF THE CASE IS LEGAL IN NATURE FOR BOTH ASSESSMENT YEARS TO THE EFFECT THAT THE INITIATION OF RE- ASSESSMENT PROCEEDINGS UNDER SECTION 147 BY ISSUING NOTICES UNDER SECTION 148 OF THE ACT AND THE SERVICE OF THE NOTICES ITSEL F WERE BAD IN LAW. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THI S BEING LEGAL IN NATURE, COULD VALIDLY BE TAKEN AT THE STAGE OF THE TRIBUNAL , ALTHOUGH, THIS ISSUE WAS RAISED BY THE ASSESSEE AT THE STAGE OF THE AO AND T HE CIT(A) ALSO. MOREOVER, THE AO HAS MADE ADDITIONS ON THE ISSUES W HICH WERE NOT RECORDED IN THE REASON RECORDED WHILE INITIATING TH E ACTION UNDER SECTION 147 OF THE ACT, AND THEREFORE, WAS BAD IN LAW. HE SUBMITTED THAT NO NOTICE UNDER SECTION 148 WAS SERVED ON THE ASSESSEE AND TH E NOTICE SERVED ON SON OF THE ASSESSEE WAS NOT LEGAL. HE SUBMITTED THAT T HE APPROVAL GRANTED BY THE HIGHER AUTHORITIES TO THE ISSUE OF NOTICE UNDER SECTION 147 WAS MECHANICAL AND WITHOUT APPLICATION OF MIND. HE RE LIED ON THE FOLLOWING SERIES OF DECISIONS IN SUPPORT OF HIS ARGUMENTS: ITA NOS.307 AND 308/AHD/2011 -10- I) CENTRAL INDIA ELECTRIC SUPPLY CO. LTD. VS. ITO, (20 11) 51 DTR (DEL) 51; II) GERMAN REMEDIES LTD. VS. DCIT, 287 ITR 494 (BOM); III) CHHUGAMAL RAJPAL VS. S.P. CHALIHA & ORS., (1971) 79 ITR 603(SC); IV) SILVER MINES VS. ITO, (2007) 110 TTJ (JP) 118; V) JAY BHARAT MARUTI LTD. VS. CIT, (2010) 324 ITR 289 (DEL); VI) CHHUGAMAL RAJPAL V. S.P. CHALIHA, 79 ITR 603 (SC) VII) CENTRAL INDIA ELECTRIC SUPPLY CO. LTD. V. INCOME-TA X OFFICER, COMPANY CIRCLE-X, NEW DELHI, 333 ITR 237 (DELHI) VIII) GERMAN REMEDIES LTD. V. DEPUTY COMMISSIONER OF INCOME- TAX, 287 ITR 494 (BOM), IX) UNITED ELECTRICAL CO. (P.) LTD. V. COMMISSIONER OF INCOME- TAX, 258 ITR 317 (DELHI), X) COMMISSIONER OF INCOME-TAX, DELHI X V. ATUL JAIN, 2 12 CTR 42 (DELHI) 8. THE LEARNED DR HAS OPPOSED THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THE CIT(A) HAS PASSED A WELL REASONED ORDER WHILE HOLDING THAT THE ACTION UNDER SECTION 1 47 WAS RIGHTLY TAKEN IN THIS CASE. HE RELIED ON THE ORDERS OF THE AO AND T HE CIT(A) AND ALSO SERIES OF DECISIONS OF THE HONBLE COURTS IN SUPPORT OF TH E CASE OF THE DEPARTMENT. 9. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT ON THE LEGA L ISSUES OF VALIDITY OF REOPENING OF THE ASSESSMENT PROCEEDINGS UNDER SECTI ON 147, THE CIT(A) HAS PASSED A WELL REASONED SPEAKING ORDER ON THIS I SSUE. IN THIS CASE, THE ASSESSMENTS FOR ASSTT.YEARS 1994-95 AND 1995-1996 W ERE REOPENED UNDER SECTION 147 WITH PRIOR APPROVAL OF THE JCIT AND THE NOTICE UNDER SECTION 148 WAS SERVED ON THE SON OF ASSESSEE, SHRI DEVANG SACHDEV. IN REPLY TO NOTICE UNDER SECTION 148, A LETTER DATED 31.5.2001 WAS FILED BY THE AUTHORIZED REPRESENTATIVE REQUESTING TO TREAT THE R ETURN OF INCOME FILED ON 31.12.1994 AS RETURN FILED IN RESPONSE TO NOTICE UN DER SECTION 148. ITA NOS.307 AND 308/AHD/2011 -11- THEREAFTER, THE NOTICES WERE ISSUED BY THE AO UNDER SECTION 143(2) ON MANY OCCASIONS, BUT NOBODY ATTENDED ON BEHALF OF TH E ASSESSEE. SINCE THE ASSESSMENTS WERE GETTING BARRED BY LIMITATION, AND THE ASSESSEE WAS TOTALLY NON-COOPERATIVE WITH THE DEPARTMENT, THE AO PROCEED ED TO FRAME THE ASSESSMENTS IN ACCORDANCE WITH THE PROVISIONS OF TH E ACT. WE FIND THAT EVEN DURING THE COURSE OF APPELLATE PROCEEDING BEFO RE THE CIT(A), THE ASSESSEE DID NOT FILE ANY EVIDENCE OR DETAILS IN SU PPORT OF ITS CASE. WE HAVE GONE THROUGH THE COPIES OF REASONS RECORDED BY THE AO WHILE ISSUING NOTICE UNDER SECTION 148 AND FIND THAT DURING THE C OURSE OF FINALIZATION OF ASSESSMENT PROCEEDINGS FOR THE ASSTT.YEAR 1998-99, IT CAME TO THE LIGHT THAT THE ASSESSEE HAS FIRST OBTAINED LOAN DURING TH E ASSTT.YEARS 1994-95 AND 1995-1996 AND HAS NOT FILED ANY CONFIRMATION OR DETAILS OF THESE LOANS. ON THIS BASIS, THE ASSESSMENT FOR THE RELEVANT ASST T.YEARS 1994-95 AND 1995-1996 WERE SOUGHT TO BE REOPENED BY THE DEPARTM ENT. THE HIGHER AUTHORITIES HAVE GIVEN APPROVAL TO THE REQUEST OF T HE AO FOR GRANT OF PERMISSION TO REOPEN THE ASSESSMENT FOR ASSTT.YEARS 1994-95 AND 1995- 1996 ON THE BASIS OF THE REASONS RECORDED BY THE AO WHILE ISSUING NOTICE UNDER SECTION 148 OF THE ACT, AND SINCE THE LOANS W ERE FIRST RAISED DURING THESE RELEVANT ASSTT.YEARS 1994-95 AND 1995-1996 AN D THE ASSESSEE HAS FILED NO CONFIRMATION, WE HOLD THAT THERE IS NO ILL EGALITY IN REOPENING OF THE ASSESSMENTS BY ISSUING OF NOTICE UNDER SECTION 148 OF THE ACT FOR BOTH THE RELEVANT ASSESSMENT YEARS. THE NOTICES WERE SERVED ON THE SON OF THE ASSESSEE, AS THE ASSESSEE WAS STATED TO BE IN UK DU RING THE RELEVANT TIME AND THAT THE ASSESSEE HAS COMPLIED WITH BY FILING R ETURN OF INCOME IN RESPONSE THEREOF. THE CIT(A) HAS RECORDED THAT SHR I R.R. TIBREWALA, CHARTERED ACCOUNTANT, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, AFTER THE SERVICE OF NOTICES UNDER SECTION 148 ON THE SON OF THE ASSESSEE, HAS FILED A LETTER DATED 31.5.2001 REQUESTING TO TREAT THE EARLIER RETURN FILED ITA NOS.307 AND 308/AHD/2011 -12- ALREADY AS RETURN FILED IN RESPONSE TO NOTICE U/S.1 48 OF THE ACT. HOWEVER, THEREAFTER, THE ASSESSEE TURNED TOTALLY NON-OPERATI VE AND DID NOT ATTEND THE PROCEEDINGS EVEN AFTER THE SERVICE OF NOTICE OF THE SAME. WE FIND THAT THE ASSESSEE HAS FILED AFFIDAVIT DURING THE PREVIOUS RO UND OF LITIGATION BEFORE THE TRIBUNAL UNDERTAKING THAT THE ASSESSEE SHALL CO OPERATE WITH THE DEPARTMENT IN THE MATTER OF FINALIZATION OF ITS ASS ESSMENT, AND THE TRIBUNAL IN EARLIER OCCASIONS ON THE BASIS OF THE ASSURANCE GIVEN IN THE FORM OF AFFIDAVIT OF THE ASSESSEE, RESTORED THE MATTER TO T HE AO AND GAVE FRESH OPPORTUNITY TO THE ASSESSEE TO PROVE ITS CASE IN TH E INTEREST OF JUSTICE. WE FIND THAT THE TRIBUNAL IN THE SECOND ROUND OF LITIG ATION BEFORE IT VIDE ITS ORDER DATED 10.12.2004 WHILE DISPOSING OF THE ITA N OS.2418 & 2419/AHD/2004 HAS RECORDED AS UNDER: 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM THE RECORD THAT DUE TO THE ABSENCE OF THE ASSESSEE FROM INDIA, THE CREDITORS DID NOT COOPERATE IN FURNISHING THE DETAI LED INFORMATION AND DOCUMENTARY EVIDENCES CALLED BY THE LOWER AUTHO RITIES. NOW BY FURNISHING THE AFFIDAVIT DATED 8.11.2004, THE ASSES SEE HAS SOLEMNLY AFFIRMED DULY WITNESSED BY THE SOLICITOR OF LONDON, AND ASSURED THAT DURING FRESH PERIOD OF LIMITATION, HE WILL COME TO INDIA AND WILL BE ABLE TO SUBMIT VARIOUS DETAILS BEFORE THE AO. 4. IN VIEW OF THE ABOVE AND IN THE INTEREST OF JUST ICE AND FAIR PLAY, WE RESTORE THE MATTER TO THE FILE OF AO FOR DECIDIN G THE ISSUE AFRESH. THE ASSESSEE IS ALSO DIRECTED TO CONTACT THE AO WIT HIN REASONABLE TIME FROM THE DATE OF RECEIPT OF NOTICE FROM THE CO NCERNED AO AND TO COOPERATE THE AO IN ALL RESPECTS FOR COMPLETING HIS ASSESSMENT. WE DIRECT ACCORDINGLY. 10. WE FIND THAT THE ASSESSEE NOT ONLY HAS VIOLATED ITS OWN AFFIDAVIT DATED 8.11.2004 FILED BEFORE THE TRIBUNAL, BUT ALSO HAS VIOLATED THE DIRECTION OF THE TRIBUNAL TO CONTACT THE AO WITHIN REASONABLE TIME FROM THE DATE OF RECEIPT OF THE NOTICE FROM THE CONCERNE D AO AND TO COOPERATE WITH HIM IN ALL RESPECTS FOR COMPLETING ITS ASSESSM ENT. THE AO ISSUED ITA NOS.307 AND 308/AHD/2011 -13- LETTER DATED 3.8.2005 REQUESTING THE ASSESSEE TO AT TEND OFFICE ON 29.8.2005 AND ASKED FOR CERTAIN INFORMATION, BUT THERE WAS NO RESPONSE TO THE SAID NOTICE. ANOTHER NOTICE WAS ISSUED ON 22.8.2005 ADD RESSED TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE TO COOPER ATE IN THE SET ASIDE ASSESSMENT PROCEEDINGS AND ALSO TO FURNISH WHEREABO UTS OF THE ASSESSEE. THE CIT(A) HAS RECORDED THAT THERE WAS NO RESPONSE FOR THIS LETTER TOO. WE FIND THAT THE REASONS RECORDED BY THE AO WHILE REOP ENING THE ASSESSMENT PROCEEDINGS UNDER SECTION 147 WERE COMMUNICATED TO THE ASSESSEE AND THE ASSESSEE COULD NOT FILE ANY OBJECTION TO THE SAME. IN THESE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WE HAVE NO HESITATIO N IN HOLDING THAT THE ASSESSEE WAS, FROM THE VERY BEGINNING, AWARE OF ALL THE DEVELOPMENTS IN THIS CASE, INCLUDING THAT OF SERVICE OF NOTICE ETC. ON HIS SON AND BY AFFIXTURE AT HIS LAST KNOWN ADDRESS AND HIS AUTHORIZED REPRES ENTATIVE, BUT STILL NEVER CARED TO COMPLY WITH THEM AT ANY POINT OF TIME AND WAS TOTALLY NON- OPERATIVE WITH THE DEPARTMENT AND HAS VIOLATED HIS OWN DULY SWORN AFFIDAVITS, AND ALSO THE SPECIFIC DIRECTION OF THE TRIBUNAL WHILE SETTING ASIDE THE ASSESSMENT PROCEEDINGS TO THE FILE OF THE AO. THE DEPARTMENT HAS SERVED THE NOTICE BY AFFIXTURE AT THE LAST KNOW N ADDRESS OF THE ASSESSEE AND COPY OF THE PANCHNAMA WAS FILED BEFORE THE CIT(A) BY THE AO. THERE IS NO MATERIAL BEFORE US TO DOUBT THE GENUINENESS O F THE SAID PANCHNAMA REGARDING SERVICE OF NOTICES. IN THESE FACTS OF TH E CASE, WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) ON THE ISS UE THAT THE GROUNDS OF THE APPEAL ARE MEANINGLESS AND DISMISSED AS RAISED WITHOUT ANY BASIS, AND THE NOTICES WERE VALIDLY SERVED AS STATED BY THE AO IN THE REMAND REPORT AND THE ORDERS HAVE ALSO BEEN SERVED AS DETAILED IN THE ORDERS OF THE CIT(A), AND ACCORDINGLY, THE ISSUE IS DECIDED AGAIN ST THE ASSESSEE. 11. WE FURTHER HOLD THAT THE ISSUE THAT THE ASSESSM ENT FRAMED UNDER SECTION 147 SHOULD NOT GO BEYOND THE REASONS RECORD ED, HAS TO BE DECIDED ITA NOS.307 AND 308/AHD/2011 -14- AGAINST THE ASSESSEE, AS IT IS WELL SETTLED THAT ON CE THE ASSESSMENT IS VALIDLY REOPENED, IT IS OPEN TO THE AO TO GO INTO THE ENTIR E ASSESSMENT. WE FIND THAT THE CIT(A) HAS RECORDED A NUMBER OF DECISIONS OF THE HONBLE COURTS ON THIS ISSUE WHILE HOLDING THAT THE ORDER OF THE A SSESSMENTS IN THIS CASE WERE VALIDLY FRAMED. THERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE, WE CONFIRM THE ORDER OF THE CIT(A) A ND THIS ISSUE IS ALSO DECIDED AGAINST THE ASSESSEE. 12. THIS LEAVES US TO THE ONLY ISSUE ON THE MERITS OF THE ADDITIONS MADE BY THE AO FOR BOTH ASSTT.YEARS 1994-95 AND 1995-199 6. WE FIND THAT THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT HE HAS NOT PREPARED ON THE MERITS OF THE ADDITIONS MADE BY THE AO AND CONFIRMED BY THE CIT(A). IN REPLY TO THE QUERY FROM THE BENCH T HAT WHY HE WAS NOT SUBMITTING ANY ARGUMENTS ON THE MERITS OF THE CASE OR WHY HE HAS NOT PREPARED, THE LEARNED COUNSEL FOR THE ASSESSEE COUL D NOT GIVE ANY REASONS WHATSOEVER. WE FIND THAT IT IS THIRD ROUND OF LITI GATION BEFORE THE TRIBUNAL, AND SINCE NO REASON COULD BE SUBMITTED ON BEHALF OF THE ASSESSEE, FOR NOT ADDRESSING ANY ARGUMENTS ON MERITS OF THE CASE, WE ARE OF THE VIEW THAT THERE SHOULD BE AN END TO THE LITIGATION IN THIS CA SE. WE FIND THAT IT IS NOT A CASE WHERE THE ASSESSEE WAS NOT GIVEN OPPORTUNITY T O PROVE THE SOURCE OF CREDIT ENTRIES BY THE AO AND THE CIT(A). THE ASSES SEE HAS NOT EVEN FILED CONFIRMATION LETTERS FROM MOST OF THE CREDITORS. I N THE MATTER OF CREDIT ENTRIES, IT WELL SETTLED THAT THE ONUS IS ON THE AS SESSEE TO PROVE THE IDENTITY AND CREDIT-WORTHINESS OF THE CREDITORS AND ALSO GEN UINENESS OF THE TRANSACTIONS. IN THIS CASE, THE ASSESSEE HAS MISER ABLY FAILED TO DISCHARGE ITS ONUS CAST ON IT UNDER THE STATUTE AND COULD NOT EST ABLISH THE IDENTITY AND CREDIT WORTHINESS OF CREDITORS AND GENUINENESS OF T HE TRANSACTION, IN SPITE OF AMBLE OPPORTUNITY GIVEN BY THE AO AND THE CIT(A) IN THIRD ROUND OF LITIGATION. WE FIND THAT ON MERITS OF THE CASE THE CIT(A) HAS PASSED A WELL ITA NOS.307 AND 308/AHD/2011 -15- REASONED SPEAKING ORDER ON THE MERITS OF THE CASE, AND THE ASSESSEE COULD NOT CONTROVERT EVEN A SINGLE LINE THEREOF. WE FIND THAT FROM PARA 6.6.1 OF THE IMPUGNED ORDER, THE CIT(A) HAS CONSIDERED EACH AND EVERY CREDIT ENTRY AND THE FACTS OF THE CASE FOR BOTH ASSTT.YEARS 1994 -95 AND 1995-1996 FROM PAGE NO.79 TO 103 OF THE APPELLATE ORDER, AND SINCE THE ASSESSEE COULD NOT CONTROVERT A SINGLE LINE RECORDED BY THE CIT(A) ON THE MERITS OF THE CASE, WE ARE OF THE VIEW THAT NO INTERFERENCE IN THE ORDE R OF THE CIT(A) ON THIS ISSUE IS CALLED FOR, AND ACCORDINGLY, THE ORDER OF THE CIT(A) CONFIRMING THE ADDITIONS ON ITS MERITS IS CONFIRMED FOR BOTH THE A SSTT.YEARS 1994-95 AND 1995-1996 AND ALL THE GROUNDS OF THE APPEAL OF THE ASSESSSEE ARE DISMISSED FOR THE BOTH RELEVANT ASSESSMENT YEARS 1994-95 AND 1995-96. 13. BEFORE PARTING WITH THESE APPEALS, WE WANT TO B RING ON RECORD THAT THE ASSESSEE HAS NOT COOPERATED IN THE MATTER OF FI NALIZATION OF ITS ASSESSMENT OR BEFORE THE APPELLATE PROCEEDINGS ALSO . THE ASSESSEE IS IN THIRD ROUND OF LITIGATION BEFORE THE TRIBUNAL, AND STILL IS UNABLE TO ARGUE ON MERITS OF THE ADDITIONS BEFORE THE TRIBUNAL. THE A SSESSEE HAS FILED DULY SWORN AFFIDAVIT BEFORE THE TRIBUNAL IN THE SECOND R OUND OF LITIGATION AND THE ITAT VIDE ITS ORDER DATED 10.12.2004 WHILE DISP OSING OF THE APPEAL IN ITA NOS.2418 AND 2419/AHD/2004 FOR THE RELEVANT ASS ESSMENT YEARS (IN SECOND ROUND) HAS SPECIFICALLY NOTED THE AFFIDAVIT OF THE ASSESSEE DATED 8.11.2004 WHEREIN HE HAS SOLEMNLY AFFIRMED AND DULY WITNESSED BY THE SOLICITOR OF LONDON AND ASSURED THAT DURING FRESH P ERIOD OF LIMITATION, HE WILL COME TO INDIA AND WILL BE ABLE TO SUBMIT VARIO US DETAILS BEFORE THE AO. WE FIND THAT THE TRIBUNAL RESTORED THIS ISSUE TO THE FILE OF THE AO WITH DIRECTION TO THE ASSESSEE TO CONTACT THE AO WI THIN REASONABLE TIME FROM RECEIPT OF NOTICE FROM THE CONCERNED AO AND CO OPERATE WITH THE AO IN ALL RESPECTS FOR COMPLETING ASSESSMENT. THE ASS ESSEE NOT ONLY HAS FLOUTED ITS OWN CONTENTS OF SWORN AFFIDAVIT, BUT AL SO VIOLATED THE DIRECTIONS ITA NOS.307 AND 308/AHD/2011 -16- OF THE TRIBUNAL IN THIS MATTER. THE ASSESSEE HAS M ISUSED THE PROCESS OF LAW AND IT IS A FIT CASE FOR IMPOSITION OF COST ON TH E ASSESSEE, BUT WE ARE RESTRAINING OURSELVES FROM DOING SO. 14. IN THE RESULT, APPEALS OF THE ASSESSEE FOR BOTH THE ASSTT.YEARS 1994- 95 AND 1995-1996 ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD