SHRI JASHANDEEP SINGH SIDHU, BATHINDA V. INCOME TAX OFFICER WARD-1(3), BATHINDA

ITA 310/ASR/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5341 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 02-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GHANSHAM SHARMA
• Keywords: Reopening of assessment; Principle of natural justice
• Section: 68; 148; 144; 142(1)

Judgement Text

Jasandeep Singh Sidhu, Bathinda Asstt Year 2010-11 ITA No. 310/ASR/2019 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.310/Asr/2019 Assessment Year: 2010-11 Sh. Jashandeep Singh Sidhu, Patti Janike, VPO Bhai Rupa, Bathinda. [PAN:- CBPPS9297F] (Appellant) Vs. Income Tax Officer, Ward 1(3), Bathinda. (Respondent) Appellant by Sh. P.N. Arora, Adv. Respondent by Sh.Ghansham Sharma, Sr. DR. Date of Hearing 15.09.2022 Date of Pronouncement 20.09.2022 ORDER Per Anikesh Banerjee, JM: The instant appeal is directed against the order of Ld. Commissioner of Income Tax (Appeal) Bathinda, {in brevity CIT(A)} bearing appeal no. 231- IT/BTI/2017-18 date of order 13.02.2019, order passed u/s. 250(6) of the Income Tax Act, 1961 (in brevity of the Act) for the Assessment year 2010-11. The impugned order was originated from the order of Income Tax Officer, Ward- 1(3), Bathinda (in brevity A.O) order passed u/s.143(3) of the Act date of order 27.12.2017. Jasandeep Singh Sidhu, Bathinda Asstt Year 2010-11 ITA No. 310/ASR/2019 2. The assessee has taken following grounds, which are re-produced as below: 1. The ld. CIT(A) erred on facts and law by upholding the validity of service of notice was neither received by the assessee (as he was living in Canada during the said period) nor by any person duly authorized by him. 2. The ld. CIT(A) erred on facts and law in confirmation the action of the AO regarding initiated of proceedings u/s.147 of the Act for verification of source of cash deposits in the saving bank account of the assessee which is not permissible under the law. 3. The proceedings u/s. 147/148 are void ab initio because the Pr.CIT did not record the satisfaction, as prescribed u/s.151 of the Income Tax, 1961 that the case of the assessee was fit for issue of notice u/s.148 on the reasons recorded by the AO. 4. The ld. CIT(A) erred on facts and law in confirming the action of the AO regarding initiation of proceedings u/s. 147/148 of the IT Act, 1961being founded on the reasons which are solely based on information of cash deposit in the bank account of the assessee which cannot confer valid jurisdiction u/s.148 of the Act to initiate the reopening proceedings and accordingly notice issued u/s.148 and all subsequent proceedings including orders of ld. AO and ld. CIT-A are void ab initio. 5. The ld. CIT(A) erred on facts and law in upholding the action of the AO regarding re-opening the present case because mere AIR information cannot be treated as giving rise to valid and adequate ‘reasons to believe’ that income has escaped assessment within the meaning of section 148 of the Act. Accordingly notice issued u/s. 148 and all subsequent proceedings including order of ld. AO and ld. CIT(A) are void ab initio. 6. That the ld. CIT(A) seriously erred on facts and law in confirming the arbitrary and unlawful income determined at Rs.15,17,500/- by the AO without appreciating that source of cash deposits was not only fully Jasandeep Singh Sidhu, Bathinda Asstt Year 2010-11 ITA No. 310/ASR/2019 explained with supporting evidence but also admitted by the close relatives of the assessee in their statements before the AO for financially helping the assessee, who wanted to leave India and settle in Canada. 7. That the ld. CIT(A) seriously erred on facts and law in confirming the arbitrary and unlawful ex-parte assessment at a total income of Rs.15,17,500/- without appreciating that section 68 of the Act cannot apply to bank statement etc. which makes the addition as bad in law. 8. That the ld. CIT(A) erred on facts and law in confirming the ex- parte assessment orders passed by the ld. AO u/s. 144 dated 27.12.2017 in violation of principles of natural justice because neither notice u/s. 148 nor any other statutory notice was ever received by the assessee nor his authorized representative which makes the entire proceedings nullity in eyes of law. 9. That the appellant craves leave to add add/alter any/all grounds of appeal before or at the time of hearing of the appeal. 3. Tersely, we advert the fact of the case. That the assessee for assessment year 2010-11 was shifting to Canada from India. The assessment was reopened u/s. 148 for the following reasons related to the cash deposit in the bank account of the assessee amount to Rs. 40,17,500/-. But the ld. AO was unable to serve the notice to the assessee because the assessee was permanently shifted to Canada by leaving India. No intimation was issued to the ld. AO in relation to change of address of the assessee. The ld. AO issued notice as per PAN data basis. The reopening was meant for AIR return. The assessment was completed by addition of amount of Rs.15,17,500/- on the basis of peak credit for depositing in the bank account of the assessee. Aggrieved assessee challenged the facts and legal grounds. The assessee challenged the legal grounds before Jasandeep Singh Sidhu, Bathinda Asstt Year 2010-11 ITA No. 310/ASR/2019 the CIT(A) related to the service of notice. The ld. Counsel during the arguments challenged the non-service of notice and defective affixture of notice by the ld. AO in relation to service of notice u/s.148. The ld. CIT(A) considered the facts and after due cognizance of the documents under rule 46A of the income Tax Rule, 1962, had uphold the order of ld. AO. The assessee challenged the order of CIT(A) before ITAT. Before ITAT assessee challenged the facts and the legal grounds. The assessee raised two legal grounds. One related to service of the notice and second related to reopening of assessment as per information of AIR data. The ITAT adjudicated both the grounds as below: - 4. During the hearing before ITAT, the ld. Counsel vehemently argued and relied on the legal grounds of the assessee. The ld. counsel first challenged the jurisdiction of AO for completing the assessment regarding non issuance of notice u/s.148 as the assessee had left India and permanently staying in Canada. In the affixture of the notice no witness was signed. So the entire affixture is illegal and void. The Assessing Authority issue the notice dated 30.03.2017 through Speed Post. Also affixture was made on 31 st March 2017. The 142(1) notice was also served but none was present on behalf of the assessee and the assessment was completed u/s. 144 of the Act. Jasandeep Singh Sidhu, Bathinda Asstt Year 2010-11 ITA No. 310/ASR/2019 4.1 The ld. Counsel further challenged that assessment is itself bad in law for non-receiving the notice by the assessee during the assessment proceedings. He further challenged that reopening was meant u/s. 148 on the basis of AIR information. Recorded reasons of the ld. AO is fully dependent on borrowed satisfaction. So the reopening is itself bad in law. 5. The ld. SR Dr relied on the order of Revenue Authorities. He further argued that assessee was not served due to his absence. The notice was issued within time limit i.e. 30.03.2017. The assessee did not inform to the revenue department and had not filed the return of income. The ld. AO issued notice on the basis of available record in PAN data basis. 6. We heard the rival submissions and persued the documents available in the record. The ld. counsel of the assessee argued on two legal grounds by challenging the jurisdiction of ld. AO for completion of assessment u/s. 144. But ld. AO had issued notice to the assessee as per the available record in PAN data basis. There is no error on the part of the ld. AO on the service of the notice to the assessee within stipulated time. The assessee also had not informed the ld. AO about his current jurisdiction or the communication address for serving of notice. Related to the grievance for reopening on basis of AIR data which is related to borrowed satisfaction of the AO, this ground is agitated first time before the ITAT. This particular ground was not taken before the CIT(A). In our Jasandeep Singh Sidhu, Bathinda Asstt Year 2010-11 ITA No. 310/ASR/2019 opinion the said ground should be considered by the CIT(A) on the basis of available record. The ld. Counsel had not made any argument on factual ground during the hearing. So, the only ground related to reopening on basis of AIR data is setting aside to the CIT(A) for adjudication. Needless to say, the assessee should get reasonable opportunity of hearing before the CIT(A) for his argument. 7. In the result the ground no. 1 to 3 of the assessee are dismissed. Ground no. 4 and 5 of the assessee are allowed for statistical purpose and ground no. 6 to 8 are not pressed. Ground no. 9 is general in nature. The appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 20 .09.2022 Sd/- Sd/- (Dr. M. L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(A), (4) The CIT concerned (5) The Sr. DR, I.T.A.T (6) The Guard File True Copy By Order