SHRI DEO NARAYAN SAHU, DHAMTARI V. INCOME TAX OFFICER, DHAMTARI

ITA 32/RPR/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3188 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 18-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 2

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ रायप ु र मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR (Through Virtual Court) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI JAMLAPPA D BATTULL, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 32/RPR/2018 Ǔनधा[रण वष[ / Assessment Year : 2011-12 Shri Dev Narayan Sahu Village- Bhatagaon (Rudri) Dhamtari (C.G.)-493 776 PAN : CUGPD5529R .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Dhamtari (C.G.) ......Ĥ×यथȸ / Respondent Assessee by : None Revenue by : Shri G.N Singh, DR स ु नवाई कȧ तारȣख / Date of Hearing : 26.04.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 29.04.2022 2 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-1, Raipur dated 01.12.2017, which in turn arises from the order passed by the A.O under Sec. 143(3)/148 of the Income Tax Act, 1961 (for short the ‘Act’) dated 21.11.2016 for assessment year 2011-12. Before us the assessee has assailed the impugned order on the following grounds of appeal: “1. In the facts and circumstances of the case and in law, the learned Commissioner of income Tax (Appeals) has erred in upholding the re- assessment proceedings initiated u/s.147 of the Income Tax Act, 1961 and the assessment order passed without issuing notice u/s.143(2) of the Act. 2. In the facts and circumstances of the case and in law, the learned Commissioner of income Tax (Appeals) has erred in confirming the addition of Rs.24,00,000/- made as income from other sources u/s.56 of the Income Tax Act, 1961. 3. The appellant reserves the right to add, alter, amend or omit all or any of the grounds of appeal.” 2. On the basis of information received by the Assessing Officer that the assessee had though sold an immovable property admeasuring 4900 sq. ft (Rakba-0.045 Hactare) bearing Khasra Number 2474/1, situated at Danitola Ward (No.33), Dhamtari (C.G.), but had not filed 3 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 his return of income, his case was reopened u/s.147 of the Act. Notice u/s.148 of the Act was, thereafter, issued to the assessee. 3. During the course of the assessment proceedings, it was observed by the Assessing Officer that the assessee had sold the aforesaid property in question for a consideration of Rs.31 lacs on 26.04.2010 which, however, was registered for a sale consideration of Rs.7 lacs only. On a perusal of the records, it was gathered by the Assessing Officer that the assessee had not disclosed Long Term Capital Gain (for short ‘LTCG’) arising from sale of the aforesaid property by filing his return of income for the year under consideration. It was further noticed by the Assessing Officer that the assessee during the year under consideration had paid an amount of Rs.31 lacs in cash to Shri Hari Sahu ,i.e., his son-in-law. On being queried as regards the source of the aforesaid payment, it was submitted by the assessee that the same was sourced from, viz.(i) out of sale of consideration of immovable property: Rs.7 lacs; and (ii) out of his past savings of agricultural income: Rs.24 lacs. As the explanation of the assessee did not find favour with the Assessing Officer, therefore, he vide his order 4 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 passed u/s.143(3)/148 of the Act, dated 21.11.2016 added the amount of Rs.24 lacs (supra) as the income of the assessee from “other sources”. Also, the Assessing Officer determined the LTCG on sale of the aforesaid property in question at Rs.5,25,810/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without any success. 5. The assesee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. As the assessee appellant despite having been intimated about the hearing of appeal had failed to put up an appearance before us, therefore, we are constrained to proceed with and dispose off the appeal as per Rule 24 of the Appellate Tribunal Rules, 1963, i.e, after hearing the respondent revenue and perusing the orders of the lower authorities. 6. We have heard the Ld. Departmental Representative (for short ‘DR’) and considered the orders of the lower authorities. On a perusal of the order of the CIT(Appeals), we find that the assessee had assailed the validity of the assessment framed by the Assessing Officer 5 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 u/s.143(3)/148 of the Act, dated 21.11.2016, inter alia, for the reason that now when he had not filed any return of income i.e. either u/s.139 of the Act or in response to the notice issued u/s.148 of the Act then, no assessment u/s.143(3) of the Act could have been framed in his case. We find that the CIT(Appeals) after considering the aforesaid claim of the assessee, had observed, that though admittedly no notice u/s.143(2) of the Act was issued by the Assessing Officer, however, the latter had duly issued a notice u/s.142(1) of the Act dated 16.09.2016 and called for requisite details/documents vide Sl. No.(s) (i) to (ix) of the said notice. Further, it was observed by the CIT(Appeals) that the Assessing Officer had, thereafter, issued another notice u/s.142(1) of the Act, dated 04.10.2016 wherein he had directed the assessee to attend his office personally or through duly authorized representative on 14.10.2016 at 3.30pm a/w. required information /documentary evidence, bank account etc. Observing, that as all the ingredients of the notice u/s.143(2) of the Act could safely be traced/gathered from the aforesaid notice u/s.142(1) of the Act, dated 14.10.2016, the CIT(Appeals) was of the view that said notice could be 6 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 viewed as a notice u/s.143(2) of the Act. Accordingly, on the basis of his aforesaid observations the CIT(Appeals) upheld the order passed by the Assessing Officer u/s.143(3)/148 of the Act, dated 21.11.2016. For the sake of clarity and in order to dispel any doubt the observations of the CIT(Appeals) are reproduced as under: “2.3. First, taking the addition ground taken by the appellant challenging the validity of order passed u/s.143(3)/148 as not return of income was filed by him either u/s.139 or u/s.147. As per the assessee in case of no return, the assessment cannot be made u/s.143(3)/147. On going through the assessment order I find that AO has duly issued notice u/s.142(1) on 16/09/2016 calling details/documents vide Sl. No. (i) to (ix) of the notice. As per sub section 2 of Section 143 “ where as return has been furnished u/s.139 or in response to a notice in under sub section (1) of Section 142, the AO...........shall serve on the assessee a notice requiring him............either to attend the office of the AO or to produce or cause to be produce before the AO any evidence on which the assessee may rely in support of the return”. After the notice u/s.143(2) is issued, order is passed u/s.143(3). In the present case after issue of notice u/s.143(1) as discussed above, the AO has issued another notice dated 04/10/2016 requiring the assessee to attend the office personally or through any authorized representative along with the required information, documentary evidences, bank account etc. on 14/10/2016 at 3.30pm. As can be seen this notice has all the ingredients of a notice u/s.143(2) although the section has not been specifically mentioned. Obviously, this notice has to be viewed as a notice u/s.143(2). Therefore, passing of assessment order u/s.143(3)/147 has been as per Act and appellant’s allegation being without basis is hereby dismissed.” 7. After having given a thoughtful consideration to the issue involved in the present appeal, we are unable to persuade ourselves to concur with the view taken by the CIT(Appeals). Admittedly, it is a 7 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 matter of fact borne from record that the assessee had neither filed any return of income u/s.139 of the Act or in response to the notice issued u/s. 148. Also, no notice u/s.143(2) of the Act was ever issued by the Assessing Officer. In our considered view, the issuance of notice u/s.143(2) of the Act presupposes the existence of a valid return of income filed by the assessee which we are afraid was never so filed in the case of the assessee before us. Backed by our aforesaid observations, we are of the considered view that now when the assessee had not filed any return of income either u/s.139 of the Act, or in compliance to the notice u/s.148 of the Act, therefore, there was no justification on the part of the Assessing Officer to have framed the impugned assessment u/s.143(3)/148 of the Act, dated 21.11.2016. As is discernible from the order of the CIT(Appeals), we find that the claim of the assessee before him that in absence of any return of income having been filed by him either u/s.139 or in response to the notice issued u/s.148 of the Act, no assessment u/s.143(3) of the Act could have been validly framed in his hands, was rebutted by the CIT(Appeals) on the ground that the notice(s) u/s.142(1) of the Act, 8 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 dated 16.09.2016 and 04.10.2016 could be viewed as a notice u/s. 143(2) of the Act. In our considered view, the aforesaid observation of the CIT(Appeals) is not only misconceived in the context of the issue which was raised by the assessee before him, but in fact is absolutely devoid and bereft of any force of law. As observed by us herein above, it was claimed by the assessee that now when he had not filed any return of income with the Assessing Officer then how could an assessment be framed u/s.143(3) of the Act in his case. However, the CIT(Appeals) loosing sight of the issue raised by the assessee before him, had upheld the order passed by the Assessing Officer u/s.143(3)/148 of the Act dated 21.11.2016 on the ground that notice u/s.142(1) of the Act, (supra) could safely be viewed/construed as a notice u/s.143(2) of the Act. In our considered view, the aforesaid observation of the CIT(Appeals) was absolutely out of context of the claim that was raised by the assessee before him. 8. Be that as it may, in our considered view, as stated by the assessee before the CIT(Appeals), and rightly so, in the absence of any return of income having been filed by him, no assessment 9 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 u/s.143(3)/148 of the Act could have been framed in his hands. Adverting to the observation of the CIT(Appeals) that notice(s) issued u/s.142(1) of the Act, dated 16.09.2016 and 04.10.2016 could be viewed as a notice u/s.143(2) of the Act, though, is not germane to the claim of the assessee, but we may herein clarify that the same is even otherwise absolutely misconceived and misplaced. In our considered view, the framing of an assessment u/s.143(3) of the Act presupposes the issuance of a notice u/s.143(2), the existence of which by no means or stretch of imagination can be substituted by a notice issued u/s.142(1) of the Act. Our aforesaid conviction that issuance of notice u/s.143(2) of the Act is a sine-qua-non for framing of an assessment u/s.143(3) of the Act can safely be gathered from the judgment of the Hon’ble Supreme Court in the case of Assistant Commissioner of Income Tax Vs. M/s. Hotel Blue Moon, (2010) 321 ITR 362 ( SC). It has been held by the Hon’ble Apex Court that the issue of notice u/s.143(2) of the Act is mandatory and not procedural and if the notice is not served within the prescribed period, then, the assessment order would be invalid. 10 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 9. We, thus, in terms of our aforesaid observations are unable to concur with the view taken by the CIT(Appeals) who had upheld the assessment framed by the Assessing Officer u/s.143(3)/148 of the Act, dated 21.11.2016 and accordingly, set aside his order. Thus, the assessment framed by the Assessing Officer u/s.143(3)/148 of the Act, dated 21.11.2016 being devoid and bereft of any force of law is hereby quashed. 10. In the result, appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced in open court on 29 th day of April, 2022. Sd/- Sd/- JAMLAPPA D BATTULL RAVISH SOOD ACCOUNTANT MEMBER JUDICIAL MEMBER रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 29 th April, 2022 SB 11 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायप ु र बɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 12 Shri Dev Narayan Sahu Vs. ITO ITA No.32 /RPR/2018 Date 1 Draft dictated on 26.04.2022 Sr.PS/PS 2 Draft placed before author 29.04.2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order