Rohit Goyal, Mumbai, Maharashtra V. Income Tax Officer, Ward 5(3), Indore, Indore

ITA 329/Ind/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0413 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-08-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 28-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 147; 69; 148; 271(1)(c); 144; 142(1); 205

Judgement Text

आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.329/Ind/2023 (Assessment Year: 2013-14) Rohit Goyal A 2904, Oberoi Woods, Mohan Gokhale Road, Goregaon East Maharashtra Vs. ITO, Ward 5(3) Indore (Appellant / Assessee) (Respondent/ Revenue) PAN: AKUPG2685D Assessee by Shri Pankaj Shah, & Shri Soumya Bumb, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 05.08.2024 Date of Pronouncement 07.08.2024 O R D E R Per Vijay Pal Rao, JM : This appeal by assessee is directed against the order dated 04.07.2023 of the Commissioner of Income Tax (Appeal), for A.Y.2013-14. The assesse has raised following grounds of appeal: “1. In the facts and circumstances of the case and in law the notice Issued u/s 148 dated 25/07/2018, is invalid and defective as it is neither signed physically nor signed digitally. The unsigned notice is bad in law and hence the subsequent proceedings are also bad in law. ITANo.329/Ind/2023 Rohit Goyal Page 2 of 8 2. The learned CIT appeal erred in confirming the addition made by the ITO of Rs.61,65,822 3. The addition for investment in purchase of property of Rs.60,64,086 is unsustainable which is made out of own resources out of income from salary regularly assess to tax and after availing the loan from banks. 4. Without prejudiced to ground no 2 the learned A.O erred in adopting the amount of Rs. 61,64,086 and thereby inflated the purchase price of immovable property by Rs. 1,00,000 without any reason. The addition of Rs. 1,00,000 is unsustainable 5. Without prejudiced the matter may be set aside to the LD AO with direction to verify the sources of investments in purchase property and assess the income as per the law 6. The learned A.O erred in muddling of the facts of date of issue of notice u/s 148 as of 25/07/2018 and also writing the date as of 01/03/2018 in the same notice under reference no ITBA/AST/F/17/201819/1010651603(1). In view of this the assessment is bad in law triggering from the defective notice. 7. In the facts and circumstance and in law the learned A.O erred in levying Interest u/s 2348, 234C of the act. 8. In the facts and circumstance and in law the earned A.O erred in Initiating penalty proceeding u/s 271F, 271(1)(b) and 271(1)(c) of the acts. 9. The Appellant craves leave to add, alter, modify, delete all or any of the grounds of appeal on or before of hearing.” 2. The ld. AR of the assesse has submitted that the notices issued by the AO u/s 148 of the Act is invalid for want of signature of the ITANo.329/Ind/2023 Rohit Goyal Page 3 of 8 AO therefore, the consequential order passed by the AO u/s 147 r.w. section 144 of the Act also bad in law and liable to be quashed. He has referred to the notice issued u/s 148 on 01.03.2018 and reminder notice dated 25.07.2018 and submitted that these notices are issued without signature of the AO either physically or digitally. He has also referred to section 282A of the Act and submitted that as per sub-section(1) of section 282A any notice or other documents to be issued under the Act by any Income Tax Authority shall be signed and issued in paper forum or communicated in electronic forum by that authority in accordance with such procedure as may be prescribed. Ld. AR has submitted that the impugned notice was issued by the AO electronically but it does not bear the digital signature of the AO and nothing has been mentioned at the bottom of the notice about digital signature. In support of his contention he has relied upon following decisions: (i) Vikas Gupta vs. Union of India 448 ITR 1(Allahabad High Court) (ii) Reuters Asia Pacitic Ltd. vs. DCIT 205 ITD 31 (ITAT, Mumbai) (iii) Toyota Tausho India (P.) Ltd. vs. DCIT 164 taxmann.com 85 3. Thus, Ld. AR has submitted that the notice issued u/s 148 is invalid and liable to be quashed and consequently the order passed by the AO is also liable to be quashed. 4. On the other hand, Ld. DR has submitted that as per sub- section (2) of section 282A a notice or other documents to be issued for the purpose of this Act by any income Tax Authority shall be ITANo.329/Ind/2023 Rohit Goyal Page 4 of 8 deemed to be authenticated if the name and office of a designated income tax authority is printed, stamped or otherwise written thereon. Ld. DR has contended that since the notice was issued electronically and therefore, it does not require any signature of the issuing authority when the name and designation of the authorities printed on the notice itself and also issued from the designated e- mail address of the Income Tax Authority in terms of Rule 127A of the Income Rules. Ld. DR has vehemently contended that even if the said notice issued by the AO u/s 148 electronically does not bear the signature of the AO authenticity of the same cannot be challenged and therefore, it is a valid notice. In support of his contention he has relied upon the judgment of Hon’ble Delhi High Court in case of Suman Jeet Agarwal vs. ITO 449 ITR 517. 5. We have considered the rival submissions as well as relevant material on record on the issue of validity of notice issued u/s 148 for want of signature of the AO. At the outset, we note that the assessee has challenged the communication dated 25.07.2018 in the grounds of appeal whereas the notice u/s 148 was issued by the AO on 01.03.2018 and thereafter the reminder was sent by the AO vide letter dated 25 th July 2018 regarding the notice issued u/s 148 dated 01.03.2018. Further the AO has passed ex-parte order u/s 144 r.w. section 147 of the Act when there was no compliance on behalf of the assesse to the notices issued by the AO. The AO has recorded the facts of issuing notice u/s 148 as well as section 142(1) as under: ITANo.329/Ind/2023 Rohit Goyal Page 5 of 8 “In This case information received through 1- Tax net that the assessee has Purchased of immovable property of Rs. 60,64,086/- and invested Rs 34,73,088/-in sale of equity shares in commodity exchange. Therefore after recording the reason u/s 147 a notice u/s 148 was issued on 01/03/2018. which was duly served upon the assessee through speed post No.E1184868970IN and through E-mail via ITBA Portal. Accordingly notice u/s 142(1) of the IT Act issued on 11/09/2018 along with questionnaire related to the case via speed post but assesse did not reply against this notice. Again notice u/s 142(1) issued on dated 05/11/2018 with hearing date fixed on 14/11/2018 and served to assesse on his mail via ITBA. But no response was receipt from the assessee. On the basis of nature of justice showcause was issued as providing the last opportunity to the assesse on 14/11/2018 and served via speed post E1846906861IN and assesse was asked to furnish the documentary evidence but again no response was received from the assesse. The Scrutiny case getting time barred on 31/12/2018 therefore there is no other option but the treat the assessment as best judgement u/s 144 of 1.T. Act 1961 and according in the absence of documentary evidence the amount of Rs 61,64,086/- invested in purchase of immovable property is treated as undisclosed investment u/s 69 of IT act and 0.05% of the Amount Rs 34,73,088/- invested in sale of equity shares in commodity exchange i.e Rs 1,736/-.” 5.1 The assesse challenged the order of the AO before the CIT(A) however, there was no compliance to the notices issued by the CIT(A) and consequently the appeal of the assessee was dismissed for want of any submissions on behalf of the assesse despite various notices. The CIT(A) has recorded the details of opportunity granted to the assesse in para 4.1 as under: ITANo.329/Ind/2023 Rohit Goyal Page 6 of 8 Sr. No. Date of hearing(S) 1 17.12.2019 2 08.01.2020 3 04.03.2020 4 27.08.2020 5 17.12.2020 6 02.03.2022 7 22.06.2023 5.2 Though the CIT(A) has not discussed the issues raised by the assesse in the grounds of appeal however, the fact remains that the assessee did not raised this issue of validity of notice issued u/s 148 for want of signature of the AO. The grounds of appeal raised before the CIT(A) are recorded in para 3 of the impugned order as under: “3. Grounds of appeal: 1. That the learned AO erred in reopening the case without any satisfaction as to escapement of income. Merely on the basis of suspicious, reasons were recorded and case was reopened. The case so reopened without there being a satisfaction of the AO is ITANo.329/Ind/2023 Rohit Goyal Page 7 of 8 illegal and wrong. The order so passed, therefore, require to be quashed. 2. That the learned AO erred in passing an exparte order without serving the notice at proper address. The order so passed without service of proper notice is illegal and wrong. The same, therefore, require to be quashed. WITHOUT PREJUDICE TO THE ABOVE 3. That the learned AO erred in passing an exparte order as early as on 13/11/2018 without even waiting for reply of the assessee. That the assessee was given date of hearing on 14/11/2018 whereas the assessment order was passed on 13/11/2018 i.e even before the date of hearing. This act of the assessee is against natural justice. On this count only, the order so passed require to be quashed. 4. That the learned AO erred in not giving proper opportunity of being heard to the assessee. The order so passed u/s 144, therefore require to be quashed. 5. That the learned AO erred in making addition u/s 69 of Rs. 61,64,086/-. The addition so made being illegal and wrong, the same require to be deleted.” 5.3 Thus, it is clear that this issue of validity of notice issued u/s 148 has been raised first time before this Tribunal and that too without seeking the leave of the Bench to raise an additional issue not raised before the authorities below. However, without going into technicalities of raising additional issue first time by the assesse before tribunal at the outset, we are of the considered view that entire matter requires reconsideration at the level of the AO as nothing was produced by the assesse either before the AO or before the CIT(A) in support of the source of investment made in purchase for immovable property as well as raising any objection against ITANo.329/Ind/2023 Rohit Goyal Page 8 of 8 notice issued u/s 148 of the Act. Accordingly in the facts and circumstances of the case and in the interest of justice we set aside the impugned order of the CIT(A) and remand the matter to the record of the AO for fresh adjudication after giving one more opportunity of hearing to the assessee. The AO shall also decide the objections of the assessee against notice issued u/s 148 of the Act before passing fresh assessment order. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 07.08.2024. Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member Indore,_ 07.08.2024 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore