Sh. Gurcharan Singh S/o. S. Dalip Singh, Chandigarh V. The Income-tax Officer, Muktsar

ITA 331/ASR/2014

• Counselvise Citation: 33120914 RSA 2014
• Duration Of Justice: 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 15-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKESH BANSAL CA S; ASWANI KUMAR
• Keywords: Principle of natural justice
• Section: 142(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 331 (ASR)/2014 ASSESSMENT YEAR: 2006-07 PAN: BELPS5838A GURCHARAN SINGH OF S. DALIP SINGH H. NO.1172, SECTOR 15B, CHANDIGARH VS. INCOME TAX OFFICER, WARD 2(II), MUKTSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.TARSEM LAL DR RESPONDENT BY: SH. ASWANI KUMAR & SH. RAKESH BANSA L, C.AS DATE OF HEARING: 02.02.2015 DATE OF PRONOUNCEMENT: 19.02.2015 ORDER PER A.D. JAIN, J.M. 1. THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2006-07 AGAINST THE ORDER DATED 21.02.2014, PASSED BY THE L EARNED CIT(A), BATHINDA. 2. THE FOLLOWING GROUNDS HAVE BEEN TAKEN: I. THAT, ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT , 1961 IS AGAINST LAW AND FACTS ON THE FILE IN AS MUC H AS THE LD. COMMISSIONER OF INCOME TAX (APPEALS), BATHINDA WAS NOT JUSTIFIED TO UPHOLD THE VERY INITIATION OF PROCEEDINGS U/S 148. II. THAT THE NOTICE U/S 148 WAS NOT SERVED IN ACCORDANC E WITH THE PROVISIONS OF SECTION 282 OF THE INCOME TA X 2 I.T.A. NO. 331 (ASR)/2014 ASSESSMENT YEAR: 2006-07 ACT, 1961 AS SUCH THE PROCEEDINGS INITIATED ARE VOI D AB-INITIO AND DESERVES TO BE QUASHED. III. THAT THE LD. CIT(A) GRAVELY ERRED IN QUASHING THE ASSESSMENT AS WHILE FRAMING ASSESSMENT, PRINCIPLES OF NATURAL JUSTICE WERE GROSSLY VIOLATED. IV. THAT LD. CIT(A) GRAVELY ERRED IN NOT PROVIDING THE APPELLANT WITH THE OPPORTUNITY TO CROSS EXAMINE THE PERSONS ON THE BASIS OF WHOSE STATEMENT NOTICE U/S 148 HAS BEEN ISSUED AND THE ASSESSMENT HAS BEEN FRAMED, IT IS BOTH HAD IN LAW AGAINST THE PRINCIPAL OF NATURAL JUSTICE. V. THAT THE LD. CIT(A) GRAVELY ERRED IN UPHOLDING THE ADDITION OF RS.12,64,173/- ON ACCOUNT OF ALLEGED LO NG TERM CAPITAL GAIN. 3. THE LD. COUNSEL FOR THE ASSESSEE HAS PREFERRED TO ARGUE GROUND NO. 2(I) FIRST. 4. AS PER THE ASSESSMENT ORDER, NOTICE U/S 148 OF THE IT ACT WAS ISSUED ON 24.2.2012 AND SERVED ON THE ASSESSEE ON 1.3.2012. T HE LD. CIT(A) REJECTED THE ASSESSEES OBJECTION IN THIS REGARD, B Y OBSERVING AS FOLLOWS: REGARDING HE OBJECTION OF THE AR OF THE APPELLAN T THAT THE APPELLANT HAS SHIFTED TO CHANDIGARH MANY YEARS AGO ON THE BAS IS OF EVIDENCE I.E., RATION CARD ETC. IT IS STRANGE THAT NOTICE U/ S 1489 WAS RECEIVED BY SH. HARCHARAN SINGH, BROTHER OF THE APPELLANT, ON 0 1.03.2012 IN VILLAGE BARKANDI AND AFTERWARDS TWO NOTICES U/S 142 (1) WERE ALSO ISSUED AND SERVED ON THE BROTHER AND FAMILY MEMBERS OF THE APPELLANT BUT NOBODY BROUGHT THIS FACT ON RECORD. THE A/R OF THE APPELLANT HAS FAILED TO BRING ON RECORD THAT WHY SH. HARCHARAN SI NGH BROTHER OF THE APPELLANT ACCEPTED THE SERVICE OF NOTICES U/S 148/1 42(1)/ASSESSMENT ORDER AND DID NOT INFORM THE DEPARTMENT REGARDING T HE ADDRESS OF HIS BROTHER AT CHANDIGARH. THE AR OF THE APPELLANT HAS NOT RAISED ANY 3 I.T.A. NO. 331 (ASR)/2014 ASSESSMENT YEAR: 2006-07 OBJECTION REGARDING SERVICE OF NOTICES U/S 142(1) A ND ASSESSMENT ORDER AND FURTHER FAILED TO BRING ON RECORD THAT HO W THE APPEAL HAS BEEN FILED WITHIN TIME AGAINST THE ORDER PASSED U/S 144/142(1) ON HIS BROTHER OR ANY FAMILY MEMBER. THUS THE AO GAVE SUFF ICIENT OPPORTUNITIES TO THE APPELLANT TO BRING ON RECORD A NY EVIDENCE TO PROVE THAT HE WAS NOT RESIDING IN VILLAGE BARKANDI WHICH HE FAILED TO FURNISH. THE OBJECTION OF THE AR OF THE APPELLANT I S REJECTED. 5. THE ISSUE IS AS TO WHETHER THE NOTICE U/S 148 OF TH E I.T ACT WAS, IN FACT, SERVED ON THE ASSESSEE OR NOT. 6. AS PER THE ASSESSMENT ORDER, SUCH A NOTICE WAS ISSU ED ON 24.2.2012, WHICH WAS DULY SERVED ON THE ASSESSEE ON 1.3.2012. ACCORDING TO THE ORDER UNDER APPEAL (PARA 2 AT PAGE 9 OF THE IMPUGNE D ORDER),THE NOTICE U/S 148 WAS RECEIVED BY SH. HARCHARAN SINGH, BROTHE R OF THE ASSESSEE, ON 1.3.2012 IN VILLAGE BARKANDI. THE STAND TAKEN BY T HE ASSESSEE REMAINS, AS BEFORE THE LD. CIT(A), THAT NO NOTICE U/S 148 OF TH E ACT WAS SERVED EITHER ON THE ASSESSEE, OR ON ANY PERSON AUTHORIZED BY THE ASSESSEE. RELIANCE HAS BEEN PLACED ON THE FOLLOWING CASE LAWS: I) HONBLE DELHI HIGH COURT, IN THE CASE OF CIT VS. HOTLINE INTERNATIONAL P. LTD., REPORTED IN (296 I TR 133). II) HONBLE HIGH COURT OF DELHI, IN THE CASE OF CIT VS . RAJESH KUMAR SHARMA, REPORTED IN ( 311 ITR 235). III) ITAT DELHI BENCH B IN THE CASE OF CHETAN GUPTA VS. ACIT, CIRCLE-5, NEW DELHI, REPORTED IN ( 144 ITD 3 44). 7. ON THE OTHER HAND, THE LD. DR HAS CONTENDED THAT TH E LD. CIT(A) HAS OBSERVED THAT AFTER THE SERVING OF THE REASSESSMENT NOTICE ON THE BROTHER 4 I.T.A. NO. 331 (ASR)/2014 ASSESSMENT YEAR: 2006-07 OF THE ASSESSEE, TWO NOTICES U/S 142 (1) OF THE ACT WERE ALSO SERVED ON THE BROTHER AND FAMILY MEMBERS OF THE ASSESSEE, WHICH W AS NOT OBJECTED TO BY THE ASSESSEE AND PURSUANT THERETO, THE ASSESSMEN T ORDER WAS PASSED U/S. 144 OF THE ACT, WHICH ORDER WAS APPEALED AGAIN ST WITHIN LIMITATION. THE LD. DR CONTENDS THAT THE FINDING OF THE LD. CIT (A) THAT THE ASSESSEE THUS ACKNOWLEDGED THE SERVICE OF NOTICES U/S.148 /1 42(1) OF THE ACT ON HIS BROTHER AND FAMILY MEMBERS AND THAT THOUGH THE AO GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO BRING EVIDENCE TO PR OVE THAT HE WAS NOT RESIDING IN VILLAGE, THE ASSESSEE FAILED TO DO SO. 8. IN THIS REGARD, IT IS SEEN THAT THE ISSUE IS GOVERN ED BY SECTION 282 OF THE IT ACT, AS PER WHICH, A NOTICE UNDER THE ACT MAY BE SE RVED ON THE PERSON NAMED THEREIN, EITHER BY POST, OR AS IF IT WERE A S UMMON ISSUED BY COURT UNDER THE CODE OF CIVIL PROCEDURE, 1908. NOW ORDER V, C.P.C. GOVERNS THE SERVICE OF SUMMONS ISSUED BY A COURT. AS PER RU LE 12 OF ORDER V OF THE C.P.C, WHEREVER IT IS PRACTICABLE, SERVICE SHAL L BE MADE ON THE DEFENDANT IN PERSON, UNLESS HE HAS AN AGENT EMPOWER ED TO ACCEPT SERVICE, IN WHICH CASE, SERVICE ON SUCH AGENT SHALL BE SUFFI CIENT. 9. IN ACCORDANCE WITH RULES 13 AND 14 OF ORDER V OF THE C.P.C, IT IS ONLY IF A SUMMONS IS ACCEPTED BY A PERSON WHO IS AUTHORIZED TO DO SO, THAT THE DEFENDANT CAN BE SAID TO HAVE RECEIVED THE SUMMONS, OR THAT SERVICE IS GOOD SERVICE. 5 I.T.A. NO. 331 (ASR)/2014 ASSESSMENT YEAR: 2006-07 10. IN THIS CASE, IT REMAINS UNDISPUTED, AS NOTED BY TH E LD. CIT(A) IN THE IMPUGNED ORDER, THAT NOTICE U/S. 148 OF THE ACT WAS SERVED ON THE BROTHER OF THE ASSESSEE AND NOT ON THE ASSESSEE IN PERSON. NOW, THIS SERVICE HAS BEEN SOUGHT TO BE JUSTIFIED BY SEEKING REFUGE OF TH E ALLEGED FACT THAT LATER, TWO NOTICES U/S 142(1) OF THE ACT WERE ALSO SERVED ON THE BROTHER OF THE ASSESSEE AND THAT THE ASSESSMENT ORDER PASSED IN PU RSUANCE THERETO WAS CHALLENGED BY THE ASSESSEE IN TIME BY WAY OF APPEAL , THOUGH THE SAID ASSESSMENT ORDER WAS PASSED U/S 144 OF THE ACT. IT HAS BEEN ALLEGED THAT HARCHARAN SINGH, BROTHER OF THE ASSESSEE, ACCEPTED THE SERVICE OF THE NOTICES U/S. 148/142(1) OF THE ACT AND OF THE ASSES SMENT ORDER PASSED U/S 144 OF THE ACT AND DID NOT INFORM THE DEPARTMENT RE GARDING THE CHANDIGARH ADDRESS OF THE ASSESSEE. IT HAS BEEN OBS ERVED BY THE LD. CIT(A) AND PUT FORWARD AS ARGUMENT BY THE LD. DR BE FORE US, THAT IF THE ASSESSMENT ORDER RECEIVED BY HIS BROTHER STANDS ACK NOWLEDGED BY THE ASSESSEE BY FILING APPEAL THERE AGAINST WITHIN TIME , THIS AMOUNTS TO THE ASSESSEE HAVING ACKNOWLEDGED DUE SERVICE OF THE NOT ICE U/S 148 OF THE ACT. 11. HOWEVER, AS EVIDENT FROM THE AFORE-DISCUSSED PROVI SIONS OF THE C.P.C, AS APPLICABLE TO INCOME TAX PROCEEDINGS, AS PER SECTIO N 282 OF THE I.T. ACT, NO SUCH ACKNOWLEDGEMENT CAN CLOTHE NON-SERVICE OF NOTICE WITH THE GARB OF VALID SERVICE OF NOTICE. THE PROVISIONS OF ORDER V, RSULES 12 TO 6 I.T.A. NO. 331 (ASR)/2014 ASSESSMENT YEAR: 2006-07 15, C.P.C., AS DELIBERATED UPON HEREINABOVE, ARE AB SOLUTELY CLEAR AND DIRECT ON THE ISSUE. THEIR MANDATE IS UNDENIABLY TH AT IN THE ABSENCE OF SERVICE ON ANY PERSON WHO IS AUTHORIZED BY THE NOTI CEE TO ACCEPT SUCH SERVICE ON BEHALF OF SUCH NOTICEE, THE SERVICE CANN OT BE HELD TO BE VALID SERVICE. 12. IN THE PRESENT CASE, THE DEPARTMENT HAS NOT BROUGHT ANYTHING ON RECORD TO ESTABLISH THAT THE BROTHER OF THE ASSESSEE, NAMELY HARCHARAN SINGH, HAD BEEN AUTHORISED BY THE ASSESSEE TO ACCEPT SERVICE O F NOTICE ON BEHALF OF THE ASSESSEE. HARCHARAN SINGH, BROTHER OF THE ASSES SEE, ALSO NOT BEEN SHOWN TO BE AN AGENT OF THE ASSESSEE, ENTITLED TO R ECEIVE THE NOTICE U/S 148 OF THE ACT. 13. IN THESE FACTS, IT CANNOT BE HELD THAT RECEIPT OF T HE NOTICE U/S 148 OF THE ACT BY HARCHARAN SINGH, BROTHER OF THE ASSESSEE, AM OUNTED TO SERVICE OF NOTICE ON THE ASSESSEE, IRRESPECTIVE OF THE FACT TH AT THE ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT HAD BEEN CHALLE NGED IN APPEAL BY THE ASSESSEE WITHIN LIMITATION. 14. IN THE COMMISSIONER OF INCOME TAX VS. RAJESH KUMA R SHARMA, 311 ITR 235 (DELHI), IT HAS BEEN HELD TO THE EFFECT THA T IN A CASE WHERE THE REASSESSMENT NOTICE WAS RECEIVED BY A PERSON OTHER THAN THE ASSESSEE, AND WHERE THERE WAS NO MATERIAL ON RECORD TO SHOW THAT SUCH OTHER PERSON WAS AUTHORIZED TO RECEIVE SUCH NOTICE AND THE ASSES SEE WAS NOT IN RECEIPT 7 I.T.A. NO. 331 (ASR)/2014 ASSESSMENT YEAR: 2006-07 OF THE NOTICE AND THE ONUS OF THE REVENUE TO PROVE DUE SERVICE OF NOTICE DID NOT STAND DISCHARGED, IT COULD NOT BE HELD THAT THE RECEIPT OF THE NOTICE BY SUCH OTHER PERSON AMOUNTED TO SERVICE OF THE NOT ICE ON THE ASSESSEE. 15. IN VIEW OF THE ABOVE, FINDING FORCE IN THE GRIEVANC E SOUGHT TO BE RAISED BY THE ASSESSEE IN THIS REGARD, THE SAME IS ACCEPTE D. THEREFORE, THE ORDER UNDER APPEAL, CONCERNING THIS ISSUE, IS CANCELLED. AS A CONSEQUENCE, THE PROCEEDINGS INITIATED U/S 148 OF THE ACT AND ALL TH INGS PURSUANT THERETO, INCLUDING THE RE-ASSESSMENT ORDER DATED 30.11.2012, PASSED U/S. 147/143(3) OF THE ACT, WHICH HAS MERGED IN THE IMPU GNED ORDER, ARE ALSO CANCELLED. 16. SINCE THE PROCEEDINGS U/S. 148 OF THE ACT AGAINS T THE ASSESSEE STAND CANCELLED, AS ABOVE, NOTHING FURTHER REMAINS TO BE ADJUDICATED. AS SUCH, GROUND NOS. 1 & 3 TO 5 ARE REJECTED AS INFRUCTUOUS. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19T H FEBRUARY, 2015. SD/- SD/- (B.P. JAIN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 .02. 2015 /PK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. DEEPAK MITTAL 2. THE ASSIT. COMMISSIONER OF INCOME TAX, HOSHIARPUR C IRCLE 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T. ASR. 8 I.T.A. NO. 331 (ASR)/2014 ASSESSMENT YEAR: 2006-07 TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL,