NAMRATA DILIP MUKKAWAR, MUMBAI V. ITO 17(3)(3), MUMBAI

ITA 3641/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9906 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 20-04-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 25-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMIALINGSHEN
• Keywords: Invalid notice; Reason to believe
• Section: 142(1); 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE D.T. GARASIA, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO.3641/M/2016 ASSESSMENT YEAR: 2006-07 MS. NAMRATA DILIP MUKKAWAR, FLAT B/5/6/, 1 ST FLOOR, SULEMAN MANZIL, DADAR-EAST, MUMBAI-400 014 PAN: AEFPM-5400-B VS. INCOME TAX OFFICER 17(3)(3), PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400012 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : MS. DINKLE HARIYA, A.R. REVENUE BY : SHRI M.C. OMIALINGSHEN, D.R. DATE OF HEARING : 20.04.2017 DATE OF PRONOUNCEMENT : 14.07.2017 O R D E R PER D.T. GARASIA , JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 16.03.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2006-07. 2. GROUND NO.1 IS GENERAL, HENCE IT DOES NOT REQUIR E ANY ADJUDICATION. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL AND DID NOT FILE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) HAS THE INFORMA TION THAT ASSESSEE HAS DEPOSITED CASH OF RS.11 LAKHS IN HER SAVING BANK AC COUNT WITH APNA SAHAKARI BANK LTD. AND RS.13,34,000/- WITH THE GREATER BOMBA Y CO-OP. BANK LTD. THE AO, THEREFORE, REOPENED THE ASSESSMENT AND MADE ATTEMPT TO SERVE THE NOTICE TO THE ASSESSEE UNDER SECTION 148 OF THE ACT . HOWEVER, AO COULD NOT LOCATE THE ASSESSEE AT KNOWN ADDRESS AND THEREFORE SERVED THE NOTICE BY ITA NO.3641/M/2016 M/S. NAMRATA DILIP MUKKAWAR 2 AFFIXTURE ON LAST KNOWN ADDRESS OF THE ASSESSEE. T HERE WAS NO COMPLIANCE FROM THE ASSESSEE TO THIS NOTICE UNDER SECTION 148 OF THE ACT. SIMILARLY, THERE WERE NO COMPLIANCES TO THE NOTICE UNDER SECTION 142 (1) ISSUED BY AO. IN ABSENCE OF COMPLIANCE, AO ADDED TOTAL CASH DEPOSIT OF RS.24,34,000/- AS INCOME OF THE ASSESSEE AND ALSO TAXED THE SAME AT M AXIMUM MARGINAL RATE. 4. ASSESSEE HAS FILED THE APPEAL BEFORE THE LD. CIT (A) AND THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. BEFORE US, THE LD. A.R. SUBMITTED THAT ASSESSEE HAS FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 WITH THE DEPARTM ENT. THE ASSESSEE HAD ALREADY GIVEN HIS TRUE ADDRESS TO THE DEPARTMENT. THE AO ISSUED A NOTICE UNDER SECTION 148 ON 28.03.13 AND SERVED BY THE AFFIXTURE ON 31.03.13. THE COPY OF THE SAID NOTICE IS NOT PROVIDED TO THE ASSESSEE AND REASONS FOR SERVICE OF NOTICE BY AFFIXTURE ARE NOT PROVIDED TO THE ASSESSEE DESPI TE URGE AND WRITTEN REQUESTS AS WELL AS REMINDERS AND FOLLOW UP IN THIS REGARDS. THERE IS NO MENTION HOW AND WHY THIS NOTICE IS SERVED BY THE AFFIXTURE. TH E LD. A.R. SUBMITTED THAT SIMILAR NOTICE WAS SERVED AND SENT TO CORRECT ADDRE SS OF THE ASSESSEE BY THE SAME OFFICER FOR A.Y. 2005-06. THE COPY OF THE NOT ICE DATED 16.01.14 ISSUED UNDER SECTION 142(1) TO THE ASSESSEE IS SHOWING THE CORRECT ADDRESS OF THE ASSESSEE AS 4/139, LAXMI COTTAGE, DR. AMBEDKAR ROAD , PAREL, MUMBAI- 400008. IN FACT, THE SAID ADDRESS WAS NOT ONLY HAS INCORRECT PIN AS 400 008 INSTEAD OF 400012 BUT ALSO BLATANTLY WRONG ADDRESS OF 4/139, LAXMI COTTAGE, DR. AMBEDKAR ROAD, PAREL, MUMBAI. THE ASSESSEE WAS SERVED NOTICE FOR A.Y. 2005-06 DATED 09.03.14 TO THE CORRECT ADDRESS OF TH E ASSESSEE I.E. SULEMAN MANZIL, DR. B.A. ROAD, MUMBAI 400 014 AND THE REP LY TO THE SAID NOTICE WAS ALSO SERVED BY THE ASSESSEE. THE OBSERVATION OF TH E AO WAS THAT SERVICES OF NOTICE UNDER SECTION 148 AND UNDER 142(1) OF THE AC T ON THE ADDRESS LAXMI COTTAGE, DR. AMBEDKAR ROAD, PAREL, MUMBAI-400008 A S THE LAST KNOWN ADDRESS WHICH WERE RETURNED UNSERVED BY POSTAL AUTH ORITY ARE FACTUALLY ITA NO.3641/M/2016 M/S. NAMRATA DILIP MUKKAWAR 3 INCORRECT AND THE COPIES OF SUCH ADVICE OF POSTAL A UTHORITY HAS NOT BEEN PROVIDED TO THE ASSESSEE DESPITE HER REPEATED REQUE STS AND FOLLOW UP IN THIS CONNECTION. LD. A.R. HAS RELIED UPON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF TECHPAC HOLDINGS LTD. VS. DCIT (2016 ) 382 ITR 474 (BOM) AND SUBMITTED THAT THE DEPARTMENT HAS TO PROVE THAT SER VICE OF NOTICE WAS SERVED UPON THE ASSESSEE, IF THE NOTICE UNDER SECTION 148 WAS NOT SERVED AND THE CONSEQUENT ORDER PASSED UNDER SECTION 144 OF THE AC T, THEN IT WOULD BE VOID AND INOPERATIVE. LD. A.R. ALSO SUBMITTED THAT IT I S NON APPLICATION OF MIND BY THE AO AND SIMPLY REOPENED THE ASSESSMENT ORDER. T HE LD. A.R. ALSO RELIED UPON THE DECISION OF DELHI BENCH OF ITAT IN THE CAS E OF BIR BAHADUR SINGH SIJWALI VS. ITO 68 SOT 197 (DELHI) WHEREIN IT WAS H ELD THAT MERELY IF THE DEPOSIT FOUND IN THE SAVINGS BANK ACCOUNT DOES NOT INDICATE THAT THESE DEPOSITS CONSTITUTE AN INCOME WHICH HAS ESCAPED ASSESSMENT. THE REASONS RECORDED FOR REOPENING THE ASSESSMENT DO NOT MAKE OUT A CASE THA T THE ASSESSEE WAS ENGAGED IN SOME BUSINESS AND THE INCOME FROM SUCH A BUSINES S HAS NOT BEEN RETURNED BY THE ASSESSEE. THE LD. D.R. SUBMITTED THAT THE ADDRESS OF THE ASS ESSEE ON WHICH THE FINAL SHOW CAUSE NOTICE WAS SERVED IS THE SAME WAS MENTIONED IN PAN AS WELL AS IN FORM 35. THE BANK OF THE ASSESSEE HAS UPLOAD ED THE TRANSACTION DETAILS MENTIONING THE ADDRESS OF AMBEDKAR ROAD, PAREL. TH E AO HAS ISSUED THE NOTICE UNDER SECTION 148 ON THIS ADDRESS. THE BANK CANNOT IMAGINE AN ADDRESS FOR THE ASSESSEE AND THE ADDRESS WOULD HAVE BEEN PR OVIDED TO THE BANK BY THE ASSESSEE HERSELF. THEREFORE, THIS CONSTITUTES VALI D SERVICE OF NOTICE BY AFFIXTURE AT THE ADDRESS MENTIONED BY THE BANK OF THE ASSESSE E. THE PROVISIONS OF SECTION 292BB CLEARLY APPLY TO THE FACTS OF THE CAS E. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING INTO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESS EE HAS TAKEN THE CONTENTION BEFORE US THAT THE AO HAS ISSUED THE NOTICE UNDER S ECTION 148 ON 20.03.13 AND SERVED BY AFFIXTURE ON 31.03.13. THE ASSESSEE HAS TAKEN THE CONTENTION THAT THE ITA NO.3641/M/2016 M/S. NAMRATA DILIP MUKKAWAR 4 SAID NOTICE WAS SERVED BY AFFIXTURE ON THE ADDRESS AS 4/139, LAXMI COTTAGE, DR. AMBEDKAR ROAD, PAREL, MUMBAI-400008. THE LD. A.R. SUBMITTED THAT THE ASSESSEES CORRECT ADDRESS IS AS PER THE RETURN FIL ED FOR A.Y. 2006-07. THE CORRECT ADDRESS IS WAKANI BUILDING, GROUND FLOOR, C -28, JAGANNATH BHATANKAR MARG, PAREL, MUMBAI 400 012. ASSESSEES RETURN H AS BEEN FILED IN THE OFFICE OF AO WITH WARD NO.73(3)(3), PIRIMAL CHAMBERS. THE RETURN FOR 2006-07 HAS BEEN FILED ON 31.03.07. THE ASSESSEE WAS NEVER RES IDING ON THE ADDRESS ON WHICH THE NOTICE WAS AFFIXED. DURING THE COURSE OF HEARING, THE LD. A.R. HAS ALSO GIVEN THE COPY OF THE NOTICE WHEREIN THE RETUR N FOR 2005-06 THE AO HAS MENTIONED THE ADDRESS AS MRS. NAMRATA DILIP MUKKAWA R, MUKKAWAR FLOOR, SULEMAN MANZIL, DR. B.A. ROAD, MUMBAI 400 014. 7. THE LD. A.R. SUBMITTED BEFORE US THAT THE SAME AO, WARD NO.17(3)(3), MR. B.K. ARUN, ON 09.03.12, HAS SENT THE NOTICE AND ASSESSEE HAS REPLIED TO THE SAME NOTICE. 8. WE FIND THAT THE AO HAS SERVED THE NOTICE UNDER SECTION 148 ON THE ADDRESS I.E. 4/139, LAXMI COTTAGE, DR. AMBEDKAR ROA D, PAREL, MUMBAI- 400008 AS HER LAST ADDRESS WHERE NOTICE WAS NEVER S ERVED TO THE ASSESSEE. FROM THE ABOVE FACTS, THE ASSESSEE IS ABLE TO PROVE THAT THE NOTICE UNDER SECTION 148 WAS NOT SERVED TO THE ASSESSEE. THE AO HAS ISS UED THE NOTICE ON THE ADDRESSEE WHICH WAS INTIMATED BY THE BANK BUT DURIN G THE COURSE OF HEARING, THE LD. D.R. COULD NOT BRING ANY EVIDENCE TO SHOW T HAT ASSESSEE WAS RESIDING ON THE ADDRESS 4/139, LAXMI COTTAGE, DR. AMBEDKAR R OAD, PAREL, MUMBAI- 400008. 9. THE LD. D.R. COULD NOT BRING ANY EVIDENCE TO SH OW THAT THE ASSESSEE WAS RESIDING ON THE LAST ADDRESS AS STATED IN THE N OTICE UNDER SECTION 148. 10. WE FIND THAT SIMILAR ISSUE HAD COME UP BEFORE T HE HONBLE BOMBAY HIGH COURT IN THE CASE OF TECHPAC HOLDINGS LTD. VS. DCIT (SUPRA) WHEREIN IT IS ITA NO.3641/M/2016 M/S. NAMRATA DILIP MUKKAWAR 5 HELD THAT AS STIPULATED UNDER SECTION 147 OF THE AC T, THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT HAS TO BE SERVED UPON THE AS SESSEE. THIS IS A SINE QUA NON BEFORE ANY FURTHER ACTION CAN BE TAKEN. IF THIS N OTICE ITSELF IS NOT SERVED, ALL OTHER PROCEEDINGS THAT FLOW THERE FROM WOULD HAVE N O BASIS. PROCEEDINGS TAKEN BY THE INCOME TAX OFFICER IN PURSUANCE OF THE INVALID NOTICE AND THE CONSEQUENT ORDERS ON ASSESSMENT PASSED BY HIM, WOUL D BE VOID AND INOPERATIVE. THE INCOME TAX OFFICER WOULD HAVE JUR ISDICTION TO PROCEED FURTHER ONLY IF THE NOTICE IS SERVED ON THE ASSESSE E AS REQUIRED. 11. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT T HE NOTICE SERVED TO THE ASSESSEE WAS NON APPLICATION OF MIND BY THE AO WHIL E ISSUING THE NOTICE AND THE ORDER OF RE-ASSESSMENT WAS PASSED WITHOUT JURIS DICTION. WE WOULD LIKE TO REPRODUCE JUDGMENT OF JURISDICTIONAL HIGH COURT WHE REIN IT IS HELD AS UNDER: AS STIPULATED UNDER SECTION 147 OF THE INCOME-TAX ACT, 1961, THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT HAS TO BE SERVED ON TH E ASSESSEE. THIS IS A SINE QUA NON BEFORE ANY FURTHER ACTION CAN BE TAKEN. IF THIS NOTICE ITSELF IS NOT SERVED, ALL OTHER PROCEEDINGS THAT FLOW THEREFROM WOULD HAVE NO BASIS. PROCEEDINGS TAKEN BY THE INCOME-TAX OFFICER IN PURSUANCE OF THE INVALID NOTICE AND THE CONSEQUENT ORDERS ON ASSESSMENT PASSED BY HIM, WOULD BE VOID AND INOP ERATIVE. THE INCOME-TAX OFFICER WOULD HAVE JURISDICTION TO PROCEED FURTHER ONLY IF THE NOTICE IS SERVED ON THE ASSESSEE AS REQUIRED. Y. NARAYANA CHETTY V. ITO [1959] 35 ITR 388 (SC) RE LIED ON. SECTION 143(2) OF THE ACT APPLIES WHERE A RETURN OF INCOME HAS BEEN FURNISHED EITHER UNDER SECTION 139 OR IN RESPONSE TO A NOTICE UNDER SECTION 142(1) OF THE ACT. THEREFORE, SECTION 143(2) WOULD COME INTO PLAY ONLY WHEN A RETURN IS FURNISHED UNDER SECTION 139 OF THE ACT OR A RETURN IS FURNISH ED IN RESPONSE TO A NOTICE UNDER SECTION 142(1) OF THE ACT. NOTICE CAN NEVER BE ISSU ED ON THE SAME DATE UNDER SECTIONS 142(1) AND 143(2) OF THE ACT. BEFORE ANY N OTICE UNDER SECTION 148 OF THE ACT CAN BE ISSUED FOR INITIATING ASSESSMENT OR REAS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER OUGHT TO HAVE REASON TO BELIEVE T HAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THAT PARTICULAR ASSESSME NT YEAR. THIS REASON TO BELIEVE IS A SINE QUA NON FOR ISSUANCE OF NOTICE UNDER SECT ION 148. 12. RESPECTFULLY FOLLOWING THE ORDER OF JURISDICTIO NAL HIGH COURT, WE HOLD THAT THE NOTICES, UNDER SECTION 148 AND 142(1) OF T HE ACT ON THE ADDRESS 4/139, LAXMI COTTAGE, DR. AMBEDKAR ROAD, PAREL, MUMBAI-400 008 AS LAST KNOWN ADDRESS, WERE NOT SERVED IN CORRECT ADDRESS AND IT IS IMPROPER, INVALID AND ITA NO.3641/M/2016 M/S. NAMRATA DILIP MUKKAWAR 6 UNLAWFUL. THEREFORE, SERVICE OF NOTICE ISSUED UNDE R SECTION 148 FOR A.Y. 2006- 07 BY AFFIXTURE ON INCORRECT ADDRESS IS IMPROPER, H ENCE, WE ALLOW THE APPEAL. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 14.07.2017. SD/- SD/- ( N.K. PRADHAN) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 14.07.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.