ITO, New Delhi V. Sh. Jagdish Malhotra, New Delhi

ITA 3652/DEL/2013

• Counselvise Citation: 365220114 RSA 2013
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 06-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESANG Y SHERPR
• Assessee Lawyers: NAGESH KR BELI
• Keywords: Reassessment proceedings
• Section: 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. H.S.SIDHU , JM ITA NO. 3652-53/DEL/2013 : AS STT. YEAR : 2003-04 ITO WARD-25(4), ROOM NO. 1710, E-2, BLOCK CIVIC CENTRE NEW DELHI VS JAGDISH MALHOTRA B-3/226, PASCHIM VIHAR NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAIPM9318D APPELLANT BY : SH. KESANG Y. SHERPR, SR. DR RESPONDENT BY : SH. NAGESH KR. BELI, CA DATE OF HEARING : 11.08.2015 DATE OF PRONOUNCEMENT :13 .08.2015 ORDER PER N.K. SAINI, A.M. THESE TWO APPEALS BY THE DEPARTMENT ARE DIRECTED AG AINST THE ORDER DATED 20.3.2013 AND 25.3.2013 OF CIT(A) XXI V, NEW DELHI. 2. APPEAL IN ITA NO. 3653/DEL/2013 IS AGAINST QUAN TUM ADDITION WHILE THE APPEAL IN ITA NO. 3652/DEL/2013 RELATES TO THE PENALTY U/S 271(1)(C) OF THE IT ACT, 1961 ( HEREINA FTER REFERRED TO AS THE ACT). 3. FIRST, WE WILL DEAL WITH THE APPEAL ON QUANTUM ADDITION IN ITA NO. 3653/DEL/2013. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL : - ITA NO.3652-53/DEL/2013 2 ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN L AW CIT(A) HAS ERRED IN 1. QUASHING THE ASSESSMENT ORDER PASSED BY THE AO U/S 144/148 OF THE INCOME TAX ACT. 2. HOLDING THAT THE NOTICE WAS SERVED AT THE WRONG ADDRESS WHEREAS THE SAME ADDRESS WAS ALSO IN THE BA NK STATEMENT OF THE ASSESSEE AT THE TIME OF ASSESSMENT AND PENALTY ORDER SENT AT THE SAME ADDRESS WERE ALSO RECEIVED BY THE ASSESSE. 3. THE APPELLANT CRAVES THE RIGHT TO ADD, ALTER OR AME ND ANY GROUND OF APPEAL. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE AO ISSUED A NOTICE U/S 148 OF THE ACT TO THE ASSESSEE ON 26.3.2010 ON THE BASIS THAT AN INFORMATION WAS AVAILABLE WITH THE DEPARTMENT THAT THE ASSESSEE WANTED TO INTRODUCE UNACCOUNTED MONEY IN THE BOOKS OF ACCOUNTS WITHOUT PAYING TAX WITH THE HELP OF A MEDIATOR (ENT RY OPERATOR). THE SAID NOTICE RETURNED BACK AS UNSERVED WITH THE REMA RKS THAT HOUSE WAS FOUND LOCKED. THE AO FRAMED THE ASSESSMENT U/S 144 READ WITH SECTION 147 OF THE ACT AT AN INCOME OF RS. 32 LACS . 5.BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED THAT THE NOTICE U/S 148 OF THE ACT WA S NEVER SERVED ON THE ASSESSEE AND HENCE THE WHOLE ASSESSMENT WAS INV ALID , LIABLE TO BE QUASHED. IT WAS ALSO SUBMITTED THAT ALL THE NOTICE S WERE SENT TO THE ASESSEE AT THE ADDRESS B-2/ 226, PASCHIM VIHAR, NEW DELHI- 63, WHEREAS THE ASSESSEE WAS FILING THE RETURNS FROM HI S ADDRESS 69/6A, ITA NO.3652-53/DEL/2013 3 NAJAFGARH ROAD, NEW DELHI15. IT WAS FURTHER STATED THAT ASSESSEE HAD BEEN USING HIS ADDRESS AT NAJAFGARH ROAD SINCE 1993 AND ALL HIS RETURNS OF INCOME HAD BEEN FILED FROM THAT ADDRESS. IT WAS STATED THAT THE ASSESSEE HAD BEEN REGULARLY ASSESSED TO TAX WIT H DCIT CIR. 6(1), NEW DELHI AND NOT WITH ITO, WARD 25(4), NEW DELHI, WHO ISSUED THE NOTICE U/S 148 AND PASSED THE ORDER U/S 144/147 OF THE ACT. IT WAS STATED THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04 WITH DCIT CIR. 6 (1) ON 1.10.2003 DECL ARING AN INCOME OF RS. 10,69,690/-. IT WAS CONTENDED THAT SINCE THE NOTICE U/S 148 OF THE ACT WAS ISSUED AT A WRONG ADDRESS, THE ASSESSEE NEVER RECEIVED THE SAME AND FOR THIS VERY REASON EVEN THE SERVICE BY AFFIXTURE WAS NOT VALID AS IT WAS DONE AT A WRONG ADDRESS. THE RE LIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VINOD KUMAR GROVER IN ITA NO. 45/2011 ORDER DAT ED 13.05.2011AND IN THE CASE OF CIT VS. EGHAN HOLDINGS (P) LTD. (2010) 2 DTL ONLINE 297(DELHI). 5. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE OBSERVED THAT THE AO ISSUED THE NOTICE U/S 148 OF THE ACT TO THE ASSESSEE AT HIS ADDRESS B-2/226 PASCHIM VIHAR, NEW DELHI AND AFFIXTURE OF NOTICE HAD ALSO BEEN MADE AT THE SAME ADDRESS, AND THAT THE ASSESSMENT ORDER HAD BEEN PASSED WITH THE SAME ADDRESS WHEREAS THE ASSESSEE HAD SUBMITTED DOCUMENTS WHICH GO ON TO PROVE THAT HIS ADDRESS IN THE INCOME TAX DEPARTMENT SINCE 1993 IS 69/6A ITA NO.3652-53/DEL/2013 4 NAGAFGARH ROAD, NEW DELHI AND THE ASSESSEE HAD BEEN FILING HIS RETURNS OF INCOME FROM THIS ADDRESS ONLY. AS REGARD S TO THE ADDRESS B-2/226 PASCHIM VIHAR, NEW DELHI-63, THE LD. CIT(A ) OBSERVED THAT THIS HOUSE BELONGED TO SMT. VANDANA MALHOTRA, WIFE OF THE ASSESSEE WHICH WAS SOLD BY HER ON 6 TH FEBRUARY, 2008 AND THE NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE ON 26.03.2010. THE LD. C IT(A) CATEGORICALLY STATED THAT THE NOTICE U/S 148 WAS IS SUED TO THE ASSESSEE AT A WRONG ADDRESS AND SINCE ORDER HAD BEEN PASSED U/S 144 READ WITH SECTION 147 OF THE ACT, THE NOTICE U/S 148 WAS NEVE R SERVED ON THE ASSESSEE, THIS IS A FATAL FLAW, WHICH CANNOT BE CU RED AND WHICH RENDERS THE ASSESSMENT ORDER NULL AND VOID, AS THE ASSUMPTION OF JURISDICTION BY THE AO WAS NOT PROPER, AB INITIO. R ELIANCE WAS PLACED ON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF SMT. S. NACHIAR VS. ITO (2010) 326 ITR 0077(MAD). ACCCORDI NGLY THE REASSESSMENT PROCEEDINGS WERE HELD NULL AND VOID, A B INITIO AND WERE THEREFORE, QUASHED. 6. BEING AGGRIEVED THE DEPARTMENT IS IN APPEAL. THE LD . DR STRONGLY SUPPORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE NOTICE ISSUED FOR PENALTY AT THE SAME ADDRESS WAS R ECEIVED BY THE ASSESSEE. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFI ED IN QUASHING THE REASSESSMENT ORDER BY PRESUMING THAT THE NOTICE U/S 148 WAS ISSUED ON THE WRONG ADDRESS. IT WAS ALSO STATED THAT IN TH E PAN THE ASSESSEE HAD GIVEN THE ADDRESS OF PASCHIM VIHAR, THEREFORE, THE LD. CIT(A) ITA NO.3652-53/DEL/2013 5 WAS NOT JUSTIFIED IN HOLDING THAT HIS ADDRESS WITH THE INCOME TAX DEPARTMENT SINCE 1993 WAS 69/6A NAZAFGARH ROAD, NEW DELHI. 7. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND FURTHER SUBMITTED THAT THE NO PENALTY ORDER WAS REC EIVED BY THE ASSESSEE, SO IT IS WRONG TO SAY THAT THE PENALTY OR DER SENT AT THE PASCHIM VIHAR ADDRESS WAS SERVED UPON THE ASSESSEE . IT WAS FURTHER SUBMITTED THAT EVEN FOR THE ASSESSMENT YEAR 1989-90 THE PENALTY ORDER U/S 271(1)(C) OF THE ACT WAS PASSED BY THE AO AT THE ADDRESS 69/6A, NAJAFGARH ROAD, NEW DELHI AND THE ASSESSEE A LSO RECEIVED THE NOTICE U/S 221(1) OF THE DATED 29.11.2004 FOR THE A SSESSMENT YEAR UNDER CONSIDERATION AT THE SAME ADDRESS I.E. 69/6A, NAZAFGARH ROAD, NEW DELHI, FOR THE AFORESAID CONTENTION, OUR ATTENT ION WAS DRAWN TOWARDS PAGE NOS. 12 AND 14 OF THE ASSESSEES PAPER BOOK. IT WAS FURTHER SUBMITTED THAT THE COMMON NOTICE U/S 221(1) OF THE ACT DATED 28.01.2010 FOR THE ASSESSMENT YEARS 2003-04, 2004-0 5 AND 2005-06 WAS ALSO ISSUED ON THE SAME ADDRESS OF NAZAFGARH, OUR ATTENTION WAS DRAWN TOWARDS PAGE NO. 15 OF THE ASSESSEES PAPER B OOK. IT WAS FURTHER STATED THAT EVEN FOR A LATER ASSESSMENT YEA R I.E. ASSESSMENT YEAR 2008-09, THE NOTICE U/S 221(1) OF THE ACT WAS ISSUED ON 10.2.2011 AT THE ADDRESS 69/6A NAZAFGARH ROAD, NEW DELHI. IT WAS ACCORDINGLY SUBMITTED THAT THE ADDRESS OF THE ASSES SEE WAS 69/6A NAZAFGARH ROAD, NEW DELHI AND THE RETURN OF INCOME WAS FILED ON ITA NO.3652-53/DEL/2013 6 THE SAID ADDRESS COPY OF WHICH IS PLACED AT PAGE NO . 26 OF THE ASSESSEES PAPER BOOK AND EVEN THE INTIMATION U/S 1 43(1) OF THE SAID RETURN WAS ISSUED TO THE ASSESSEE AT THE SAME ADDRE SS COPY OF WHICH IS PLACED AT PAGE NO. 27 OF THE ASSESSEES PAPER BOOK. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PART IES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE O N THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE A O ISSUED THE NOTICE U/S 148 OF THE ACT TO THE ASSESSEE AT THE ADDRESS B -2/226 PASCHIM VIHAR, NEW DELHI-63 AND EVEN THE ASSESSMENT ORDER U /S 144 READ WITH SECTION 147 OF THE ACT WAS PASSED SHOWING THE SAME ADDRESS. ON THE OTHER HAND, THE CLAIM OF THE ASSESSES WAS TH AT HE NEVER RECEIVED THE NOTICE ISSUED BY THE AO U/S 148 OF THE ACT AND HIS ADDRESS IS 69/6A NAZAFGARH ROAD, NEW DELHI SINCE 19 93 AND EVEN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION U/S 139 OF THE ACT WAS FILED SHOWING THE SAME ADDRESS, THE SAID RETURN WAS PROCESSED U/S 143(1) OF THE ACT SHOWING THE ADD RESS AS 69/6A, NAZAFGARH ROAD, NEW DELHI COPY OF SAME IS PLACED AT PAGE NO. 27 OF THE ASSESSES PAPER BOOK. IN THE SAID INTIMATION IS SUED U/S 143(1) OF THE ACT FOR THE ASSESSMENT YEAR 2003-04, A DEMAND O F RS. 4,123/- OF THE TAX PAYABLE HAS BEEN RAISED. FROM THE ABOVE NA RRATED FACT, IT IS CRYSTAL CLEAR THAT THE NOTICE U/S 148 WAS ISSUED BY THE AO TO THE ASSESSEE AT WRONG ADDRESS I.E. B-2/226 PASCHIM VIHA R, NEW DELHI-63, IT WAS NEVER SERVED UPON THE ASSESSEE. THEREFORE TH E CONSEQUENT ITA NO.3652-53/DEL/2013 7 REASSESSMENT PROCEEDINGS ARE NULL AND VOID AB INITI O AND WERE RIGHTLY QUASHED BY THE LD. CIT(A). WE, THEREFORE, DO NOT SE E ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 9. AS REGARDS TO THE ITA NO. 3652/DEL/2013 RELATING T O THE CANCELLATION TO THE PENALTY LEVIED BY THE AO U/S 27 1(1)(C) OF THE ACT IS CONCERNED, WE ARE OF THE VIEW THAT THE SAID PENA LTY WAS RIGHTLY DELETED BECAUSE IT WAS BASED ON THE REASSESSMENT O RDER PASSED U/S 143 READ WITH SECTION 147 OF THE ACT DATED 8.12.201 0 WHICH HAS BEEN QUASHED. ACCORDINGLY NO PENALTY U/S 271(1)(C) OF TH E ACT WAS LEVIABLE AND THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE SAME. IN THE RESULT APPEALS OF THE ASSESSES ARE ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 13/08/201 5). SD/- SD/- (H.S.SIDHU) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13 /08/2015 *B.RUKHAIYAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO.3652-53/DEL/2013 8 DATE INITIAL 1. DRAFT DICTATED ON 11/08/2015 PS 2. DRAFT PLACED BEFORE AUTHOR 12/08/2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.