ITO, New Delhi V. M/s. NVS Builders Pvt. Ltd., New Delhi

ITA 3729/DEL/2012

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3308 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 22-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 19-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Keywords: Period of limitation; Reason to believe
• Section: 143(3); 68; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA.NO.3729/DEL./2012 ASSESSMENT YEAR 2006-2007 THE INCOME TAX OFFICER, WARD-13(1), ROOM NO.219, C.R. BUILDING, NEW DELHI. VS M/S. NVS BUILDERS PVT. LTD., 436-SFS, SHEIKH SARAI, POCKET-C, PHASE-1, NEW DELHI. PAN AACCN0661P (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI S.R. SENAPATI, SR. DR FOR ASSESSEE : SHRI SOMIL AGGARWAL AND SHRI DEEPESH GARG, ADVOCATES DATE OF HEARING : 0 8 .03.2018 DATE OF PRONOUNCEMENT : 08. 03.2018 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-XVI, NEW DELHI, DATED 16 TH MARCH, 2012, FOR THE A.Y. 2006-2007. 2 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT RETURN OF INCOME IN THIS CASE WAS FILED BY THE ASSESSEE-COMPANY ON 2 0.11.2006 DECLARING INCOME AT RS.-NIL-. THEREAFTER, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED ON 23 RD OCTOBER, 2007. ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AT AN INCOME OF RS.6 3 LAKHS BY ITO, WARD-13(1), NEW DELHI, ON 30 TH DECEMBER, 2008, WHEREIN ADDITION OF RS.63 LAKHS WAS MADE UNDER SECTION 68 O F THE I.T. ACT, ON ACCOUNT OF AMOUNT RECEIVED BY ASSESSEE FROM ONE SHRI JAGMOHAN SHARMA WHICH WAS CONSIDERED BY THE A.O. AS UNEXPLAINED. THE ASSESSEE FILED APPEAL BEFORE THE L D. CIT(A) WHICH WERE DISMISSED. THEREAFTER, ASSESSEE FILED AP PEAL BEFORE ITAT AND THE TRIBUNAL RESTORED THE MATTER TO THE FI LE OF LD. CIT(A). 2.1. IN VIEW OF THESE FACTS, THE MATTER WAS TAKEN- UP FOR HEARING. THE ASSESSEE CHALLENGED THE ADDITION OF RS .63 LAKHS AS WELL AS SERVICE OF NOTICE UNDER SECTION 143(2) BEYO ND THE PERIOD OF LIMITATION AND CLAIMED THAT ENTIRE ASSESSMENT OR DER IS NULL 3 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. AND VOID. THE ASSESSEE FILED WRITTEN SUBMISSIONS BE FORE THE LD. CIT(A) IN WHICH IT WAS CLAIMED THAT A.O. PASSED THE ORDER WITHOUT SERVING MANDATORY FIRST NOTICE UNDER SECTIO N 143(2) OF THE I.T. ACT, BY THE A.O. HAVING JURISDICTION OVER THE CASE OF THE ASSESSEE. IT WAS SUBMITTED THAT NO NOTICE UNDER SEC TION 143(2) WAS ISSUED AND SERVED BY JURISDICTIONAL A.O. WHO WA S HAVING JURISDICTION OVER THE CASE OF THE ASSESSEE. THEREFO RE, ASSESSMENT ORDER IS NULL AND VOID. 2.2. THE ASSESSEE FILED RETURN OF INCOME ON 20 TH NOVEMBER, 2006 DECLARING NIL INCOME WITH ITO, WARD- 10(1), NEW DELHI. THE ASSESSEE IS REGULARLY ASSESSED AT DE LHI. THE RETURN FOR EARLIER YEARS AS WELL AS SUCCEEDING YEAR S HAVE BEEN FILED AT DELHI WITH THE A.O. HAVING JURISDICTION OV ER THE CASE OF THE ASSESSEE. THE NOTICE UNDER SECTION 143(2) COULD BE ISSUED BY JURISDICTIONAL A.O. ONLY WITHIN THE TIME PRESCRI BED UNDER THE LAW I.E., ITO AT NEW DELHI. 2.3. IN THIS CASE, THE FIRST NOTICE UNDER SECTION 143(2) DATED 23 RD OCTOBER, 2007 WAS ISSUED BY ITO, WARD-1(1), 4 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. FARIDABAD, WHO WAS NOT THE A.O. OF THE ASSESSEE-COM PANY AND HAVE NO JURISDICTION OVER THE CASE OF THE ASSESSEE. COPY OF THE SAID NOTICE WAS FILED. THE ASSESSEE ON RECEIPT OF T HIS NOTICE FROM ITO, WARD-1-(1), FARIDABAD, INFORMED HIM THAT ASSES SEE- COMPANY FILED RETURN OF INCOME AT DELHI. THEN THE I TO, WARD- 1(1), FARIDABAD, TRANSFERRED THE FILE TO ITO, WARD- 10(1), NEW DELHI, WHO WAS HAVING JURISDICTION OVER THE CASE OF THE ASSESSEE. THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED BY IT O, WARD- 13(1), NEW DELHI, WHO ISSUED THE NOTICE UNDER SECTI ON 143(2) ON 28 TH JULY, 2008, WHICH WAS BEYOND THE STATUTORY PERIOD. THEREFORE, HE DID NOT GET ANY VALID JURISDICTION TO FRAME THE ASSESSMENT AGAINST THE ASSESSEE BECAUSE IT WAS ISSU ED AFTER MORE THAN 19 MONTHS AFTER THE EXPIRY OF THE STATUTO RY PERIOD. THE ASSESSEE RELIED UPON SEVERAL DECISIONS IN SUPPO RT OF ITS CONTENTION THAT WHEN NOTICE UNDER SECTION 143(2) HA VE NOT BEEN ISSUED BY THE JURISDICTIONAL A.O. WITHIN THE STATUT ORY PERIOD, THE ASSESSMENT ORDER WOULD BE NULL AND VOID. IN THIS CA SE, NOTICE UNDER SECTION 143(2) HAVE BEEN ISSUED BY JURISDICTI ONAL A.O. 5 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. AFTER THE STATUTORY PERIOD. THEREFORE, THE ENTIRE A SSESSMENT ORDER IS NULL AND VOID. 2.4. THE LD. CIT(A) CONSIDERING THE EXPLANATION OF ASSESSEE, DECIDED THE ISSUE IN FAVOUR OF THE ASSESS EE BY HOLDING THAT ASSESSMENT ORDER IS NULL AND VOID. HIS FINDING S IN PARA 3.2 OF THE ORDER ARE REPRODUCED AS UNDER : 3.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND HAVE ALSO PERUSED THE RECORD. THE FIR ST AND ONLY NOTICE U/S 143 (2) WHICH WAS ISSUED WITHIN ONE YEAR OF FILING THE RETURN, WAS ISSUED ON 23/10/2007 BY T HE 1TO, WARD 1(1), FARIDABAD, WHO WAS NOT HAVING JURISDICTI ON OVER THE CASE OF THE APPELLANT. AS PER THE PROVISIONS OF SECTION 143(2) APPLICABLE FOR THE A.Y. UNDER APPEAL:- WHERE A RETURN HAS BEEN FURNISHED UNDER SECTION 139 , OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTI ON 142, THE ASSESSING OFFICER SHALL , (I) WHERE HE HAS REASON TO BELIEVE THAT ANY CLAIM OF LO SS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN T HE RETURN IS INADMISSIBLE, SERVE ON THE ASSESSEE A NOTICE SPE CIFYING 6 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. PARTICULARS OF SUCH CLAIM OF LOSS, EXEMPTION, DEDUC TION, ALLOWANCE OR RELIEF AND REQUIRE HIM, ON A DATE TO B E SPECIFIED THEREIN TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EV IDENCE OR PARTICULARS SPECIFIED THEREIN OR ON WHICH THE ASSES SEE MAY RELY, IN SUPPORT OF SUCH CLAIM : [PROVIDED THAT NO NOTICE UNDER THIS CLAUSE SHALL BE SERVED ON THE ASSESSEE ON OR AFTER THE 1ST DAY OF JUNE, 2003; ] (II) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (I), I F HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER-PAID THE TAX IN ANY MANNER, S ERVE ON THE ASSESSEE A NOTICE REQUIRING HIM, ON A DATE TO BE SP ECIFIED THEREIN, EITHER TO ATTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPP ORT OF THE RETURN: [PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF TWELVE MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED.] THUS, FROM THE ABOVE PROVISIONS OF LAW IT IS CLEAR THAT STATUTORY NOTICE U/S 143(2) WAS TO BE ISSUED BY THE ASSESSING OFFICER WHO HAD JURISDICTION OVER THE CAS E OF THE 7 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. APPELLANT, AND BY ISSUANCE OF NOTICE U/S 143(2) WIT HIN THE STATUTORY PERIOD AS PROVIDED IN THE SECTION, THE AS SESSING OFFICER HAVING JURISDICTION OVER THE CASE OF AN ASS ESSEE ASSUMES JURISDICTION TO ASSESS THE INCOME OF THE AS SESSEE UNDER HIS / HER JURISDICTION. IN THE CASE OF THE APPELLANT COMPANY, THE FIRST NOT ICE U/S 143(2) WAS ISSUED BY 1TO WARD 1(1), FARIDABAD, ON 23.10.2007 TO ATTEND ON 28 TH NOVEMBER, 2007. NO RETURN OF INCOME WAS FILED BY THE APPELLANT WITH ITO, WARD 1(1), FARIDABAD. SINCE THE APPELLANT COMPANY WAS BEING ASSESSED TO TAX AT DELHI, AND HAD FILED ITS RETURNS OF INCOME IN DELHI, AS SUCH VIDE REPLY SUBMITTED DATED 29.11.2007, AR OF THE APPELLANT INFORMED THE ITO, W ARD 1(1), FARIDABAD, THAT THEY HAD FILED THE RETURN FOR AY 2006-07 VIDE RECEIPT NO. 90099599 DATED 20 TH NOVEMBER, 2006 AT COMPANY WARD 10(1), NEW DELHI, AND ENCLOSED A COPY OF ACKNOWLEDGEMENT OF THE SAME WITH THE REPLY SUBMITTED. APPELLANT HAS SUBMITTED BEFORE ME A COPY OF ORDER SHEET ENTRY WHICH SHOWS THAT FIRST NOTICE BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE CASE OF THE APPELLANT WAS ISSUED ONLY ON 28.7.2008 I.E. MUCH AF TER THE STATUTORY PERIOD PROVIDED BY THE STATUTE. THUS, THE NOTICE ISSUED ON 28.7.2008, DID NOT EMPOWER THE AO WARD 13(1), NEW DELHI TO ASSUME JURISDICTION TO FRAME AN Y 8 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. ASSESSMENT U/S 143(3) OF THE ACT, SINCE THE STATUTO RY NOTICE WAS ISSUED BY HIM MUCH AFTER THE LIMITATION PROVIDED AS PER STATUTE AND THE FIRST NOTICE DATED 23.10.2007 WAS ISSUED BY AN AO WHO WAS NOT HAVING ANY JURISDICTION OVER THE CASE OF THE APPELLANT COM PANY. I ACCORDINGLY HOLD THAT THE ASSESSMENT MADE BY THE I.T.O., WARD - 13 (1), NEW DELHI, ON THE BASIS OF N OTICE ISSUED BY ITO, WARD 1(1), FARIDABAD IS VOID BECAUSE IT IS SETTLED LAW THAT ASSUMPTION OF JURISDICTION AS PER LAW IS SINE QUA NON. IN VIEW OF THE AFORESAID DISCUSSION, JURISDICTION TO MAKE ASSESSMENT AND TO MAKE VARIATI ON IN THE RETURN FILED BY THE APPELLANT HAS NOT BEEN ASSU MED BY THE AO AS PER LAW. AS A RESULT, THE CONSEQUENT ASSESSMENT FRAMED U/S 143(3) IS ALSO BAD IN LAW AND DESERVES TO BE QUASHED. TO ARRIVE AT THE ABOVE CONC LUSION, 1 HAVE NO REASON TO DISAGREE WITH THE VIEWS EXPRESS ED BY THE HONBLE JURISDICTIONAL HIGH COURT, AND VARIOUS OTHER COURTS AND HONBLE TRIBUNAL, AS RELIED UPON BY THE AR IN THE WRITTEN SUBMISSIONS PLACED BEFORE ME. IN VIEW OF MY ABOVE OBSERVATIONS, GROUND NO.2 IS DECIDED IN FAVOUR OF THE APPELLANT AND THE ASSESSME NT FRAMED IS HELD TO BE VOID. 9 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. 2.5. THE LD. CIT(A) ALSO DELETED THE ADDITION OF R S.63 LAKHS ON MERIT. 3. THE LD. D.R. ON THE OTHER HAND, CONTENDED THAT THE A.O, WARD-1(1), FARIDABAD HAS CORRECTLY ISSUED NOTI CE UNDER SECTION 143(2) WHICH WERE BASED ON PAN ISSUED IN TH IS CASE. HE HAS SUBMITTED THAT CASE WAS SELECTED THROUGH COMPUT ER OF THE DEPARTMENT AS PER THE PRACTICE. THEREFORE, THERE IS NO ERROR IN THE NOTICE ISSUED UNDER SECTION 143(2) OF THE I.T. ACT, ON 23 RD OCTOBER, 2007. 4. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT RETURN OF INCOME HAS BEEN FILED ON 20 TH NOVEMBER, 2006 WITH ITO AT NEW DELHI HAVING JURISDI CTION OVER THE CASE OF THE ASSESSEE. THE LD. D.R. ALSO BROUGHT ON RECORD SAME WHICH SUPPORT THE CLAIM OF THE ASSESSEE THAT A SSESSEE FILED THE ORIGINAL RETURN OF INCOME AT DELHI. THE RECORD ALSO REVEAL THAT EVEN FOR EARLIER AND SUBSEQUENT YEARS, THE ASS ESSEE FILED 10 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. RETURN OF INCOME AT DELHI. THE ASSESSMENT IN THE PR ESENT CASE HAS BEEN FRAMED BY ITO, WARD-13(1), NEW DELHI, HAVI NG JURISDICTION OVER THE CASE OF THE ASSESSEE. THE ITO , WARD-1(1), FARIDABAD ISSUED NOTICE UNDER SECTION 143(2) ON 23 RD OCTOBER, 2007, WHO WAS HAVING NO JURISDICTION OVER THE CASE OF THE ASSESSEE. THE ITO AT DELHI ISSUED NOTICE UNDER SECT ION 143(2) ON 28 TH JULY, 2008 WHICH WAS BEYOND THE PERIOD PRESCRIBED UNDER THE LAW. IT IS, THEREFORE, CLEAR THAT THE A.O . HAVING JURISDICTION OVER THE CASE OF THE ASSESSEE DID NOT ISSUE NOTICE UNDER SECTION 143(2) UPON THE ASSESSEE WITHIN THE P ERIOD OF LIMITATION PROVIDED UNDER THE ACT. THEREFORE, THE F IRST NOTICE ISSUED BY ITO, WARD-1(1), FARIDABAD, HAVING NO JURI SDICTION OVER THE CASE OF THE ASSESSEE WOULD NOT BE VALID AN D WOULD NOT GET ANY JURISDICTION OVER THE CASE OF THE ASSESSEE. THE CONTENTION OF THE LD. D.R. HAS NO MERIT THAT ITO, W ARD-1(1), FARIDABAD WAS EMPOWERED TO ISSUE NOTICE AS PER PAN OR IT WAS ISSUED AS PER COMPUTERIZED SYSTEM OF THE DEPARTMENT BECAUSE IT IS AGAINST THE PROVISIONS OF LAW. AS SUCH THE IS SUE WOULD BE IN VIOLATION OF THE PRINCIPLES OF LAW AND AS SUCH T HE INTERNAL 11 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. PROCEDURE PROVIDED BY THE DEPARTMENT WOULD NOT JUST IFY THE ILLEGALITY COMMITTED BY THE ITO, WARD-1(1), FARIDAB AD. THE ENTIRE ASSESSMENT PROCEEDINGS ARE VITIATED BECAUSE OF NON- SERVICE OF JURISDICTIONAL NOTICE UNDER SECTION 143( 2) WITHIN THE PERIOD OF LIMITATION BY THE A.O. HAVING JURISDICTIO N OVER THE CASE OF THE ASSESSEE. NO INFIRMITY HAVE BEEN POINTED OUT IN THE ORDER OF THE LD. CIT(A) IN HOLDING THE ASSESSMENT ORDER T O BE NULL AND VOID. WE CONFIRM THE FINDING OF FACT RECORDED BY TH E LD. CIT(A) AND DISMISS THIS GROUND OF APPEAL OF REVENUE. SINCE THE ENTIRE ASSESSMENT ORDER IS DECLARED AS NULL AND VOID, THER E IS NO NEED TO DECIDE THE ISSUE ON MERIT WHICH IS LEFT WITH ACA DEMIC DISCUSSION ONLY. THE DEPARTMENTAL APPEAL FAILS AND IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (WASEEM AHMED) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 08 TH MARCH, 2018 VBP/- 12 ITA.NO.3729/DEL./2012 M/S. NVS BUILDERS PVT. LTD., NEW DELHI. COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT E BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.