UDS Offsets Pvt. Ltd., Faridabad V. ITO, New Delhi

ITA 3771/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6382 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 27-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBINA CHAUDHURI
• Assessee Lawyers: S K BANSAL
• Keywords: Validity of assessment; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 3771/DEL/2016 A.Y. : 2006-07 M/S UDS OFFSETS PVT.LTD., PLOT NO. 3, TCC COMPLEX, SECTOR-6, FARIDABAD HARYANA (PAN:AAACU0935B) VS. ITO, WARD 27(2), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. BANSAL, CA DEPARTMENT BY : MS. BEDOBINA CHAUDHURI, SR. DR ORDER THE APPEAL FILED BY THE ASSESSEE EMANATE OUT OF TH E ORDER DATED 05.05.2016 PASSED BY THE LD. CIT(A)-22, NEW DELHI RELEVANT TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. THAT THE ORDER OF LD. CIT(A)-22, NEW DELHI IS BA D IN LAW AND ON FACTS. 2. THAT THE LD. CIT(A)-22, ERRED IN LAW AND ON FACT S IN CONFIRMING THE VALIDITY OF ASSESSMENT MADE BY THE ITO, WARD 28(2), NEW DELHI WITHOUT SERVICE OF A VALID NOTICE UNDER SECTION 148 BY HIM. 3. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIONS MADE OF RS. 5,58,076/- ON ACCOUNT OF PURCHASES MADE FROM HIMANSHI ENTERPRISES CONSIDERING THE SAME AS BOGUS. 4. THAT THE LD. CIT(A) WAS NOT JUSTIFIED BOTH IN LA W AND ON FACTS IN USING THE ALLEGED STATEMENT OF THE PROPRIETOR OF HIMANSHI ENTERPRISES AGAINST THE APPELLANT. 2 5. THAT THE APPELLANT PRAYS FOR GRANT OF PERMISSION TO ADD, ALTER, MODIFY OR SUBSTITUTE ANY OR ALL OF THE GROUNDS OF APPEAL. PRAYER:- IT IS PRAYED THAT THE ADDITIONS CONFIRMED BY THE LD . CIT(A) AMOUNTING TO RS. 5,58,076/- ON ACCOUNT OF PURCHASES MADE FROM HIMANSHI ENTERPRISES MAY KIND LY BE DELETED IN THE INTEREST OF JUSTICE AND FAIR PLAY . FURTHER, THE ASSESSMENT MADE WITHOUT VALID SERVICE OF NOTICE BY THE JURISDICTIONAL INCOME TAX OFFICER, WA RD 18(2), NEW DELHI BE QUASHED. 3. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF I NCOME FOR THE AY 2006-07 WAS FILED ON 30.11.2006, DECLARING INCOME A T RS. NIL. NOTICE U/S.148 DATED 12.3.2013 WAS ISSUED. NOTICES U/S. 14 3(2) DATED 15.10.2013 AND 5.12.2013 WERE ISSUED. IN RESPONSE T O THE SAME, THE AR OF THE ASSESSEE ATTENDED THE HEARING FROM TIME TO T IME. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING AND M ANUFACTURING OF OFFSET PRINTING MACHINE. THE ASSESSEE RAISED AN O BJECTION OF VALIDATION OF NOTICE ISSUED U/S. 148 INTER ALIA ON THE GROUND THAT THE AO WHO HAS ISSUED THE NOTICE U/S.148 WAS NOT HAVING JURISDICTI ON OVER THE ASSESSEE. THE AO WHO HAS COMPLETED THE REASSESSMENT DID NOT ACCEPT THE CONTENTION AND OBJECTION OF THE ASSESSEE AND COMPLE TED THE REASSESSMENT VIDE ORDER DATED 28.2.2014 PASSED U/S.143(3)/148 OF THE I.T. ACT. ON APPEAL, THE LD. CIT(A) THOUGH REJECTED THE OBJECTIO N RAISED BY THE ASSESSEE ON THE VALIDITY OF THE NOTICE ISSUED U/S.1 48 OF THE ACT AND CONFIRMED THE ADDITION BY PARTLY ALLOWING THE APPEA L OF THE ASSESSEE VIDE HIS ORDER DATED 5.5.2016. 4. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 5. AT THE TIME OF HEARING, LD. COUNSEL HAS STATED T HAT THE ASSESSEE HAD ITS REGISTERED OFFICE IN NEW DELHI SINCE THE DA TE OF ITS INCORPORATION. HE FURTHER STATED THAT ASSESSEE HAD BEEN FILING ITS ITR AT NEW DELHI RIGHT SINCE THE DATE OF ITS INCORPORATION AND ITR FOR AY UNDER APPEAL WAS FILED ON 30.11.2006 AND PAN DETAILS SINCE ITS INCORPORATI ON ALSO LIES WITH THE DELHI INCOME TAX AUTHORITIES. BUT BASED ON INFORMAT ION RECEIVED FROM THE ADIT, FARIDABAD, THE AO, WARD 1(1), FARIDABAD WHO D ID NOT HAD ANY JURISDICTION OVER THE ASSESSEE ISSUED NOTICE U/S. 1 48 OF THE ACT AND ALSO ISSUED NOTICE U/S. 142(1). THE ASSESSEE INFORMED T HE AO ABOUT ITS JURISDICTION TO BE ASSESSED AT DELHI AND REQUESTED FOR TRANSFER OF RECORDS AT DELHI AND ACCORDINGLY, HE TRANSFERRED THE CASE. ACCORDINGLY, THE NOTICE U/S.142(1) AND 143(2) WAS ISSUED BY THE JURISDICTIO NAL AO WARD 18(2), NEW DELHI FOR THE FIRST TIME ON 15.10.2013 AND NO N OTICE U/S. 148 WAS EVER ISSUED BY THE JURISDICTIONAL AO. HENCE, HE ST ATED THAT LD. CIT(A)S ACTION OF CONFIRMING THE VALIDITY OF ASSESSMENT MA DE BY THE ITO, WARD 28(2), NEW DELHI WITHOUT SERVICE OF VALID NOTICE UN DER SECTION 148 SHOULD BE QUASHED. IN SUPPORT OF THIS CONTENTION HE STATED THAT THE ISSUE OF JURISDICTION WHICH IS IN DISPUTE IS SQUARELY COVER ED BY THE ITAT, MUMBAI DECISION DATED 7.9.2012 PASSED IN INDORAMA SOFTWARE SOLUTIONS VS. ITO PASSED IN ITA NO. 5290/M/2011 (2003-004) & OTHER. 6. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY THE REVENUE AUTHORITIES. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED T HE RELEVANT RECORDS ESPECIALLY THE ORDER PASSED BY THE REVENUE AUTHOR ITIES. I FIND CONSIDERABLE COGENCY IN THE ASSESSEES COUNSEL SUBM ISSIONS THAT THE REASSESSMENT ORDER DATED 28.2.2014 PASSED BY THE AO IS WITHOUT JURISDICTION AND IS LIABLE TO BE QUASHED BECAUSE T HE JURISDICTIONAL AO HAS NOT ISSUED AND SERVED ANY NOTICE U/S. 148 OF THE AC T. THEREFORE, THE ASSESSMENT PROCEEDINGS INITIATED ARE ILLEGAL, UNSUS TAINABLE AND UNTENABLE UNDER THE LAW. FROM THE RECORDS, I NOTE THAT AS SESSEE HAD ITS REGISTERED OFFICE IN NEW DELHI SINCE THE DATE OF IT S INCORPORATION; FILING ITS ITR AT NEW DELHI RIGHT SINCE THE DATE OF ITS INCORP ORATION AND ITR FOR AY 4 UNDER APPEAL WAS FILED ON 30.11.2006 AND PAN DETAIL S SINCE ITS INCORPORATION ALSO LIES WITH THE DELHI INCOME TAX A UTHORITIES. AND BASED ON INFORMATION RECEIVED FROM THE ADIT, FARIDABAD, T HE AO, WARD 1(1), FARIDABAD WHO DID NOT HAD ANY JURISDICTION OVER THE ASSESSEE ISSUED NOTICE U/S. 148 OF THE ACT AND ALSO ISSUED NOTICE U /S. 142(1). THE ASSESSEE INFORMED THE AO ABOUT ITS JURISDICTION TO BE ASSESSED AT DELHI AND REQUESTED FOR TRANSFER OF RECORDS AT DELHI AND ACCORDINGLY, THE CASE WAS TRANSFERRED. ACCORDINGLY, THE NOTICE U/S.142(1 ) AND 143(2) WAS ISSUED BY THE JURISDICTIONAL AO WARD 18(2), NEW DEL HI FOR THE FIRST TIME ON 15.10.2013 AND NO NOTICE U/S. 148 WAS EVER ISSUED B Y THE JURISDICTIONAL AO. HENCE, THE LD. CIT(A)S ACTION OF CONFIRMING TH E VALIDITY OF ASSESSMENT MADE BY THE ITO, WARD 28(2), NEW DELHI W ITHOUT SERVICE OF VALID NOTICE UNDER SECTION 148 IS NOT SUSTAINABLE I N THE EYES OF LAW AND NEEDS TO BE QUASHED. MY VIEW IS FORTIFIED BY THE I TAT, MUMBAI DECISION DATED 7.9.2012 PASSED IN INDORAMA SOFTWARE SOLUTION S VS. ITO PASSED IN ITA NO. 5290/M/2011 (2003-004) & OTHER WHEREIN IT H AS BEEN HELD AS UNDER:- WHEN IT IS APPARENT THAT THE NOTICE U/S. 148 WAS I SSUED BY THE AO WHO WAS NOT VESTED WITH THE JURISDICTION OVER THE ASSESSEE THEN, THE SAME IS PATIENTLY ILLEGAL AN D VOID. CONSEQUENTLY, THE REASSESSMENT PROCEEDINGS AND ORDE R IN PURSUANT TO THE ILLEGAL NOTICE U/S.148 ARE ALSO VALID AB INITIO AND LIABLE TO BE SET ASIDE. HENCE, WE HOLD T HAT THE REASSESSMENT ON THE BASIS OF AN ILLEGAL NOTICE U/S. 148 IS NOT SUSTAINABLE AND ACCORDINGLY THE SAME IS SET ASIDE. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENT AS AFORESAID, I AM OF THE CONSIDERED VIEW THAT THE JURISDICTIONAL AO HAS NOT ISSUED ANY NOTICE U/ S 148 OF THE I.T. ACT TO THE ASSESSEE, HENCE, THE REASSESSMENT ORDER IN DIS PUTE IS INVALID, VOID ABNITIO AND AGAINST THE PROVISIONS OF THE LAW AND I S NOT SUSTAINABLE IN THE EYES OF LAW AND ACCORDINGLY THE SAME IS SET ASIDE. THEREFORE, THE 5 REASSESSMENT ORDER AS WELL AS THE APPELLATE ORDER S TAND CANCELLED AND APPEAL OF THE ASSESSEE STANDS ALLOWED. 9. SINCE, WE HOLD THAT THE REASSESSMENT AS INVALID AND SET ASIDE, THE OTHER ISSUES ON MERIT HAVE BECOME ACADEMIC AND NEE D NOT BE ADJUDICATED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.03.201 7. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 20/3/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES