Sri Bhagirathi Sethy, Keonjhar V. ITO, Keonjhar Ward , Keonjhar

ITA 378/CTK/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1539 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 19-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K LENKA
• Assessee Lawyers: K R MOHAPATRA
• Keywords: Unexplained expenditure; Opportunity of being heard; Principle of natural justice; Period of limitation; Source of fund; Procedural lapse; Set aside
• Section: 143(2)

Judgement Text

P A G E 1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO . 378 /CTK/201 9 ASSESSMENT YEAR : 2010 - 2011 SRI BHAGIRATHI SETHI, AT/PO: FAKIRPUR, DIST: KEONJHAR - 758022 VS. ITO, KEONJHAR WARD, KEONJHAR PAN/GIR NO. CIOPS 1403 H (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI K.R.MOHAPATRA , AR REVENUE BY : SHRI J.K.LENKA , DR DATE OF HEARING : 19 / 1 0 / 20 20 DATE OF PRONOUNCEMENT : 14 / 1 2 /20 20 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), SAMBALPUR DATED 27.9.2019 FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: 1. FOR THAT THE ORDER OF ASSESSMENT AS WELL AS THE ORDER OF APPEAL HAS NEITHER BEEN BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE NOR ON POINTS OF LAW AND IS LIABLE TO BE SET ASIDE. 2. FOR THAT THE AO WITHOUT SERVING ANY NOTICE UNDER SECTION 143(2) HAS PASSED THE ORDER OF ASSESSMENT U/S.144 OF THE I.T.A CT, AND THE LD CIT(A) IN FURTHERANCE OF SUCH ILLEGIBILITY HAS CONFIRMED THE SAME WHICH IS ILLEGAL, ARBITRARY AND NOT MAINTAINABLE. 3. FOR THAT, ID. CIT (APPEAL) WHILE HEARING THE APPEAL, THOUGH CONVINCED THE SUBMISSIONS AND EVIDENCE ADDUCED BY THE APPELL ANT ON MERIT OF THE CASE HAS ALLOWED THE AGRICULTURAL INCOME SHOWN BY THE ITA NO.378/CTK/2019 ASSESSMENT YEAR : 2010 - 2011 P A G E 2 | 6 APPELLANT AS THE SOURCES OF INCOME WHICH CONSIDERED AS APPLICATION TOWARDS ELECTION EXPENDITURE TO THE EXTENT OF RS.4,50,0007 - , BUT DISALLOWED THE BALANCE EXPENDITURE OF RS. 1,74,000 / - AS HAS BEEN CONTRIBUTED BY THE CLOSE RELATIVES OF THE ASSESSEE AND CONFIRMING THE ADDITION UNDER 'UNEXPLAINED EXPENDITURE' WITHOUT CALLING FOR ANY FURTHER DOCUMENTS/EVIDENCE IN SUPPORT OF THE CONTENTION IS ILLEGAL AND NOT SUSTAINABLE IN LAW. 4. FOR T HAT, WITHOUT PREJUDICE TO THE GROUNDS STATED IN PARA.1 & 2 ABOVE, THE LD. AO HAS ERRED UNDER FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THAT WITHOUT CONSIDERING THE SUBMISSION ADVANCED BY THE APPELLANT, DISALLOWANCE OF THE CLAIM OF AGRICULTURAL INCOME TO THE TUNE OF RS.4,50,000/ - IN THE INSTANT CASE IS UNWARRANTED AND FURTHER CONFIRMATION OF THE SAME BY ID. CIT(A) IS UNCALLED FOR AND LIABLE TO BE SET ASIDE. 5. FOR THAT PERSONAL HEARING IN THE MATTER OF HAS NOT BEEN EXTENDED BEFORE DISPOSING OF THE AP PELLANT CASE, THEREBY APPELLANT HAVE BEEN DEPRIVED FROM THE REASONABLE OPPORTUNITY OF BEING HEARD AND DEPRIVED FROM THE BENEFIT OF NATURAL JUSTICE AND THE ORDER OF CIT (A) IS LIABLE TO BE SET ASIDE. 3. LD A.R. OF THE ASSESSEE PRESSED ONLY GROUND NO.2 OF THE ASSESSEE, WHICH IS A JURISDICTIONAL ISSUE FOR ADJUDICATION. LD D.R. DID NOT HAVE NO OBJECTION. HENCE, I PROCEED TO ADJUDICATE GROUND NO.2 OF THE ASSESSEE. 4. LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT U/S.144 OF THE ACT WITHOUT SERVING THE STATUTORY NOTICE U/S.143(2) OF THE ACT WITHIN THE PRESCRIBED PERIOD OF LIMITATION AS WELL AS WITHOUT AFFORDING REASONABLE OPPORTU NITY OF HEARING IN THE MATTER. THEREFORE, THE ASSESSMENT ORDER PASSED BY THE AO IS NOT MAINTAINABLE. HE SUBMITTED THAT THE ASSESSES FILED HIS RETURN OF INCOME STATING THE ADDRESS AS FAKIRPUR, KEONJHAR, ODISHA AND THE AO HAS ALSO PASSED THE ASSESSMENT OR DER DATED 27.9.2019 U/S.144 OF THE ACT EXPARTE QUA ASSESSEE STATING THE ITA NO.378/CTK/2019 ASSESSMENT YEAR : 2010 - 2011 P A G E 3 | 6 SAME AND SIMILAR ADDRESS. LD A .R. DREW OUR ATTENTION TOWARDS COPY OF DAK BOOK SUBMITTED BY SR. DR THAT THE AO HAS ISSUED NOTICE U/S.143(2) OF THE ACT TO THE ASSESSEE AT THE ADDRESS - NEW MARKET, KEONJHAR ON A DISTINCT AND DIFFERENT ADDRESS AND HENCE, THE STATUTORY NOTICE U/S.143(2) HAS NOT BEEN ISSUED IN THE RIGHT ADDRESS GIVEN BY THE ASSESSEE AND CONSEQUENTLY, IT HAD NOT BEEN SERVED ON THE ASSESSEE . LD COUNSEL ALSO SUBMITTED THAT THE RE IS NO EVIDENCE BY THE DEPARTMENT REGARDING SERVICE OF NOTICE U/S.143(2) ON THE ASSESSEE AND, THEREFORE, IN VIEW OF THE DECISION S OF HONBLE SUPREME COURT IN THE CASE ACIT VS HOTEL BLUE MOON, 321 ITR 362 (SC), CIT VS LAXMAN DAS KHANDELWAL, 417 ITR 325 (SC), HONBLE BOMBAY HIIGH COURT IN THE CASE OF ACIT VS. GENO PHARMACEUTICALS LTD., 32 TAXMANN.COM 162 (BOM,) AND IN THE CASE OF CIT VS ABACUS DISTRIBUTION SYSTEMS (INDIA ) LTD., 78 TAXMANN.COM 321 (BOM), THE IMPUGNED ASSESSMENT ORDER PASSED U/S.144 OF THE ACT WITHOUT SERVING THE STATUTORY NOTICE U/S.143(2) IS LIABLE TO QUASHED. LD COUNSEL FURTHER DRAWING OUR ATTENTION TOWARDS THE ORDER OF THE LD CIT(A) WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE ON MERITS SUBMITTED THAT , THE LD CIT(A) SKIPPED THE JURISD ICTIONAL GROUND THAT THE AO HAS NOT ISSUED NOTICE U/S.143(2) OF THE ACT IN THE PROPER ADDRESS BEFORE PASSING THE ASSESSMENT ORDER AND HENCE, THE ASSESSMENT ORDER IS NOT MAINTAINABLE. LD COUNSEL VEHEMENTLY POINTED OUT THAT THE ORDER OF THE LD CIT(A) IS SIL ENT ON THE LEGAL POINT OF VIEW . THEREFORE, THE IMPUGNED ASSESSMENT ORDER MAY ITA NO.378/CTK/2019 ASSESSMENT YEAR : 2010 - 2011 P A G E 4 | 6 KINDLY BE QUASHED BEING PASSED WITHOUT VALID JURISDICTION BY THE AO BY ISSUING NOTICE U/S.143(2) OF THE ACT AND SERVING ON THE SAME. 5. REPLYING TO ABOVE, LD DR SUBMITTED THAT WH EN THE NOTICE HAS BEEN ISSUED TO THE ASSESSEE BY RPAD AND THE DEPARTMENT HAS SUBMITTED THE DETAILS OF ADDRESS SERVING THE NOTICE THEN IT HAS TO BE PRESUMED THAT NOTICE HAS BEEN PROPERLY ISSUED AND SERVED ON THE ASSESSEE. HENCE, THE LEGAL GROUND OF THE ASS ESSEE HAS NO LEGS TO STAND. 6. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, UNDISPUTEDLY, FROM THE COPY OF THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 2011 FILED AT APB, IT IS CLEAR THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME STATING THE ADDRESS AS : SHRI BHAGIRATHI SETHY, S/O. SHRI POKA SETHY, AT/PO: FAKIRPUR, KEONJHAR, PIN - 758022 AND THE AO HAS PASSED THE ASSESSMENT ORDER STATING THE SAME ADDRESS U/S.144 OF THE ACT EXPARTE QUA - ASSESSEE. 7. FROM THE COPY OF DAK BOOK SUBMITTED BY THE LD D.R. IT IS AMPLE CLEAR THAT NOTICE HAS BEEN ISSUED TO THE ASSESSEE BY STATING THE ADDRESS AS NEW MA R K ET, KEONJHAR, WHICH IS NOT A PROPER ADDRESS OF THE ASSESSEE . IN VIEW OF ABOVE, I SAFELY PRESUME THAT WHEN THE NOTICE HAS BEEN ISSUED ON A WRONG ADDRESS AND EVEN IF THE DISPUTE REGARDING ADDRESS IS IGNORED THEN ALSO THERE IS NO PROOF OF SERVICE OF NOTICE B EFORE THIS BENCH ON THE BASIS OF WHICH, I CAN SAFELY PRESUME THAT THE NOTICE U/S.143(2) OF THE ACT HAS BEEN SERVED ITA NO.378/CTK/2019 ASSESSMENT YEAR : 2010 - 2011 P A G E 5 | 6 ON THE ASSESSEE. I FIND THAT HONBLE SUPREME COURT IN THE CASE OF BLUE MOON (SUPRA) HAS HELD THAT OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE U/S.143(2) CANNOT BE PROCEDURAL IRREGULARITY AND IS NOT CURABLE. THEREFORE, THE REQUIREMENT OF NOTICE U/S.143 (2) CANNOT BE DISPENSED WITH. CONSEQUENTLY, I FIND THAT IN ABSENCE OF ANY VALID NOTICE U/S.143(2) OF THE ACT HAVING BEEN ISSUED IN THE INSTANT CASE, THE IMPUGNED ORDER PASSED U/S.14 4 OF THE ACT CANNOT BE SUSTAINED. ACCORDINGLY, I HEREBY SET ASIDE THE IMPU GNED EXPARTE ORDER PASSED U/S.14 4 OF THE ACT BY THE AO AND ALLOW THE GROUND NO.2 OF APPEAL OF THE ASSESSEE. 8 . IN VIEW OF MY ABOVE DECISION, OTHER GROUNDS OF APPEAL OF THE ASSESSEE HA VE BECOME INFRUCTUOUS AND, ACCORDINGLY, SAME ARE NOT ADJUDICATED UPON SEPARATELY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 14 /1 2 /20 20 . S D/ - ( CHANDRA MOHAN GARG) JUDICIAL MEMBER CUTTACK; DATED 14 / 1 2 /20 20 B.K.PARIDA, SPS (OS) ITA NO.378/CTK/2019 ASSESSMENT YEAR : 2010 - 2011 P A G E 6 | 6 COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : SRI BHAGIRATHI SETHI, AT/PO: FAKIRPUR, DIST: KEONJHAR - 758022 2. THE RESPONDENT. ITO, KEONJHAR WARD, KEONJHAR 3. THE CIT(A) , SAMBALPUR 4. PR.CIT , CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//