ITO, Gurgaon V. Smt Sunita Chauhan, Gurgaon

ITA 3894/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7625 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 16-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 27-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIMA BERNWAL
• Keywords: Additional evidence
• Section: 143(3); 142(1); 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE SHRI R.S. SYAL, AM & MS SUCHITRA KAMBLE, JM ITA NO.3894/DEL/2012 ASSESSMENT YEAR : 2007-08 ITO, WARD 1(1), GURGAON. VS. SUNITA CHAUHAN, VPO BEGAMPUR KHATOLA, C/O YPS RANA, ADVOCATE, OFF NO.205-208, DEEP PLAZA, 1 ST FLOOR, GURGAON. PAN : ACAPC3042Q (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : MS ANIMA BERNWAL, SR. DR DATE OF HEARING : 16.05.2016 DATE OF PRONOUNCEMENT : 16.05.2016 ORDER PER R.S. SYAL, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A) ON 25.4.2012 IN RELATION TO THE ASSES SMENT YEAR 2007-08. ITA NO.3894/DEL/2012 2 2. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVAN T MATERIAL ON RECORD. THERE IS NO APPEARANCE FROM THE SIDE OF TH E ASSESSEE DESPITE SEVERAL NOTICES ISSUED STARTING FROM 21.2.2013. TH E LAST NOTICE ISSUED ON 18.3.2016 FOR TODAY HAS NOT BEEN RETURNED BY THE PO STAL AUTHORITIES AND, AS SUCH, THE SAME IS PRESUMED TO HAVE BEEN SERVED ON T HE ASSESSEE. SINCE THERE IS NO APPEARANCE FROM THE SIDE OF THE ASSESSE E, WE ARE PROCEEDING TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE. 3. FIRST TWO GROUNDS ARE AGAINST THE ANNULLING OF A SSESSMENT MADE U/S 144 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO C ALLED `THE ACT). 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED HER RETURN DECLARING TOTAL INCOME OF RS.3,35,284/- THE CASE WAS SELECTED FOR SCRUTINY BY ISSUING NOTICE U/S 143(2) ON 29.9.2009 FIXING THE DATE OF HEARING ON 14.10.2008. NONE ATTENDED ON BEHALF OF THE ASSESSEE NOR ANY WRITTEN REPLY WAS FILED. ANOTHER NOTICE WAS ISSUED ON 20.11.2008 WHICH AGAIN REMAINED UNCOMPLIED WITH. THERE IS A MENTION ON PAGE 2 OF THE ASSESSMENT ORDER ABOUT VARIOUS OPPORTUNITIES GRANTE D BY THE AO, ONLY SOME OF WHICH WERE AVAILED BY THE ASSESSEE, BUT, WI THOUT FURNISHING ANY ITA NO.3894/DEL/2012 3 DETAILS CALLED FOR BY THE AO. LEFT WITH NO ALTERNA TIVE, THE AO COMPLETED ASSESSMENT U/S 144 BY ADDING A SUM OF RS.48,54,323/ - ON ACCOUNT OF SUNDRY CREDITORS APPEARING IN THE BOOKS OF THE ASSE SSEE; RS.8,20,000/- ON ACCOUNT OF UNSECURED LOANS; RS.1,27,908/- ON ACCOUN T OF DISALLOWANCE OUT OF CERTAIN EXPENSES; AND WITHOUT ALLOWING SET OFF O F LOSS OF RS.1,50,000/- FOR WANT OF NECESSARY DOCUMENTARY EVIDENCE. THIS L ED TO THE MAKING OF ASSESSMENT AT A TOTAL INCOME OF RS.62.87 LAC. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT(A). A REMAND R EPORT WAS CALLED FOR FROM THE AO. CONSIDERING THE MATERIAL FILED BY THE ASSESSEE, REMAND REPORT AND THE REJOINDER FILED BY THE ASSESSEE, THE LD. CIT(A) ANNULLED THE ASSESSMENT ON THE GROUND THAT NOTICE ISSUED U/S 142 (1) DATED 29.9.2009 (SIC. 29.5.2009) WAS ISSUED BY THE AO AT A WRONG AD DRESS. THEREAFTER, HE ALSO DEALT WITH THE ADDITIONS ON MERITS AND GAVE SU BSTANTIAL RELIEFS. 5. THE FIRST ISSUE RAISED BY THE REVENUE IS AGAINST THE ANNULMENT OF ASSESSMENT. IT IS OBSERVED THAT THE LD. CIT(A) DEA LT WITH ISSUANCE OF NOTICE U/S 143(2) AS WELL AS NOTICE U/S 142(1). WH ILE DEALING WITH NOTICE U/S 143(2), HE HELD ON PAGE 21 OF HIS ORDER THAT ON CE THE ASSESSEE HAD PARTICIPATED IN THE ASSESSMENT, IT COULD NOT BE HEL D THAT NOTICE U/S 143(2) ITA NO.3894/DEL/2012 4 WAS IMPROPERLY SERVED. HOWEVER, ON PAGE 18 OF HIS ORDER, HE ANNULLED THE ASSESSMENT BY OBSERVING THAT NOTICE U/S 142(1) WAS ISSUED AT THE WRONG ADDRESS. WE ARE UNABLE TO RECONCILE THE INCONSISTE NT STANDS TAKEN BY THE LD.CIT(A) ON NOTICE U/S 143(2) ON THE ONE HAND AND NOTICE U/S 142(1) ON THE OTHER. ONCE THE POSITION IS ADMITTED THAT THE NOTICE WAS ISSUED AND THE ASSESSEE DID PARTICIPATE IN THE PROCEEDINGS, THEN, IT WAS NOT OPEN TO THE LD. CIT(A) TO ANNUL THE ASSESSMENT BY HOLDING THAT THE SERVICE OF NOTICE U/S 142(1) WAS NOT PROPER. OUR VIEW IS FORTIFIED BY TH E JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. THREE DEE EXIM (P) LTD. (2011) 55 DTR 147 (DEL), IN WHICH IT HAS BEEN HELD THAT WHEN THE ASSESSEE DID NOT RAISE ANY OBJECTION REGARDING NON-SERVICE O F NOTICE AND APPEARED BEFORE THE AO, THEN, IT CANT BE ARGUED THAT THE SE RVICE OF NOTICE EVEN AT THE OLD ADDRESS OF THE ASSESSEE WAS IMPROPER. SIMI LAR VIEW HAS BEEN TAKEN BY THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. VISION INC. (2012) 208 TAXMANN 153 (DEL) , HOLDING THAT WHEN NOTICE U/S 143(2) WAS SERVED UP ON THE ASSESSEES PREMISES PURSUANT TO WHICH THE ASSES SEE PARTICIPATED IN ASSESSMENT PROCEEDINGS, IT COULD NOT BE SAID THAT T HERE WAS NO VALID SERVICE OF NOTICE. ITA NO.3894/DEL/2012 5 6. SECTION 292BB INSERTED BY THE FINANCE ACT, 20 08 W.E.F. 1.4.2008 PROVIDES THAT: WHERE AN ASSESSEE HAS APPEARED IN A NY PROCEEDING OR CO- OPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT O R REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF TH IS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM, HAS BEEN DULY SERVE D UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDI NG OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS (A) NOT SERVED UPON HIM; OR (B) NOT SERVED UPON HIM IN TIME; OR (C) SERVED UPON HIM IN AN IMP ROPER MANNER. THE HONBLE PUNJAB & HARYANA HIGH COURT IN OM SONS INTERNATIONAL VS. CIT (2011) 244 CTR 110 (P&H) , HAS HELD THAT THE PROVISIONS OF SECTION 292BB ARE APPLICABLE TO THE PROCEEDINGS PENDING ON 1 ST APRIL, 2008. THIS SHOWS THAT SECTION 292BB IS APPLICABLE PROSPECTIVEL Y QUA THE PENDENCY OF PROCEEDINGS ON 1.4.2008 AND NOT THE A.Y. 2008-09. SINCE, IN THE INSTANT CASE, THE NOTICE U/S 142(1) WAS ADMITTEDLY ISSUED O N 29.9.2009, WHICH IS AFTER 1.4.2008 AND THE ASSESSEE DID ATTEND THE PRO CEEDINGS, ALBEIT PARTLY, WE HOLD THAT THE VIEW TAKEN BY THE LD. CIT(A) IN AN NULLING THE ASSESSMENT ON THE GROUND THAT NOTICE WAS NOT PROPERLY SERVED, CANNOT BE ITA NO.3894/DEL/2012 6 COUNTENANCED. IT IS NOT A CASE, IN WHICH THE ASSESS EE RAISED ANY OBJECTION BEFORE THE AO ABOUT THE IMPROPER SERVICE OF NOTICE SO AS TO ATTRACT PROVISO TO SECTION 292BB, WHICH PROVIDES THAT : `NOTHING C ONTAINED IN THIS SECTION SHALL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJE CTION BEFORE THE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT. THE SE GROUNDS OF THE REVENUE ARE, THEREFORE, ALLOWED. 7. GROUND NO.3 IS AGAINST THE DELETION OF ADDITION OF RS.48,54,323/-. THIS ADDITION WAS MADE BY THE AO ON ACCOUNT OF ALL THE SUNDRY CREDITORS APPEARING IN THE BOOKS OF THE ASSESSEE BECAUSE NO C ONFIRMATIONS FROM THE CREDITORS WERE FILED. HOWEVER, THE LD. CIT(A) CHOS E TO DELETE THE ADDITION BY NOTICING THAT THERE WERE THREE COMPONENTS OF THI S AMOUNT, NAMELY, BANK OVERDRAFT AMOUNTING TO RS.37,42,653/-; SUNDRY CREDITORS AMOUNTING TO RS.10,53,743/- AND EXPENSES PAYABLE AMOUNTING TO RS.57,927/-. IN OUR CONSIDERED OPINION, THERE CAN BE NO LOGIC IN ADDING THE AMOUNT PAYABLE TO THE BANK U/S 68 OF THE ACT, WHICH, IN THE INSTANT C ASE, STANDS AT RS.37.42 LAC. AS REGARDS THE CREDITORS AMOUNTING TO RS. 10. 53 LAC, WE FIND THAT THESE ARE TRADE CREDITORS WHICH WERE GENERATED FROM PURCHASES MADE BY THE ASSESSEE. AS THE PURCHASES MADE BY THE AO HAVE NOT BEEN DISPUTED, ITA NO.3894/DEL/2012 7 THERE CANNOT BE ANY QUESTION OF MAKING ADDITION TOW ARDS TRADE CREDITORS. SIMILAR IS THE POSITION ABOUT EXPENSES PAYABLE AMOU NTING TO RS.57,927/-. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER IN DELETIN G THE ADDITION OF RS.48,54,323/-. 8. THE NEXT GROUND IS AGAINST THE DELETION OF ADDIT IONS OF RS.2,70,000/- AND RS.70,000/- OUT OF UNSECURED LOANS. THE AO MAD E ADDITION OF RS.8.20 LAC ON THE GROUND THAT THE ASSESSEE DID NOT FURNISH ANY CONFIRMATIONS. THE LD. CIT(A) DELETED THE ADDITION OF RS.2.70 LAC REPRESENTING THE BROUGHT FORWARD BALANCES AND ANOTH ER AMOUNT OF RS.70,000/- WAS DELETED WHICH WAS LOAN RECEIVED BY THE ASSESSEE FROM HER HUSBAND. THE REMAINING AMOUNT OF RS.4.80 LAC WA S SUSTAINED BY THE LD. CIT(A). 9. HAVING REGARD TO THE FACTS OF THE INSTANT CASE, WE FIND THAT THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION OF RS.2.70 LAC WHICH REPRESENTED BROUGHT FORWARD BALANCES. SECTION 68 D OES NOT CONTEMPLATE MAKING OF ADDITION IN RESPECT OF BROUGHT FORWARD BA LANCES. SIMILARLY, AS REGARDS THE LOAN OF RS.70,000/- RECEIVED BY THE ASS ESSEE FROM HER HUSBAND, ITA NO.3894/DEL/2012 8 SHRI D.S. CHAUHAN, IT CAN BE FOUND THAT SAME AO PAS SED ORDER U/S 143(3) AND THE LD.CIT(A) DECIDED THE APPEAL IN THE CASE OF SHRI D.S. CHAUHAN. IT IS ONLY THEREAFTER AND ON THE STRENGTH OF SUCH PROC EEDINGS THAT THE LD. CIT(A) CHOSE TO DELETE THE ADDITION. IN THE ABOVE BACKDROP OF FACTS, WE ARE OF THE CONSIDERED OPINION THAT THIS ADDITION OF RS.70,000/- WAS ALSO RIGHTLY DELETED. THERE IS NO CROSS APPEAL FROM THE SIDE OF THE ASSESSEE. AS SUCH, THE BALANCE ADDITION OF RS.4.80 LAC SUSTAINED BY THE LD. CIT(A) REMAINS AS SUCH. 10. THE LAST GROUND IS AGAINST THE DELETION OF DISA LLOWANCE OF RS.1,50,000/-. THE AO DID NOT ALLOW SET OFF OF RS. 1,50,000/- FOR WANT OF VERIFICATION/DOCUMENTARY EVIDENCE. THE LD. CIT(A) DELETED THE ADDITION BY CONSIDERING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN THIS REGARD. 11. HAVING REGARD TO THE FACTS OF THE INSTANT CASE, WE FIND THAT THE ONLY ISSUE REASON ASSIGNED BY THE AO IN NOT ALLOWING L OSS SUFFERED BY THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY WAS THAT THE ASSESSEE DID NOT FURNISH ANY DETAILS ABOUT THE PAYM ENT OF INTEREST, WHICH RESULTED INTO LOSS UNDER THE HEAD INCOME FROM HOUS E PROPERTY BEFORE THE ITA NO.3894/DEL/2012 9 AO. SUCH EVIDENCE WAS FURNISHED BY THE ASSESSEE BE FORE THE LD. CIT(A), THE DETAILS OF WHICH HAVE BEEN INCORPORATED ON PAGE 25 OF THE IMPUGNED ORDER. DESPITE THE FACT THAT THE REMAND REPORT WAS CALLED FOR FROM THE AO, THERE IS NOTHING ADVERSE IN SUCH REMAND REPORT JUST IFYING THE REVERSAL OF THE VIEW TAKEN BY THE LD. CIT(A) ON THIS ISSUE. WE , THEREFORE, APPROVE THE IMPUGNED ORDER ON THIS SCORE. 12. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 16.05.201 6. ; SD/- SD/- [SUCHITRA KAMBLE] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, MAY, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.