Vivek Financial Focus Ltd, New Delhi V. ITO, New Delhi

ITA 3899/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3902 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 08-06-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 16-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANSHUMAN PATNAIK SENIOR
• Keywords: Difference of opinion; Accommodation entries; Change of opinion
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H, NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3899/DEL/2009 (ASSESSMENT YEAR : 2001-02) M/S. VIVEK FINANCIAL FOCUS LIMITED, VS. ITO, WARD 17 (3), 105, VISHWA SADAN, NEW DELHI. 9, DISTRICT CENTRE JANAKPURI, NEW DELHI 110 058. (PAN : AAACV4309A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH, ADVOCATE REVENUE BY : SHRI ANSHUMAN PATNAIK, SENIOR DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (APPEALS)-XIX, NEW DELHI DATED 07.07.2009 FOR THE A SSESSMENT YEAR 2001- 02. THE ORIGINAL GROUNDS TAKEN IN THE APPEAL READ AS UNDER : 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) IS BAD BOTH ON LAW AND FACTS. 2. THAT PROCEEDINGS U/S 148 OF THE INCOME TAX ACT A RE BAD BOTH IN LAW AS WELL AS ON FACTS. 3. THAT THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) IS PERVERSE, IS NOT A SPEAKING ORDER, IN AS MUCH AS IT HAS FAILED TO ADJUDICATE ON THE ISSUE THAT TH E ALLEGED INFORMATION STATED TO BE IN POSSESSION OF THE ASSES SING OFFICER, ON THE BASIS OF WHICH THE ACTION U/S 148 WAS INITIA TED WAS NOT ITA NO.3899/DEL/2009 2 ANY INFORMATION AS EVEN THE NAME OF THE PARTY WHO I S ALLEGED TO HAVE PROVIDED AN ACCOMMODATION ENTRY TO THE APPELLA NT WAS NOT MADE KNOWN IN RESPONSE TO THE REQUEST OF THE APPELL ANT. 4. THAT THE APPELLANT CRAVES LEAVE AND PRAYS THAT T HE RELIEF CLAIMED ABOVE OR ANY OTHER RELIEF, TO WHICH THE APP ELLANT IS ENTITLED, MAY KINDLY BE GRANTED. 2. LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO TAKEN AN ADDITIONAL GROUND WHICH READ AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.9,00 ,000 AS PROPOSED BY THE A.O. THE ACTION BEING ARBITRARY AN D UNJUST MUST BE QUASHED. 3. BRIEF FACTS OF THE CASE ARE AS UNDER :- ASSESSEE IS PUBLIC LIMITED COMPANY. THE RETURN OF INCOME WAS FILED ON 30.10.2001 FOR ASSESSMENT YEAR UNDER CONSIDERATI ON. ORDER U/S 143(3) COMPLETED ON 29.3.2004. NOTICE U/S 148 WAS ISSUED TO ASSESSEE ON 22.3.2008 AFTER RECORDING REASONS AND GETTING APPRO VAL OF CIT CONCERNED IN VIEW OF PROVISIONS OF SECTION 151 OF I.T. ACT. ASS ESSEE CLAIMED THAT NOTICE WAS SERVED UPON ON 2.4.2008 WHICH IS BEYOND SIX YEA RS PERIOD. NOTICE WAS ISSUED BY SPEED POST ON 22.3.2008. THE NOTICE WAS ISSUED ON THE BASIS OF SPECIFIC INFORMATION THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRY OF RS.9 LACS. 4. AFTER HEARING BOTH THE SIDES ON THE ORIGINAL GRO UNDS NO.1 TO 4 TAKEN IN THE APPEAL, WE HOLD THAT THE NOTICE WAS ISSUED ON 2 2.3.2008 AND IT WAS DISPATCHED BY SPEED POST ON 22.3.2008. IN THE ASSE SSEES CASE, THE PROVISIONS OF SECTION 149(1)(B) IS APPLICABLE WHERE THE NOTICE U/S 148 CAN BE ISSUED WITHIN SIX YEARS FROM THE END OF THE RELEVAN T ASSESSMENT YEAR. ADMITTEDLY, THE NOTICE WAS ISSUED ON 22.3.2008, WHI CH WAS WELL-IN-TIME. ITA NO.3899/DEL/2009 3 THE NOTICE WAS ALSO DISPATCHED WELL BEFORE THE LAST DATE, I.E. 31.3.2008. THE REQUIREMENT OF SECTION 149 IS ISSUED NOT SERVED . NOTICE ISSUED WITHIN TIME BUT SERVED AFTER THE EXPIRY OF TIME LIMIT COUL D NOT INVALIDATE THE NOTICE. THE NOTICE WAS ISSUED ON SPECIFIC INFORMATION RECEI VED BY THE ASSESSING OFFICER REGARDING THE ACCOMMODATION ENTRIES TAKEN B Y THE ASSESSEE. THEREFORE, THERE WAS SUFFICIENT MATERIAL/INFORMATIO N BEFORE THE ASSESSING OFFICER FOR MAKING A REASONABLE BELIEF REGARDING TH E ESCAPEMENT OF INCOME, WHICH IS PRE-REQUIREMENT FOR ISSUING NOTICE U/S 148 OF THE INCOME-TAX ACT. THE FACTS OF THE CASE ALSO SHOW THAT IT WAS NOT THE CASE OF CHANGE OF OPINION. THERE WAS A SPECIFIC INFORMATION BEFORE THE ASSESSI NG OFFICER ON WHICH HE FORMED A REASONABLE BELIEF AND ISSUED A NOTICE U/S 148. UNDER THESE CIRCUMSTANCES, WE FIND NO FAULT IN THE ORDER OF CIT (A) IN DISMISSING THE ASSESSEES APPEAL ON THE ISSUE OF INITIATING PROCEE DINGS U/S 148 OF THE INCOME-TAX ACT. THEREFORE, ORIGINAL GROUNDS NO.1 T O 4 RAISED IN THE APPEAL ARE DISMISSED. 4. AFTER HEARING BOTH SIDES, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS IS BEING ADMITTED AS THE SAME IS ON THE ISSUES ARISING OUT OF THE ORDER OF CIT (A) AND THE ISSUE HAS BEEN DISCUSSED IN PARAS 13 TO 16 OF THE CIT(A) ORDER. WE ARE OF THE V IEW THAT MERELY BECAUSE ASSESSEE HAD NOT TAKEN GROUND IN MEMO OF APPEAL, TH E ASSESSEE SHOULD NOT SUFFER IF IT IS NECESSARY FOR PROPER ADJUDICATION O F THE MATTER. WHEN ISSUE ARISES OUT OF CIT(A)S ORDER THEN NON-ADMISSION SHA LL AMOUNT TO DENIAL OF JUSTICE. 5. THE CIT (A) HAS DISMISSED THE ASSESSEES APPEAL ON THE GROUND THAT NO CONFIRMATION LETTER WAS FILED FROM M/S. CHANAKYA FI NVEST PVT. LTD. FOR WHICH THE CREDIT WAS APPEARING IN THE BOOKS OF ACCO UNT OF THE ASSESSEE. LEARNED COUNSEL PLEADED THAT THE CIT (A) HAS NOT AP PRECIATED THE OTHER ITA NO.3899/DEL/2009 4 EVIDENCES FILED, HENCE THE ISSUE MAY BE RESTORED BA CK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH AFTER PROVID ING OPPORTUNITY TO ASSESSING OFFICER. LEARNED DR WAS NOT HAVING ANY S ERIOUS OBJECTION ON THIS PROPOSITION. 6. AFTER HEARING BOTH THE SIDES, WE SET ASIDE THE I SSUE RAISED IN THE ADDITIONAL GROUND REGARDING THE ADDITION OF RS.9 LA CS TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THE 8 TH DAY OF JUNE 2009 AFTER THE CONCLUSION OF THE HEARING. SD/- SD/- (C.L. SETHI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : THE 8 TH DAY OF JUNE, 2009 TS COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT 4. CIT(A)-XIX, NEW DELHI. 5. DR, ITAT. ASSTT.REGISTRAR ITAT, NEW DELHI.