Sushil Kumar, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 4024/DEL/2011

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3710 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 15-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 05-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: TIWARI
• Assessee Lawyers: K L ANEJA
• Keywords: Business income; Period of limitation; Non compliance
• Section: 44AD; 147; 131; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-4024/DEL/2011 ( ASSESSMENT YEAR: 2005-06) SUSHIL KUMAR C/O ANIL GUPTA, ADVOCATE 148/3A, CIVIL LINES MUZAFFARNAGAR ADKPK0281E VS ITO WARD-1 MUZAFFARNAGAR ASSESSEE BY SH. K.L. ANEJA, ADV. REVENUE BY SH. TIWARI, SR. DR ORDER PER SHRI K.N. CHARY, JUDICIAL MEMBER AGGRIEVED BY THE ORDER DATED 04.05.2011 IN APPEAL N O. 238/10- 11/MZR PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)- MUZAFFARNAGAR (HEREINAFTER FOR SHORT CALLED AS THE LD. CIT (A)) ASSESSEE PREFERRED THIS APPEAL ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AND ON FA CTS IN HOLDING THAT NOTICE U/S 148 WAS PROPERLY SERVED UPON THE APPELLANT AND CONSEQUENTLY THE ASSESSMENT MADE U/S 144/147 WAS VALID IN LAW & ALSO ACTION U/S 148 WAS RIGHTLY INITIATED BY THE AO. 2. THAT THE LD. CIT (A) HAS ERRED IN LAW IN UPHOLDI NG THE ADDITION OF RS. 11,00,500/- MADE BY THE AO & ADDING TOWARDS APPELLA NTS INCOME FROM DATE OF HEARING 12.10.2017 DATE OF PRONOUNCEMENT 23.10.2017 2 ITA NO. 4024/DEL/2011 BUSINESS OFFERED UNDER THE PRESUMPTIVE PROVISIONS O F SECTION 44AD & 44AF OF THE INCOME TAX ACT. 3. THAT THE LD. CIT (A) HAS FILED TO APPRECIATE THE MATERIAL ON RECORD AS ALSO BEFORE THE AO, NOT JUSTIFYING ANY ADDITIONS TOWARDS THE APPELLANTS INCOME. 4. THAT THE APPELLANT RESERVES HIS RIGHTS TO ADD, A MEND OR MODIFY ANY GROUND OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE AO GATHERED IN FORMATION THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS. 11,00,500/- IN THE ACCOUNT WITH VIJAYA BANK ON 31.03.2005 WITHOUT MENTIONING HIS PA N NO. AND CONSEQUENTLY AO REQUIRED THE ASSESSEE TO FURNISH TH E RETURN OF INCOME. ASSESSEE EXPLAINED THAT THE RETURN OF INCOME WAS FI LED ON 24.10.2005 ON WHICH AO FOUND THAT THE RETURN WAS FILED ONLY WITH COMPUTATION OF INCOME IN RESPECT OF THE BUSINESS INCOME OF RS. 42,850/- A LONG WITH INTEREST, AS SUCH, THE AO INFERRED THAT THE DEPOSIT OF RS. 11,00 ,500/- WAS NOT EXPLAINED IN THE RETURN OF INCOME. AO INITIATED PR OCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT CALLED AS THE ACT ) BY ISSUANCE OF NOTICE U/S 148 OF THE ACT, BUT SINCE THERE WAS NO COMPLIAN CE FROM THE ASSESSEE NOTICE U/S 271(1)(B) OF THE ACT WAS ISSUED AND FOR NON COMPLIANCE THEREWITH PROPOSAL FOR PENALTY U/S 272A(1)(C) OF TH E ACT WAS SENT. SUBSEQUENTLY SUMMONS U/S 131 OF THE ACT WERE ALSO I SSUED BUT THERE WAS NO COMPLIANCE. SINCE THERE WAS NO RESPONSE FROM TH E ASSESSEE, AO ISSUED NOTICE U/S 144 OF THE ACT AND SINCE THERE WA S NO RESPONSE AO COMPLETED THE REASSESSMENT U/S 144 OF THE ACT MAKIN G ADDITION OF RS. 3 ITA NO. 4024/DEL/2011 11,00,500/- AND INTEREST THEREON. APPEAL PREFERRED BY THE ASSESSEE TO THE LD. CIT (A) WAS DISMISSED BY THE LD. CIT (A) STATIN G THAT ONCE HAVING RESPONDING TO NOTICE U/S 148 OF THE ACT THE ASSESSE E SUBSEQUENTLY REMAINED SILENT THEREBY FORCEING THE AO TO CONCLUDE THE REASSESSMENT U/S 144 OF THE ACT AND SINCE SO MANY STATUTORY NOTICES WERE ISSUED TO THE ADDRESS FURNISHED BY THE ASSESSEE, THOUGH THEY WERE NEVER RETURNED, PRESUMPTION WAS DRAWN BY THE LD. CIT (A) THAT THE A SSESSEE MUST HAVE RECEIVED THEM. LD. CIT (A) FURTHER RECORDED THAT T HE EXPLANATION OF THE ASSESSEE THAT HE SHIFTED HIS RESIDENCE FROM MUZAFFA RNAGAR TO ROORKEE CANNOT BE ACCEPTED BECAUSE THE ASSESSEE NEVER INFOR MED THE CHANGE OF ADDRESS TO THE AO. LD. CIT (A) LASTLY HELD THAT EV EN IF THE NOTICES WERE NOT SERVED ON THE ASSESSEE, ISSUANCE OF NOTICE WITHIN T HE PERIOD OF LIMITATION FOR REASSESSMENT GIVES JURISDICTION TO THE AO. ON THESE GROUNDS LD. CIT (A) DISMISSED THE APPEAL. HENCE, THE ASSESSEE IS B EFORE US IN THIS APPEAL. 3. IT IS THE ARGUMENT OF THE LD. AR THAT THOUGH IT WAS EXPLAINED TO THE AUTHORITIES BELOW THAT HIS FATHER OF THE ASSESSEE G OT HEART ATTACK AND WAS UNDER TREATMENT, AS SUCH, THE ASSESSEE WAS IN VILLA GE KASCHRI LOOKING AFTER HIS FATHER IN THE YEAR 2009 AND THAT SUBSEQUE NTLY THE ASSESSEE HAD TO SHIFT HIS RESIDENCE TO ROOKEE FOR EMPLOYMENT, AS SUCH, HE DID NOT 4 ITA NO. 4024/DEL/2011 RECEIVE THE NOTICE THERE WAS NO PROPER APPRECIATION OF THIS FACT BY THE AUTHORITIES. AS A MATTER OF FACT, LD. AR SUBMITS T HAT THE ASSESSEE WAS REGULARLY ASSESSED TO TAX SINCE AY 1992-93 AND WAS DECLARING THE INCOME AT 8% OF THE CONTRACTUAL RECEIPTS AND OTHER INCOME FROM RETAIL TRADING OF MEDICINES. HOWEVER, AO WAS NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE IN RESPECT OF NON COMPLIANCE WITH THE NOTI CES. LD. AR SUBMITS THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT REASO N FROM COMPLYING WITH THE ALLEGED NOTICES SAID TO HAVE BEEN ISSUED BY THE AO. IN THE CIRCUMSTANCES, IT IS PRAYED ON BEHALF OF THE ASSESS EE THAT IF AN OPPORTUNITY IS GRANTED TO HIM HE WOULD COOPERATE WITH THE ASSES SEE FOR ASSESSMENT OF HIS JUST TAX LIABILITY BY PRODUCING ALL THE RELEVAN T DOCUMENTS. LD. DR VEHEMENTLY RELIED UPON THE ORDERS OF THE AUTHORITIE S BELOW AND SUBMITTED THAT THE ASSESSEE IS GUILTY OF WILLFUL NON COOPERAT ION WITH THE PROCEEDINGS, AS SUCH, THE AO IS JUSTIFIED IN COMPLETING THE REAS SESSMENT U/S 144 OF THE ACT. 4. WE HAVE CAREFULLY GONE THROUGH THE RECORD AND TH E HISTORY OF THE PROCEEDINGS AS RECORDED BY THE AO AND THE CIT IN TH EIR ORDERS. HOWEVER, IT IS EVIDENT FROM THE RECORD THAT THOUGH THE NOTIC ES WERE SAID TO HAVE BEEN ISSUED, THERE IS NO EVIDENCE TO SHOW THAT THOS E NOTICES WERE SERVED ON THE ASSESSEE. EXPLANATION OFFERED BY THE ASSESS EE IS THAT DUE TO THE ILL 5 ITA NO. 4024/DEL/2011 HEALTH OF HIS FATHER AND FOR EMPLOYMENT THE ASSESSE E WAS AWAY FROM HIS ADDRESS THAT WAS AVAILABLE WITH THE AUTHORITIES. S INCE THE REASSESSMENT HAD TO BE COMPLETED WITHIN THE PERIOD OF LIMITATION , PROCEEDINGS ARE CONCLUDED U/S 144 OF THE ACT DRAWING A PRESUMPTION THAT THE ASSESSEE MUST BE AWARE OF THE PENDING PROCEEDINGS. NOW THAT THE ASSESSEE PRAYS FOR AN OPPORTUNITY TO COOPERATE WITH THE AUTHORITIE S FOR DETERMINATION OF THE TAX LIABILITY. HAVING A CAREFUL REGARD TO THE FACT S AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT NO PREJ UDICE WOULD BE CAUSED TO EITHER OF THE PARTIES IF AN OPPORTUNITY IS GRANT ED TO THE ASSESSEE FOR PRODUCING THE DOCUMENTS IF ANY BEFORE THE AO FOR DE TERMINATION OF HIS JUST TAX LIABILITY. WITH THIS VIEW OF THE MATTER, WE FI ND IT JUST AND PROPER TO SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR REASSESSM ENT AFRESH AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE TO COOPERATE WITH TH E DISPOSAL OF THE MATTER. IT IS MADE CLEAR THAT IT IS THE LAST OPPOR TUNITY FOR THE ASSESSEE TO GET THE MATTER DISPOSAL ON MERITS. WE, ACCORDINGLY , RESTORE THE MATTER TO THE FILE OF THE AO. 6 ITA NO. 4024/DEL/2011 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23.10.2017 SD/- SD/- (G.D. AGRAWAL) (K.N. CHARY) PRESIDENT JUDICIAL MEMBER DATED: 23.10.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI