M/s. Geetanzle Associates Private Ltd., New Delhi V. DCIT, New Delhi

ITA 4458/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6636 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 11-01-2016
• Assessment Year: 2000-2001
• Appeal Filed On: 13-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J S KOCHAR
• Keywords: Reopening of assessment; Opportunity of being heard
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH D NEW DELHI BEFORE : S MT. DIVA SINGH, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 4458/DEL./2014 ASSTT. YEAR : 2000 - 01 GEETANZLE ASSOCIATES PVT. LTD., VS. D.C.I.T., CIRCLE 12(1), C/O PRADEEP K. KAPOOR & CO., NEW DELHI 306 - 307, SEWAK BHAWAN, 16/2, WEA KAROL BAGH, NEW DELHI. [PAN: AAACG3772G] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. J.S. KOCHAR, C.A. RESPONDENT BY : M S. RISHPAL BEDI, SR. DR DATE OF HEARING : 11.01.2016 DATE OF PRONOUNCEMENT : 24 .02.2016 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - IV, NEW DELHI DATED 29.05.2014 FOR THE ASSESSMENT YEAR 2000 - 01 ON THE FOLLOWING GROUNDS : 1. THAT THE LEARNED CIT(A) ERRED IN UPHOLDING THE VALIDITY OF ORDER PASSED BY THE AO U/S. 147/143(3) OF THE INCOME TAX ACT, 1961 WHICH WAS PASSED WITHOUT SERVING THE JURISDICTIONAL NOTICE U/S. 148 OF THE ACT ON THE ASSESSEE. 2. THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE VALIDITY OF INITIATION OF THE PROCEEDINGS U/S. 147 OF THE INCOME TAX ACT AS THE SAME WERE INITIATED WITHOUT INDEPENDENT APPLICANT OF MIND BY THE AO. ITA NO. 4458/DEL./2014 2 3. THAT THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO TREATING THE SHARE CAPITAL OF RS.1,00,000 RAISED FROM MR. MAHESH AGGARWAL AND RS.2,00,000 RAISED FROM M/S. TRANSPAN FINANCIAL SERVICES LTD. AS INCOME U/S. 68 OF THE IT ACT, 1961 WHEN THE INITIAL ONUS PLACED ON THE ASSESSEE IN PROVING THE CA SH CREDITS HAD BEEN FULLY DISCHARGED BY PRODUCING DOCUMENTARY EVIDENCE WHICH WAS NOT REBUTTED BY THE AO IN ANY MANNER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.11.2000 DECLARING INCOME OF RS.75,470/ - . THE CASE WAS PROCESSED U/S. 143(1). INFORMATION WAS RECEIVED REGARDING ENTRY OPERATORS AND THEIR BENEFICIARIES FROM THE OFFICE OF DIT(INV.) - I, NEW DELHI VIDE D. NO. 1399 DATED 02.03.2006 AND NO. DIT(INV.) - 1/2006 - 07/AE/1536 DATED 05.02.2007. ON THE BASIS OF INFORMA TION FOLLOWING TYPES OF ENTRIES WERE RECEIVED : ASSESSEE BANK A/C VALUE OF ENTRY TAKEN DATE ON WHICH ENTRY TAKEN NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT BANK A/C FROM WHICH ENTRY GIVEN BANK OF INDIA 100000 28/03/2000 MAHESH GARG A/C NO.3578, STATE BANK OF PATIALA, DG BANK OF INDIA 200000 28/03/2000 TRANSPAN FINANCIAL SERVICES A/C NO. 4217, STATE BANK OF PATIALA, DG 3. THE ASSESSING OFFICER ISSUED NOTICE ON 29.03.2007 ON THE ADDRESS R - 12A, HAUZ KHAS, NEW DELHI, WHICH IS AVAILABLE ON RECORD. IN RE SPONSE TO THE NOTICE, NON APPEARED ON SPECIFIED DATE. THE LD. ASSESSING OFFICER ISSUED LETTER ON 12.10.2007 ON THE ABOVE MENTIONED ADDRESS FOR FILING OF RETURN, BUT NO ITA NO. 4458/DEL./2014 3 RESPONSE RECEIVED. THE AO ISSUED ANOTHER LETTER TO THE SAME EFFECT ON 23.11.2007. THIS L ETTER WAS SENT TO THE NEW ADDRESS AT B - 14, GROUND FLOOR, CHIRAG ENCLAVE, NEHRU PLACE, NEW DELHI. THIS LETTER WAS SENT BY SPEED POST NO. ED341755945IN DATED 26.11.2007. THIS LETTER WAS RECEIVED BACK FROM THE POSTAL AUTHORITIES UNSERVED WITH THE REMARK LEFT WITHOUT ADDRESS . THE AO SENT ANOTHER LETTER ON 23.11.2007 AT THE RESIDENTIAL ADDRESS OF THE DIRECTOR, SHRI DINESH KUMAR GUPTA AT 56, NAVJEEVAN VIHAR, NEW DELHI 110017. THIS LETTER WAS RECEIVED BY THE DIRECTOR ON 09.12.2007. IN RESPONSE TO THE LETTER DATE D 23.11.2007, THE ASSESSEE FILED A LETTER ON 11.12.2007 BEFORE THE AO STATING THAT THE NOTICE U/S. 148 DATED 29.03.2007 WAS NOT RECEIVED BY HIM. BUT HE SUBMITTED THAT THE ORIGINAL RETURN FILED BY ASSESSEE ON 29.11.2000 MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO NOTICE U/S. 148. THE REASONS RECORDED FOR REOPENING PROCEEDINGS WAS PROVIDED TO THE ASSESSEE. THE ASSESSMENT WAS CO MPLETED BY ADDING RS.3,00,000/ - AS PROVIDED IN THE CHART ABOVE. THE ASSESSEE OBJECTED THE SERVICE OF NOTICE WHICH IS MANDATORY R EQUIREMENT. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY AGAINST THE ABOVE ASSESSMENT ORDER PASSED BY THE LD. AO U/S. 143(3)/147 OF THE ACT. THE LD. CIT(A) UPHELD THE ORDER OF THE AO. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO. 4458/DEL./2014 4 4. DURING THE COURSE OF ARGUMENTS, THE LD. AR OF THE ASSESSEE SUBMITTED THAT NO NOTICE U/S. 148 HAS BEEN SERVED UPON THE ASSESSEE, WHICH IS MANDATORY REQUIREMENT UNDER THE INCOME TAX ACT FOR MAKING RE - ASSESSMENT. MRS. MADHU GUPTA, DIRECTOR AND PRINCIPAL OFFICER OF ASSESSEE COMPANY HAD PRODUCED HER AFFIDAVIT DENYING THE RECEIPT OF ANY NOTICE U/S. 148 OF THE ACT. HE SUBMITTED THAT IT HAS NOT BEEN CONSIDERED BY THE AO AND THE CIT(A). HE FURTHER SUBMITTED THAT THE ASS ESSMENT HAS BEEN MADE ON THE BASIS OF INFORMATION RECEIVED FROM DIT (INV.) WING. THE AO HAS NOT APPLIED HIS MIND BEFORE REOPENING THE CASE. THEREFORE, THE ENTIRE ASSESSMENT IS AGAINST THE LAW AND VOID AB INITIO. 5. THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE FIRST APPELLATE AUTHORITY. HE SUBMITTED THAT THE LD. AUTHORITIES BELOW HAVE PASSED CORRECT ORDERS. THEREFORE, THE IMPUGNED ORDER DOES NOT REQUIRE ANY INTERFERENCE. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD BEFORE US. AFTER GOING THROUGH THE OBJECTIONS RAISED BY THE APPELLANT BEFORE THE APPELLATE AUTHORITY AND THE AO REGARDING NON - SERVICE OF NOTICE, WE FIND THAT NONE OF THE AUTHORITIES BELOW HAS MENTIONED IN THEIR RESPECTIVE ORDERS IN CLEAR TERMS WHETHER THE NOTICE ISSUED ITA NO. 4458/DEL./2014 5 U/S. 148 TO THE ASSESSEE WAS PROPERLY SERVED UPON ASSESSEE OR NOT TILL THE COMPLETION OF ASSESSMENT, PARTICULARLY WHEN THE ASSESSEE HA S RAISED OBJECTIONS IN THIS REGARD BEFORE BOTH THE AUTHORITIES BELOW. SERVICE OF NOTICE U/S. 148 OF THE ACT IS THE MANDATORY REQUIREMENT FOR REOPENING OF ASSESSMENT. WE, THEREFORE, THINK IT APPROPRIATE IN THE INTEREST OF JUSTICE THAT THE MATTER SHOULD BE R EMANDED TO THE FILE OF AO FOR PASSING THE ORDER AFRESH AFTER MAKING PROPER ENQUIRY ON THE SERVICE OF NOTICE AND GIVING CLEAR FINDING ABOUT ITS SERVICE ON THE ASSESSEE, WHICH IS THE MANDATORY REQUIREMENT UNDER LAW. NEEDLESS TO SAY THE ASSESSEE SHALL BE AFFO RDED REASONABLE OPPORTUNITY OF BEING HEARD. WE ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24.02.2016. SD/ - SD/ - ( DIVA SINGH ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24 TH FEB. 2016 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI