DCIT, circle-2, Meerut V. Nitin rastogi, Meerut

ITA 4501/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6455 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 14-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESH SHARMA SENIOR
• Assessee Lawyers: S K JAIN
• Keywords: Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCHES (CAMP AT MEERUT) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4501/DEL./2018 (ASSESSMENT YEAR : 2013-14) DCIT, CIRCLE 2, VS. SHRI NITIN RASTOGI, MEERUT. A 64, SAKET, MEERUT. (PAN : AGWPR5462R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. JAIN, ADVOCATE REVENUE BY : SHRI YOGESH SHARMA, SENIOR DR DATE OF HEARING : 09.01.2019 DATE OF ORDER : 16.01.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DCIT, CIRCLE 2, MEERUT (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 09.03.2018 PASSED BY LD. C IT (APPEALS), MEERUT QUA THE ASSESSMENT YEAR 2013-14 O N THE GROUNDS INTER ALIA THAT :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACT IN QUASHING THE ASSESSMENT PROCEEDINGS AND TRE ATING THE CONSEQUENTIAL ASSESSMENT ORDER AS NULL AND VOID BY HOLDING THAT NOTICE U/S 143(2) ISSUED BY ITO, WARD-IV(2), JALAND HAR, AS LEGALLY INVALID AND OUT OF JURISDICTION AS IT HAS B EEN REPORTED BY ITA NO.4501/DEL./2018 2 THE ASSESSING OFFICER IN HIS SCRUTINY REPORT THAT D URING THE A. Y. 2009-10, THE ASSESSEE HAD FILED HIS RETURN OF INCOM E AT INCOME TAX OFFICE, JALANDHAR, WITH THE ADDRESS OF JALANDHA R BECAUSE OF WHICH THE PAN OF THE ASSESSEE WAS LYING IN THE JURI SDICTION OF ITO, WARD-IV(2), JALANDHAR, WHO WAS THEREFORE LEGAL LY CORRECT IN ISSUING THE NOTICE U/S 143(2) OF THE 1. T. ACT, 1961, WHEN THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY THRO UGH CASS AND HENCE THE NOTICE U/S 143(2) ISSUED BY ITO, WARD-IV( 2), JALANDHAR, CANNOT BE HELD TO BE LEGALLY INVALID AS IT WAS ISSUED AND SERVED WELL WITHIN TIME BY THE ASSESSING OFFICE R IN WHOSE JURISDICTION THE PAN OF THE ASSESSEE LAY. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACT IN HOLDING THE ADDITION MADE BY A.O. ON ACCOUN T OF RESTRICTION OF TRADE DISCOUNT ON THE SALE OF PRIVAT E BOOKS TO 18%, AS UNSUSTAINABLE WITHOUT TAKING INTO CONSIDERATION THE FACT THAT THE ASSESSEE FAILED TO GIVE ANY CONCRETE REASON AS TO WHY HE IS SELLING HIS BOOKS TO ONLY ONE PURCHASER I.E. M/S CH ITRA PRAKASHAN LTD., WHEN THERE MAY BE SOME OTHER PURCHA SER WHO MAY BE WILLING TO BUY BOOKS FROM THE ASSESSEE AT A LOWER TRADE DISCOUNT. 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACT IN HOLDING THE ADDITION MADE BY A.O. AS UNSUST AINABLE IGNORING THE FACT THAT THE TRADE RESULTS OF THE ASS ESSEE WERE NOT WOTHN ACCEPTING AS HE WAS NOT MAINTAINING ANY STOCK REGISTER SINCE THE INCEPTION OF BUSINESS AND WAS SELLING HIS BOOKS TO ONLY ONE CONCERN THAT WAS CONTROLLED BY THE FATHER OF TH E ASSESSEE. 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACT IN HOLDING THAT THE A.O. DID NOT SPECIFICALLY GIVEN ANY OPPORTUNITY TO ASSESSEE REBUT ANY ADVERSE FINDING D ETECTED BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS IGNORIN G THE FACT THAT THE A.O. VIDE ORDER SHEET ENTRY DATED 07.03.20 16 REQUIRED THE ASSESSEE TO PROVIDE JUSTIFICATION FOR NON-MAINTENAN CE OF STOCK REGISTER AND EXCESS DISCOUNT PROVIDED TO A RELATED CONCERN FROM WHICH ALL SALES WERE MADE. 5. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(A), MEERUT MA Y BE SET ASIDE AND THAT OF THE AO BE RESTORED. ITA NO.4501/DEL./2018 3 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : THE ASSESSEE IS INTO THE BUSINESS OF PUBLICATION WORK IN THE NAME AND STYLE OF M/S. RAJL UXMI PUBLICATIONS WHO IS DERIVING INCOME FROM BUSINESS A ND INTEREST INCOME FROM OTHER SOURCES. DURING ASSESSMENT PROCE EDINGS, AO NOTICED THAT THE ASSESSEE HAS NOT MAINTAINED STOCK REGISTER AND HAS MADE SALES TO ONLY ONE PARTY I.E. M/S. CHITRA PRAKA SHAN PVT. LTD. WITH A DISCOUNT OF 18% TO 55% OF THE MRP. AO RESTR ICTED THE DISCOUNT GIVEN BY THE ASSESSEE AT 18% AND THEREBY A SSESSED THE INCOME OF THE ASSESSEE AT RS.1,38,96,710/- AS AGAIN ST THE DECLARED INCOME OF RS.46,72,830/-. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITION MADE ON AC COUNT OF RESTRICTING THE DISCOUNT TO 18% BY ALLOWING THE APP EAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.4501/DEL./2018 4 5. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PA SSED BY THE LD. CIT (A) ON LEGAL GROUND THAT THE LD. CIT (A ) HAS ERRED IN LAW IN QUASHING THE ASSESSMENT PROCEEDINGS AS WELL AS ON MERIT. 6. PERUSAL OF PARA 1 OF THE ASSESSMENT ORDER APPARE NTLY GOES TO PROVE THAT THE ASSESSEE HAS E-FILED HIS RETURN OF I NCOME FOR THE YEAR UNDER ASSESSMENT ON 07.09.2013 DECLARING INCOME OF RS.46,72,830/- AND HIS CASE WAS SELECTED FOR SCRUTI NY AND NOTICE U/S 143 (2) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) WAS ISSUED ON 09.09.2014 BY ITO, WARD 4 (2), JALANDHAR, WHICH WAS DULY SERVED UPON THE ASSESSEE. HOWEVER, SECOND NOT ICE U/S 143 (2) ALONG WITH NOTICE U/S 142 91) OF THE ACT WAS ISSUED TO THE ASSESSEE WHICH WAS ALSO SERVED UPON AND ASSESSEE WAS REPRESE NTED THROUGH SHRI S.K. JAIN, ADVOCATE. 7. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS FILED INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME, COPY OF WH ICH IS AVAILABLE AT PAGES 1 TO 10 OF THE PAPER BOOK, GIVIN G DESIGNATION OF AO, WARD/CIRCLE 2 (1), MEERUT. IT IS ALSO NOT IN D ISPUTE THAT THE ASSESSEE HAS BEEN DULY ASSESSED IN THE PRECEDING AS WELL AS SUCCEEDING YEARS BY AO, WARD/CIRCLE 2 (1), MEERUT A ND HAS NEVER BEEN ASSESSED AT JALANDHAR. IT IS ALSO NOT IN DISP UTE THAT AO, JALANDHAR AFTER ADMITTING THE FACT THAT CORRECT JUR ISDICTION TO ASSESS THE ASSESSEE LIES WITH AO, MEERUT, TRANSFERRED THE ASSESSMENT ITA NO.4501/DEL./2018 5 RECORD TO AO, MEERUT, WHO HAS FINALLY FRAMED THE AS SESSMENT ON 23.03.2016. 8. IN THE BACKDROP OF THE AFORESAID UNDISPUTED FACT S OF THE CASE, THE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS AS TO WHETHER AO, MEERUT, ISSUED AND SERVED NOTICE U/S 14 3 (2) OF THE ACT TO THE ASSESSEE UPTO 30.09.2014 TO ASSUME THE J URISDICTION TO FRAMED ASSESSMENT. WHEN UNDISPUTEDLY THE ORIGINAL AND CORRECT JURISDICTION TO FRAME THE ASSESSMENT IN CASE OF ASS ESSEE WAS AT MEERUT, THE JURISDICTION INITIALLY ASSUMED BY AO, J ALANDHAR BY ISSUING NOTICE U/S 143 (2) DATED 09.09.2014 COULD N OT HAVE BEEN TRANSFERRED EXCEPT BY FOLLOWING THE PROCEDURE LAY D OWN U/S 127 OF THE ACT. ADMITTEDLY, NO SUCH ORDER U/S 127 OF THE ACT WAS PASSED BY PRINCIPAL CIT, MEERUT AND AS SUCH, JURISDICTION HAS NEVER BEEN TRANSFERRED TO JALANDHAR. SO, THE ASSESSMENT FRAME D BY AO, MEERUT ON THE BASIS OF NOTICE DATED 09.09.2014 ISSUED U/S 143 (2) IS ILLEGAL, NULL AND VOID I.E. WITHOUT JURISDICTION. AO, MEERU T WAS REQUIRED TO ISSUE NOTICE U/S 143 (2) BEFORE 30.09.2014 WHEREAS HE HAS ISSUED THE NOTICE U/S 143 (2), AVAILABLE AT PAGES 17 7 18 OF THE PAPER BOOK, ON 30.07.2015 WHICH IS OTHERWISE BARRED BY LIMITATI ON. SO, ASSESSMENT FRAMED IN THIS CASE WITHOUT ISSUING A LE GALLY VALID NOTICE IS NOT SUSTAINABLE IN THE EYES OF LAW. ITA NO.4501/DEL./2018 6 9. EVEN OTHERWISE, ON MERIT, LD. CIT (A) HAS ALSO T HRASHED THE ISSUE BY CAREFULLY EXAMINING SALE BILLS OF SOLE DIS TRIBUTOR MADE AVAILABLE ON THE ASSESSMENT RECORD SHOWING THAT THE ASSESSEE HAS GIVEN TRADE DISCOUNT TO THE SOLE DISTRIBUTOR RANGIN G FROM 40% TO 55% AND IN TURN, THE SOLE DISTRIBUTOR FORWARDED THE DISCOUNT TO THE SHOPKEEPER REGARDING PRIVATE AUTHOR REFERENCE BOOKS RANGING FROM 25% TO 40% AND AS SUCH, THE ADDITION MADE BY THE AO CANNOT BE SUSTAINED. 9. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE FIN D NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED B Y THE LD. CIT (A) ON LEGAL ISSUES AS WELL AS ON MERITS, HENCE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 16 TH DAY OF JANUARY, 2019. SD/- SD/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 16 TH DAY OF JANUARY , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.