Phulvati, Ghaziabad V. ITO, Ward- 1(2), Ghaziabad

ITA 4572/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7788 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 19-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: R K MEHRA
• Keywords: Gift; Additional evidence; Non compliance; Reassessment proceedings; Set aside
• Section: 234B; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER ITA NO.4572/DEL/2018 ASSESSMENT YEAR: 2009-10 SMT. PHULVATI VILLAGE MAKRAMATPUR SIKROD, NEAR RAJ NAGAR EXTENSION GHAZIABAD - 201002 PAN DIJPP8558Q VS. THE INCOME TAX OFFICER WARD 1(2) GHAZIABAD (APPELLANT) (RESPONDENT) APPELLANT BY SH. R. K. MEHRA, CA RESPONDENT BY SH. S. L. ANURAGI, SR. DR. DATE OF HEARING: 14/08/2019 DATE OF PRONOUNCEMENT: 14/10/2019 ORDER PER R.K PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE EXPARTE ORDER DATED 27.02.2018 OF THE CIT(A)-2, NEW DELHI RELATING TO A. Y. 2009-10. 2. THERE WAS DELAY OF 32 DAYS IN FILING OF THIS APP EAL BY THE ASSESSEE FOR WHICH THE ASSESSEE HAS FILED A CONDNON ATION PETITION ALONGWITH AN AFFIDAVIT EXPLAINING THE REASONS FOR S UCH DELAY. AFTER CONSIDERING THE CONTENTS OF THE CONDONATION P ETITION FILED ALONGWITH THE AFFIDAVIT OF THE ASSESSEE AND CONSIDE RING THE FACT THAT THE ASSESSEE IS A WIDOW OF 78 YEARS OLD AND RE SIDES IN A VILLAGE AND BEING AN ILLITERATE LADY WHO PUTS HER T HUMB PAGE | 2 IMPRESSION, THE DELAY IN FILING OF THE APPEAL IS CO NDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATION. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT ON THE BAS IS OF AIR INFORMATION RECEIVED THAT THE ASSESSEE HAS INVESTED RS.40,65,000/- FOR PURCHASING AN IMMOVABLE PROPERTY AT VILLAGE KALANJARI, PARGANA- MEERUT, THE CASE OF THE ASSESSE E WAS REOPENED AFTER RECORDING REASONS. NOTICE U/S.148 O F THE IT ACT DATED 17.03.2016 WAS SENT TO THE ADDRESS OF THE ASS ESSEE THROUGH SPEED POST WHICH WAS RECEIVED BACK UNDELIVE RED. THEREFORE, A COPY OF THE NOTICE WAS SERVED BY ITI T HROUGH AFFIXTURE. THE ASSESSING OFFICER THEREAFTER ISSUED NOTICE U/S. 142 (1) OF THE IT ACT 1961 DATED 17.10.2016 THROUGH SPE ED POST FOR COMPLIANCE 26.10.2016. SINCE THERE WAS NON ATTENDA NCE FROM THE SIDE OF THE ASSESSEE ANOTHER SHOW CAUSE NOTICE U/S. 144 OF THE IT ACT DATED 26.10.2016 WAS ISSUED BY THE AO TH ROUGH SPEED POST FOR COMPLIANCE ON 04.11.2016. SINCE THERE WAS AGAIN NON COMPLIANCE FROM THE SIDE OF THE ASSESSEE THE AO COM PLETED THE ASSESSMENT U/S. 144 OF THE IT ACT DETERMINING THE T OTAL INCOME OF THE ASSESSEE AT RS.40,43,000/-. 4. BEFORE CIT(A) THE ASSESSEE APART FROM CHALLENGIN G THE ADDITION ON MERIT CHALLENGED THE VALIDITY OF THE RE ASSESSMENT PROCEEDINGS. HOWEVER, THE ASSESSEE WAS UNSUCCESSFUL AND THE CIT(A) APPEAL SUSTAINED THE ADDITION MADE BY THE AO AND ALSO UPHELD THE VALIDITY OF THE REASSESSMENT PROCEEDINGS . 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE AS SESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS :- PAGE | 3 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE P ETITIONERS CASE, THE LEARNED ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN WRONGLY ASSUMING JURISDICTION UNDER SECTION 148 OF THE INCOME TAX AC T, 1961 IN THE CASE OF THE PETITIONER AND WITHOUT THERE BEING ANY APPLICATION OF MIND OR HAVING SUFFICIENT REASONS TO BELIEVE THAT ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT. THUS THE ACTION OF FRAMING THE ASSESSME NT FOR THE RELEVANT ASSESSMENT YEAR IN APPEAL IS BASED ON SUSPICION, SU RMISES AND CONJECTURES. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE PETITIONERS CASE, THE LEARNED ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN FRAMING THE ASSESSMENT UNDER SECTION 144/147 OF THE INCOME TAX ACT, 1961 ON 31-10- 2016 WHEREAS THE DATE FIXED FOR HEARING WAS ON 04-1 1-2016, AS SUCH THE ACTION OF THE LEARNED ASSESSING IN MAKING THE ASSES SMENT ORDER UNDER SECTION 144/147 OF THE ACT IS NOT ONLY ILLEGAL AND BAD IN L AW BUT SUCH ORDER IS ALSO NULLITY IN LAW WHICH NEEDS TO BE QUASHED FORTHWITH. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE P ETITIONERS CASE, THE LEARNED ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN FAILING TO ISSUE THE NOTICE UNDER SECTION 148 OF THE ACT TO THE PETITION ER AND FURTHER EFFECTING ITS SERVICE ON THE PETITIONER WITHIN THE LIMITATION PER IOD ON 31 ST MARCH, 2016. 4. WITHOUT PREJUDICE THE LEARNED ASSESSING OFFICER HAS MISERABLY FAILED TO FOLLOW THE MANDATED PROCEDURE TO AFFECT THE SERV ICE OF NOTICE UNDER SECTION 148 THROUGH AFFIXTURE, THUS DEFYING THE LEGAL COMPL IANCE AS CONTEMPLATED IN LAW LEADING TO FRAMING THE ASSESSMENT UNDER SECTION 144/147 OF THE ACT ALSO BAD IN LAW. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E PETITIONERS CASE, THE LEARNED ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING THE ADDITIONS OF RS.4340000 BEING INVESTMENT MADE BY THE PETITION ER FOR PURCHASE OF IMMOVABLE PROPERTY, WITHOUT CONSIDERING THE MATERIA L EVIDENCE PLACED ON RECORD AND FRAMING THE EX PARTE ASSESSMENT ON THE B ASIS OF SUSPICION AND WITHOUT BRINGING ON RECORD ANY MATERIAL EVIDENCE WH ATSOEVER IN SUPPORT OF HIS ACTION. PAGE | 4 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E PETITIONERS CASE, THE LEARNED ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN CHARGING INTEREST UNDER SECTION 234A AND 234B AMOUNTED TO RS.1336849. 6. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ORDER OF THE CIT(A) SUSTAINING THE ADDITION AS WELL AS UPHOLDING THE VALIDITY OF REASSESSMENT PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE PAGE 17 OF THE PAPER BOOK DREW THE ATTENTION OF THE BENCH TO THE NOTICE U/S. 148 OF TH E IT ACT WHICH WAS AFFIXED AT THE ADDRESS OF THE ASSESSEE ON 06.06 .2016 WHEREAS THE TIME PERIOD FOR ISSUE OF NOTICE WITHIN A PERIOD OF SIX YEARS LAPSED ON 31.03.2016. REFERRING TO PAGE 119 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE ADDRESS OF T HE ASSESSEE AS PER THE SALE DEED WHICH IS THE ADDRESS IN THE LETTE R ISSUED U/S. 148 OF THE IT ACT. REFERRING TO PAGE 4 OF THE PAPE R BOOK THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BEFORE CIT( A) THE ASSESSEE HAD CATEGORICALLY STATED THAT THE NOTICE I SSUED U/S. 148 BY THE AO DATED 17.03.2016 WAS RETURNED BACK BY THE POSTAL AUTHORITIES UNDELIVERED DUE TO WRONG ADDRESS. THE AO HAS STATED THAT THE NOTICE WAS SERVED ON THE ASSESSEE THROUGH AFFIXTURE. HOWEVER, ON INSPECTION OF THE FILE NO SUCH RECORD W AS FOUND OF SUCH SERVICE OF NOTICE OTHER THAN THE REPORT ON THE COPY OF NOTICE ITSELF BY THE ITI. THE DATE OF AFFIXTURE AS PER TH E REPORT IS 06.06.2016 WHICH IS WAY BEYOND THE DUE DATE BY WHIC H NOTICE MUST HAVE BEEN SERVED ON THE ASSESSEE I.E. 31.03.20 16. IT WAS ACCORDINGLY ARGUED BEFORE THE CIT(A) THAT THE SERVI CE OF NOTICE BY AFFIXTURE IS MERELY AN EYE WASH. FURTHER THE ASSESS EE IS A WELL KNOWN LADY IN THE SMALL VILLAGE WHERE SHE IS LIVING SINCE LONG AND THE INSPECTOR HAS NOT APPROACHED ANY PERSON NOR THE RE IS ANY PAGE | 5 WITNESS OF SUCH ALLEGED AFFIXTURE. HE ACCORDINGLY S UBMITTED THAT THE SERVICE THROUGH AFFIXTURE AS ALLEGED IS SHAM AN D AN EYE WASH. REFERRING TO THE COPY OF THE ASSESSMENT ORDER HE SU BMITTED THAT THE AO HAS ISSUED THE SHOW CAUSE NOTICE U/S.144 DAT ED 26.10.2016 FOR COMPLIANCE ON 04.11.2016. HOWEVER, THE AO HAS PASSED THE ORDER ON 31.10.2016 I.E. BEFORE THE DATE OF COMPLIANCE AS PER THE NOTICE, THEREFORE, ON THIS GROUND ALSO T HE ASSESSMENT ORDER IS ILLEGAL. 7. SO FAR AS THE MERIT OF THE CASE IS CONCERNED THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE EXPLAI NED THE SOURCE BEFORE THE CIT(A) THROUGH ADDITIONAL EVIDENCES WHIC H WERE FORWARDED BY HIM TO THE AO FOR REMAND REPORT ACCORD ING TO WHICH THE ASSESSEE HAS OBTAINED AN AMOUNT OF RS.35 LACS A S GIFT FROM HER SON SH. SHARVAN KUMAR AND AN AMOUNT OF RS. 8 LA CS WAS OUT OF HER OWN SAVINGS. HE ACCORDINGLY SUBMITTED THAT B OTH LEGALLY AND FACTUALLY THE CIT(A) WAS NOT JUSTIFIED IN SUSTA INING THE ADDITION AND UPHOLDING THE VALIDITY OF REASSESSMENT PROCEEDINGS. 8. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON T HE ORDER OF THE AO AND THE CIT(A). 9. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BEL OW. I HAVE ALSO GONE THROUGH THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I FIND THE AO IN THE INSTANT CASE ISSUED NOTICE U/S.148 DA TED 17.03.2016 THROUGH SPEED POST WHICH WAS RETURNED BA CK UNDELIVERED BY THE POSTAL AUTHORITIES. THEREAFTER A S PER THE AO THE SAME WAS SERVED BY ITI THROUGH AFFIXTURE. A PER USAL OF THE COPY OF THE REPORT OF THE INSPECTOR PLACED AT PAGE 17 OF THE PAPER PAGE | 6 BOOK SHOWS THAT THE INSPECTOR HAS GIVEN HIS REPORT TO THE AO ON 06.06.2016 WHEREIN HE HAS MENTIONED THAT THE NOTICE WAS AFFIXED ON THE ADDRESS OF THE ASSESSEE ON 06.06.2016. HOWE VER, THE PERIOD OF SIX YEARS FOR ISSUE OF NOTICE U/S. 148 IN THE INSTANT CASE EXPIRES ON 31.03.2016. THEREFORE, THE NOTICE HAS NO T BEEN PROPERLY SERVED ON THE ASSESSEE BEFORE THE DUE DATE . FURTHER A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ORDE R HAS BEEN PASSED ON 03.10.2016 WHICH THE AO HAS MENTIONED IN THE BODY OF THE ORDER. THE LD. CIT(A) HAS ALSO AT PARA-1 OF TH E ORDER HAS MENTIONED AS UNDER : THIS APPEAL HAS BEEN PREFERRED AGAINST THE ORDER D ATED 31.10.2016 PASSED UNDER SECTION 144/147 OF THE IT AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) BY THE INCOME T AX OFFICER, WARD 1 (2), GHAZIABAD FOR THE ASSESSMENT YEAR 2009-1 0. 10. I FIND THE AO AT PARA -3 OF THE ASSESSMENT ORDE R HAS MENTIONED AS UNDER : 3. IN RESPONSE TO ABOVE ISSUED NOTICES, NEITHER ANY ONE ATTENDED OR ANY REPLY WAS RECEIVED IN THE OFFICE O F THE UNDERSIGNED. FINALLY, A SHOW-CAUSE NOTICE U/S. 144 OF THE IT ACT, 1961 DATED 26.10.2016 WAS ISSUED BY THE UNDERSIGN ED THROUGH SPEED POST {EU200347762IN} FOR COMPLIANCE ON 04.11.2016. IN RESPONSE TO THIS NOTICE, THE ASSESS EE AGAIN FAILED TO FILE ANY RETURN OF INCOME FOR A.Y.(2009-1 0) AND FURTHER MADE NON COMPLIANCE OF THIS NOTICE. THUS, THE ASSE SSEE HAD CHOSEN TO MAKE NO COMPLIANCE AND CONTINUED TO EXHIBI T NON COOPERATIVE ATTITUDE TOWARDS THE ASSESSMENT PROCEED INGS. 11. FROM THE ABOVE IT IS SEEN THAT THE DATE GIVEN F OR COMPLIANCE WAS ON 04.11.2016 WHEREAS THE AO HAS PASSED THE ORD ER ON PAGE | 7 31.10.2016. FROM THE ABOVE IT IS CRYSTAL CLEAR THA T JUST TO COVER UP THE LIMITATION THE AO HAS SERVED A NOTICE THROUG H AFFIXTURE AFTER THE SPECIFIED DATE AND HAS ALSO PASSED THE AS SESSMENT ORDER BEFORE THE DUE DATE OF COMPLIANCE GIVEN BY HIM. VIE WED FROM EITHER ANGLE THE ORDER PASSED BY THE AO IS ILLEGAL AND NONEST. I, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND AL LOW THE GROUNDS RAISED BY THE ASSESSEE ON THE ISSUE OF VALIDITY OF THE REASSESSMENT PROCEEDINGS. SINCE THE ASSESSEE SUCCEEDS ON THE L EGAL GROUND RAISED BY HER, THE GROUND ON MERIT IS NOT BEING ADJ UDICATED BEING ACADEMIC IN NATURE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.10.2019. SD/- (R.K PANDA) ACCOUNTANT MEMBER *NEHA* DATE:- 14.10.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI PAGE | 8 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 14.10.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.10.2019 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER