Harman Singh Dhingra, New Delhi V. ACIT, New Delhi

ITA 4641/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5264 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 31-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Search and seizure; Assessment record; Set aside
• Section: 143(3); 153A; 292BB; 143(2); 147; 132

Judgement Text

1 ITA NO. 4641/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER I.T.A. NO. 4641/DEL/20 16 (A.Y 2013-14) (THROUGH VIDEO CON FERENCING) HARMAN SINGH DHINGRA 85, GOLF LINK NEW DELHI AADPD4472E (APPELLANT) VS ACIT CENTRAL CIRCLE-08 NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 30/06/2016 PASSED BY CIT(A)-24, NEW DELHI FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS OF APPEAL ARE AS UNDER: 1. THAT THE ORDER OF LD. CIT APPEALS-24 IN APPEAL NO . 123/15-16 DT. 30.06.2016 TO THE EXTENT MENTIONED HEREUNDER IN CON FIRMING THE ACTION OF THE LD. ASSESSING OFFICER IS ILLEGAL, UNJUST, OPPOSED T O FACTS AND SUFFERS FROM THE VICE OF ARBITRARY ACTS. 2. (I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT APPEALS HAS ERRED IN CONFIRMING THE ADDITION OF RS. 18,50,000/- TOWARDS FAMILY CASH FOUND AT 85 GOLF LINKS NEW DELHI. (II) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD. CIT APPELLANT BY SH. ARUN KISHORE, CA RESPONDENT BY MS. SUNITA SINGH, CIT DR DATE OF HEARING 15.09.2021 DATE OF PRONOUNCEMENT 24.09.2021 2 ITA NO. 4641/DEL/2016 APPEALS HAS GROSSLY ERRED IN ESTIMATING THE HOUSEHO LD EXPENSES AT RS.75,000/- PER MONTH AND IN INCLUDING THE HOUSE RE NOVATIONS WHICH ARE SEPARATELY ACCOUNTED FOR. (III) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD. CIT APPEALS HAS FAILED TO APPRECIATE THAT ALL CASH WITHDRAWALS OF THE FAMILY MEMBERS ARE FROM THE BANK ACCOUNTS WHICH HAVE BEEN VERIFIED AND FOUND CORRECT BY THE AO. (IV) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT APPEALS HAS ERRED IN HOLDING THAT THE APPELLANT UND ERSTATED PAST HOUSEHOLD EXPENSES TO EXPLAIN THE CASH HOLDING OF 2013, WHEN ALL PAST RETURNS HAD ALREADY BEEN FILED. 3. THAT THE NET INCOME OF THE APPELLANT BE REDUCED BY RS. 18,50,000/-. ADDITIONAL GROUNDS 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE EASE AND IN LAW. THE ASSESSMENT MADE BY ID. AO U/S 143(3) VIDE ORDER DT. 25.03.2015 IS ILLEGAL AND NOT SUSTAINABLE, SINCE NO VALID NOTICE U/S 143(2) WAS ISSUED BY THE LD. AO WITHIN THE STATUTORY TIME LIMIT SPECIFIED U/S 14 3. 2. THAT THE EXISTING GROUNDS OF APPEAL ALREADY FILE D BE RENUMBERED AND THESE GROUNDS BE TREATED AS GROUND NUMBERS 3 & 4 AND ORIG INAL GROUND NUMBER 3 BE RENUMBERED AS GROUND NO. 5. 3. SEARCH AND SEIZURE ACTION U/S 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON THE ASSESSEE ON 16.01.2013. DURING THE COURSE OF SEARCH, CASH OF RS. 18,50,000/- AND JEWELLERY OF RS. 2,45,20,300/- WAS FOUND FROM THE POSSESSION OF THE FAMILY OF THE ASSESSEE. THE INDIV IDUAL ASSESSEES OF THIS FAMILY ARE SH. HARMAN SINGH DHINGRA, SMT. AMRIT DHINGRA (M OTHER OF SH. HARMAN SINGH DHINGRA) AND SMT. MALA DHINGRA (WIFE OF SH. H ARMAN SINGH DHINGRA). THE JEWELLERY WAS FOUND AS APPORTIONED IN THE HANDS OF THE INDIVIDUALS BY THE ASSESSING OFFICER. AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, THE 3 ITA NO. 4641/DEL/2016 ASSESSING OFFICER MADE ADDITIONS OF RS. 92,07,084/- ON ACCOUNT OF UNEXPLAINED JEWELLERY AND RS. 18,50,000/- UNEXPLAINED CASH. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT (A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE NOTICE U/S 143(2) WAS NOT SERVED TO THE ASSESSEE WITHIN THE SPECIFIED TIME. THIS IS THE SEV ENTH YEAR OF SEARCH. THE NOTICE U/S 143(2) WAS ISSUED ON 20/2/2015 WHICH HAS TO BE SERVED AS PER THE STATUTE TILL 30/09/2014. THE LD. AR RELIED UPON TH E DECISION OF HONBLE APEX COURT IN CASE OF ACIT VS. HOTEL BLUE MOON 321 ITR 3 62 (SC) AND HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. GUJARAT FOILS LTD. 377 ITR 324 (GUJ). THE LD. AR FURTHER SUBMITTED THAT A POST SEARCH ASS ESSMENT WAS COMPLETED WITHOUT ISSUANCE OF NOTICE U/S 143(2) WHICH IS NOT VALID IN LAW APART FROM THE FACT THAT AN OUTER TIME LIMIT FOR COMPLETION OF ASS ESSMENT HAD ALREADY LAPSED AND ADDITION ITSELF WAS NOT BASED ON MATERIALS FOUN D DURING SEARCH, SO THAT FOR ANY OF THESE REASONS, THE ADDITIONS MADE BY THE ASS ESSING OFFICER WAS FOUND TO BE INVALID IN FIRST APPEAL AND UPHELD BY THE TRIBUN AL, SO THAT THE ADDITIONS STOOD DELETED IN THE CASE OF DCIT VS. FORUM SALES P VT. LTD. (2019) 76 ITR (TRIBUNAL) (S.N.) 51 (DELHI). FOLLOWING THE SAME PR INCIPLE IN CASES THAT OF CIT VS. MITA GUTGUTIA PROPRIETOR M/S FERNS AND PETALS (2017) 395 ITR 526 (DELHI) AND CIT VS. KABUL CHAWLA (2016) 380 ITR 573 (DELHI) , THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE THEREIN. THE LD. AR FURTHER SUBMITTED THAT IN CASES WHERE SEARCH AND SEIZURE TOOK PLACE THOUGH NOTICE U /S 153A IS ISSUED BUT WHEN NO NOTICE ISSUED U/S 143(2) THEN THE ASSESSMEN T IS NOT VALID AS HELD IN CASE OF CHINTELS INDIA LTD. VS. DCIT 397 ITR 416 (D ELHI). THE LD. AR FURTHER SUBMITTED THAT THE REASSESSMENT U/S 147 WILL BE INV ALID, IF NO NOTICE U/S 143(2) WAS ISSUED AND WILL NOT BE SAVE EVEN BY SECT ION 291BB, EVEN IF THE ASSESSEE PARTICIPATES IN THE PROCEEDINGS. THE REVE NUE CAN AVAIL SECTION 292BB ONLY IF NOTICE U/S 143(2) WAS ISSUED AND NOT WHEN ADMITTED POSITION IS THAT NO NOTICE WAS ISSUED AS IN THE INSTANT CASE. THE LD. AR RELIED UPON THE 4 ITA NO. 4641/DEL/2016 DECISION IN CASE OF TRAVENCOR DIAGNOSTICS PVT. LTD. VS. ACIT (2016) 74 TAXMANN.COM 239 (KERALA). THE LD. AR FURTHER SUBMI TTED THAT EFFECT OF NON ISSUE OF NOTICE U/S 143(2) WITHIN THE SPECIFIED TIM E AND INVALID SERVICE, WHERE NO EVIDENCE OF NOTICE U/S 143(2) WAS GIVEN TO THE P OSTAL AUTHORITY THEN THE ASSESSMENT HAS TO BE SET ASIDE. THE LD. AR RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN CASE OF PRINCIPAL CIT VS. NEXUS SOFTWARE LTD. (2017) 81 TAXMAN.COM 152 (GUJARAT). 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). IN RESPECT OF ADDITIONAL GROUND, THE LD. DR SUBMITT ED THAT FROM THE RECORDS IT APPEARS THAT NOTICE U/S 143(2) WAS NOT WITHIN THE S PECIFIED TIME. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. SINCE THE ADDITIONAL GROUNDS ARE LEGAL GRO UNDS WE ARE FIRSTLY DECIDING THE SAME BY ADMITTING THE ADDITIONAL GROUNDS. IT IS PERTINENT TO NOTE THAT THE NOTICE U/S 143(2) SHOULD HAVE BEEN ISSUED TILL THE DATE 30/9/2014 BUT THE SAME WAS ISSUED AFTER THE STATUTORY LIMIT. THIS FA CT WAS NOT DENIED BY THE LD. DR AFTER GOING THROUGH THE ASSESSMENT RECORDS. HENC E, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE ARE ALLOWED. THUS, THE ASSE SSMENT ORDER ITSELF BECOMES NULL AND VOID AB INITIO AS THE NOTICE ISSUED WAS NO T ISSUED WITHIN THE SPECIFIED TIME. SINCE, THE ASSESSMENT ITSELF BECOMES NULLITY; THERE IS NO NEED TO DISCUSS THE MERITS OF THE CASE. THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SEPTEMBER, 2021 SD/- SD/- (PRASHANT MAHARISHI) (SUCH ITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24/09/2021 R. NAHEED * COPY FORWARDED TO: 5 ITA NO. 4641/DEL/2016 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI