Bhupinder Kumar Chugh, V. ITO, Ward-4,

ITA 4659/DEL/2004

• Counselvise Citation: 465920114 RSA 2004
• Duration Of Justice: 10 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-05-2015
• Assessment Year: 1994-1995
• Appeal Filed On: 26-10-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VASAMTJAM
• Keywords: Reopening of assessment; Gift; Period of limitation; Initiation of penalty proceedings; Onus to prove; Time period of passing order; Reason to believe
• Section: 142(1); 234B; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C, NEW DELHI) BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 4659/DEL/2004 ASSESSMENT YEAR : 1994-95 BHUPINDER KUMAR CHUG, VS. ITO, WARD 4, 11812, SUKHDEV NAGAR, PANIPAT PANIPAT GIR / PAN: (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GUPTA, ADV. SHRI ASHWANI TANEJA, ADV. RESPONDENT BY : SHRI T.VASAMTJAM. SR/ DR DATE OF HEARING : 18.05.2015 DATE OF PRONOUNCEMENT : 02.06.2015 ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(A) DATED 27.08.2004. THE APPEAL IN I.T.A. NO. 4659/DE L/2004 WAS EARLIER DISMISSED IN LIMINE VIDE TRIBUNAL ORDER DATED 02.03 .2009 BUT THE SAME WAS RESTORED VIDE TRIBUNAL ORDER DATED 19.06.2009 FOR H EARING ON MERITS. 2. IN I.T.A. NO. 4659/DEL/2004, THE ASSESSEE HAS TA KEN VARIOUS GROUND OF APPEAL BY WHICH HE HAD CHALLENGED THE ADDITION SUST AINED BY LD. CIT(A) BOTH ON THE BASIS OF VIOLATION OF LEGAL PRINCIPLES AS WELL AS MERITS OF THE CASE. HOWEVER, THE ISSUE IS ONLY ONE I.E. CONFIRMATION OF ADDITION ON ACCOUNT OF GIFT RECEIVED BY ASSESSEE. ITA NO.4659/DEL/2004 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE CASE OF THE ASSESSEE WAS REOPENED U/S 148 OF THE ACT. THE CASE WAS REOPENE D ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING OF INC OME TAX DEPARTMENT THAT ASSESSEE HAD RECEIVED A BOGUS GIFT OF RS.10 LACS ON 30.07.1993 FROM AN NRE ACCOUNT HELD BY SHRI SUBHASH SETHI IN AMERICAN EXPR ESS BANK, NEW DELHI. AS PER ASSESSMENT ORDER, THE NOTICE U/S 148 WAS SER VED ON 21.05.2001 BUT ASSESSEE DID NOT COMPLY WITH THE SAME. THE NOTICE U/S 142(1) WAS SERVED ON 24.09.2001 AND AGAIN THERE WAS NO COMPLIANCE. THEN NOTICE U/S 143(2) WAS ISSUED ON 07.11.2001 FIXING THE CASE FOR 19.11.2001 . ON 19.11.2001, THE ASSESSEE FILED A REPLY AND CHALLENGED THE VALIDITY OF NOTICE U/S 143(2) AND SUBMITTED THAT NOTICE WAS SERVED BEYOND A PERIOD OF 12 MONTHS FROM THE END OF MONTH IN WHICH RETURN WAS FILED. RETURN OF IN COME IN THIS CASE WAS CLAIMED TO HAVE BEEN FILED WAY BACK IN 1995. AFTER GIVING VARIOUS NOTICES AS MENTIONED ABOVE TO WHICH ASSESSEE HAD NOT RESPON DED, FINALLY ASSESSEE WAS SERVED SUMMONS U/S 131 OF THE ACT AND IN RESPON SE TO WHICH ASSESSEE WAS REPRESENTED BY ONE SHRI ASHOK KUMAR AND ASSESSE E WAS REQUIRED TO FURNISH THE FOLLOWING INFORMATION:- 1. ON PERUSAL OF RECORD IT IS NOTICED THAT YOU HAV E RECEIVED A GIFT OF RS. 10 LACS FROM ONE SH: SUBHASH CHANDER OF DELH I DURING THE F.R. 1993-94 RELEVANT TO THE A.Y. 1994-95. YOU ARE REQUE STED TO PRODUCE SH: SUBHASH CHANDER ALONG WITH DOCUMENTARY EVIDENT REGARDING THE CAPACITY TO MAKE THE GIFT AS CLAIMED BY YOU. PLEASE ALSO INTIMATE WHAT RELATIONS YOU HAVE WITH SH: SUBHASH CHANDER AND ALS O INFORM THE OCCASION ON WHICH THE SAME WAS RECEIVED BY YOU. 2. YOU ARE A/SO REQUESTED TO GIVE COPIES OF YOUR AC COUNT FROM THE DIFFERENT FIRMS IN WHICH YOU HAVE DEPOSITED THE AMO UNT/YOU ARE HAVING INTEREST IN THOSE FIRMS RELEVANT TO THE A. Y. 1994- 95. 3. PROVE THE REASONABLENESS OF HOUSEHOLD EXPENSES W ITH REFERENCE TO THE SIZE OF FAMILY AND STANDARD OF LIVING. 4. PRODUCE POST OFFICE/BANK PASS BOOKS AND OTHER B OOKS OF ACCOUNT IF ANY MAINTAINED BY YOU. ITA NO.4659/DEL/2004 3 5. GIVE THE DETAILS OF MOVABLE/IMMOVABLE PROPERTIE S OWNED BY YOU DURING THIS PERIOD ALONG WITH DATE OF PURCHASE AND SOURCE OF INVESTMENT. 4. HOWEVER AGAIN NO COMPLIANCE WAS MADE. AGAIN ON 16.08.2002 NOTICE U/S 143(2) WAS ISSUED FIXING THE DATE OF HEA RING ON 28.08.2003 BUT AGAIN NOBODY ATTENDED. THE CASE WAS AGAIN FIXED FO R 20.11.2002. ON THAT DATE, SHRI RAJAT AGGARWAL, C.A. ATTENDED BUT DID NO T FILE ANY REPLY. THEN ON CHANGE OF JURISDICTION NOTICES U/S 142(1) AND 143(2 ) WERE SERVED UPON THE ASSESSEE ON 02.01.2003 AND CASE WAS FIXED FOR 10.01 .2003 BUT NOBODY ATTENDED ON 10.01.2003 AND CASE WAS FIXED FOR 13.02 .2003. THE AUTHORIZED REPRESENTATIVE THEN FILED A REPLY VIDE LETTER DATED 20.11.2002. VIDE THIS REPLY, THE ASSESSEE REITERATED THAT RETURN WAS FILE D WITHIN TIME ALLOWED U/S 139(1) BUT COULD NOT GIVE THE EXACT DATE ON WHICH D ATE IT WAS FILED. THE ASSESSEE ALSO DENIED THE SERVICE OF NOTICE U/S 148 AND ALSO SUBMITTED THAT NOTICE U/S 143(2) ISSUED ON 07.11.2001, WAS BEYOND TIME ALLOWED UNDER PROVISO OF SECTION 143(2) OF THE ACT. THE A.O. HO WEVER HELD THAT SERVICE OF NOTICE U/S 148 WAS MADE BY AFFIXTURE ALSO. THE A.O . FURTHER HELD THAT NO PROOF OF FILING OF INCOME TAX RETURN U/S 139(1) AS CLAIMED BY ASSESSEE WAS FILED. HE HELD THAT ASSESSEE COULD NOT GIVE GIR NU MBER ALLOTTED TO HIM. THE ASSESSEE, DURING ASSESSMENT PROCEEDINGS SUBMITTED T HAT THE DONOR WAS A DISTANT RELATIVE OF FATHER OF ASSESSEE. IT WAS CLA IMED THAT GIFT RECEIVED BY HIM WAS GENUINE ON THE BASIS OF FOLLOWING SUBMISSIO NS: I) EXISTENCE OF SUBHASH SETHI PROVED BY MENTIONING THE REFERENCE OF ` SUBHASH SETHI IN ORDER O ENFORCEMENT DIRECTORATE. II) CAPACITY OF DONOR IS ESTABLISHED BY CREDITS IN NRE A/C EMANATING FROM FOREIGN SOURCES, ITA NO.4659/DEL/2004 4 III) GENUINENESS OF TRANSACTION THROUGH GIFT DEED E XECUTION, IV) NO EVIDENCE FOR COMPENSATORY PAYMENT BY ASSESSE E, V) NO PROCEEDINGS PENDING WITH DIRECTORATE OF FERA. 5. THE A.O. HOWEVER, DID NOT AGREE WITH THE CONTENT ION OF ASSESSEE AND MADE ADDITIONS AS UNDER:- THE ASSESSEE FAILED TO ESTABLISH THAT ANY RETURN O F INCOME FOR A Y 1994-95 WAS EVER FILED ALTHOUGH STATED IN PRESUMPTI ON MANNER THAT IT WAS FILED WITHIN PRESCRIBED TIME I.E. BEFORE AUGUST . 1994. COMING TO THE POINT OF GIFT, IT IS SUBMITTED BY THE ASSESSEE VIDE PARA 3 OF PAGE 8 THAT THE ASSTT. DIRECTION, ENFORCEMENT DI RECTORATE, FEMA, EXONERATED THE NOTICE BHUPINDER KUMAR CHUGH TO ALL THE CHANGES LEVELED IN MEMORANDUM AND THE ORDER IS STATED TO BE APPENDED. BUT AS PER ORDER NO. AD/61/JC/02/SPS ELATED 27-6-2002 A ND FILE NO. T- 4173/JIJ200213086, NO FAVOUR HAS BEEN MADE FOR ASSE SSEE AS ALLEGED. THE ASSESSEE COULD NOT PRODUCE THE DONOR FOR EXAMIN ATION. MOREOVER, COULD NOT ESTABLISH THAT THE GIFT HAD BEE N SHOWN IN THE RETURN OF INCOME. THERE IS NO FORCE IN THE VERSION THAT THE SET OF DOCUMENTS BEING GIVEN NOW WAS APPENDED WITH RETURN AS NO ACKNOWLEDGMENT OF FILING OF RETURN HAS BEEN SO FURN ISHED. THE ASSESSEE EVEN COULD NOT GIVE THE GIR NO. ALLOTTED TO THE ASSESSEE FOR THAT ASSTT. YEAR. IT IS THE ONUS OF THE ASSESSEE T HAT HE HAS FILED ANY RETURN OF INCOME FOR THAT ASSTT. YEAR. THE ASSESSE E STATED THAT GENUINENESS OF GIFT IS NOT IN DOUBT AND IDENTITY OF DONOR IS SOUGHT TO BE ESTABLISHED THROUGH HIS CONFIRMATION TO THE DONEE. THE DONOR IS STATED TO BE A DISTANT RELATION OF FATHER OF ASSESSEE. ONE TIME THE ASSESSEE IS TRYING TO FLOAT A BOND OF RELATIONSHIP BETWEEN DONO R AND HIMSELF (ALTHOUGH WITHOUT ANY BASIS OR STRETCH OF IMAGINATI ON) AND ON THE OTHER HAND STATE THAT RELATIONSHIP AND OCCASION OF GIFT IS NOT REQUIRED FOR HAVING AND RECEIVING ANY GIFT THE GIFT HAS BEEN CLAIMED TO BE GENUINE ON REASONS :- (I) EXISTENCE OF SUBHASH SETHI PROVED BY MENTIONIN G THE REFERENCE OF SUBHASH SETHI IN ORDER TO ENFORCEMENT DIRECTORATE. (II) CAPACITY OF DONOR IS ESTABLISHED BY CREDITS I N NRE ALE EMANATTNG FROM FOREIGN SOURCES. (III) GENUINENESS OF TRANSACTION THROUGH GIFT DEE D EXECUTION. (TV) NO EVIDENCE FOR COMPENSATORY PAYMENT BY ASSE SSEE. ITA NO.4659/DEL/2004 5 (V) NO PROCEEDINGS PENDING WITH DIRECTORATE OF FE RA. THE ASSESSEE FURTHER CLAIMED THAT THERE WAS NO INTE REST INCOME FOR ASSTT. YEAR 1994-95, TOTAL WITHDRAWALS OF RS. 63600 / WERE STATED TO BE ADEQUATE FOR FAMILY OF SEVEN MEMBERS (CONTRIBUTION OF ASSESSEE ONLY RS. 8800) AND IT WAS UNDERTAKEN THAT NO MOVABLE OR IMMOVABLE PROPERTY WAS PURCHASED DURING THE YEAR. IN THE SAME REPLY, IT WAS MENTIONED AT S. NO. 4 ON PAGE 12 THAT BANK PASS BOO KS ARE PRODUCED FOR REFERENCE BUT NO SUCH PASS BOOKS HAVE, EVER BEE N PRODUCED BEFORE THE AG. THE CONTENTION OF THE ASSESSEE IS NOT CORRE CT AS FOR A VALID GIFT, THE ASSESSEE WILL HAVE TO ESTABLISH BESIDES T HE IDENTITY AND CAPACITY OF DONOR AND GENUINENESS OF TRANSACTION OF GIFT, THE ELEMENT OF RELATIONSHIP BETWEEN DONOR AND DONEE AND THE OCC ASION OF THE GIFT IN VIEW OF LAL CHAND KALRA'S CASE. NOW, THE ASSESSE E SAYS THAT DR. SUBHASH SETHI IS A RELATIVE OF MY FATHER AND IN THE STATEMENT GIVEN ON 4-5-1998, THE ASSESSEE STATED THAT SH. SUBHASH SETH I IS FRIEND OF HIS FATHER -IN-LAW'S BROTHER. THE DONEE IS NOT FAMILIAR WITH DONOR'S FAMILY BACKGROUND. HENCE, IT IS UNBELIEVABLE THAT A STRANG ER WOULD GIVE SUCH A LARGE AMOUNT US GIFT WITHOUT ANY MOTIVE. ALTHOUGH , THE DEED IS STATED TO BE EXECUTED ON 30-7-93 AND CONFIRMATION THROUGH AFFIDAVIT IS STATED TO BE EXECUTED ON 30-7-1993 BUT AS NONE OF THE ABOV E DOCUMENTS ARE REGISTERED HENCE, IN THE ABSENCE OF REGISTRATION OF THESE DOCUMENTS, DO NOT HAVE ANY EVIDENTIARY VALUE. THE REASONS STATED TO ESTABLISH GIFT AS GENUINE HAVE NOT FORCE AS THE ASSESSEE COULD NOT PR OVE THE IDENTITY AND CAPACITY OF DONOR AS COULD NOT PRODUCE HIM FOR EXAMINATION AND COULD NOT FILE HIS RETURN OF INCOME TILED IN UK OR INDIA. THE GENUINENESS OF TRANSACTION AS NOT ESTABLISHED AS PO INTED OUT DIRECTORATE OF FERA, AND INVESTIGATIONS OF INCOME T AX DEPARTMENT. THE OCCASION OF GIFT WAS NOT PROVED AS STATED AT TH E TIME OF MARRIAGE WHICH HAPPEN TO BE IN MARCH BUT GIFT IS STATED TO B E GIVEN ON 30TH JULY. RELATIONSHIP WAS NOT ESTABLISHED BETWEEN DONO R AND ASSESSEE. THE ASSESSEE WAS CONFRONTED VIDE LETTER DATED 17-2- 2003 THAT NOTICE U/S 148 WAS DULY SERVED AND WAS LEGALLY IN NATURE A S PER PROVISIONS OF INCOME TAX ACT. TO PRODUCE THE DONOR AND REGISTERED DOCUMENTS OF SIFT AND AFFIDAVIT, BANK PASS BOOK AND PROVE THE FI LING OF RETURN/OF INCOME OF DONOR. AND ASSESSEE WAS ALSO ASKED TO FIL E A COPY OF RETURN STATED TO HAVE BEEN FILED EARLIER ALONG WITH ITS AN NEXURES, BOOKS OF ACCOUNTS AND BANK PASS BOOKS RELEVANT TO F.Y. 1993- 94 AND TO JUSTIFY HOUSEHOLD WITHDRAWALS. INCOMPLIANCE TO IT, THE ASSE SSEE FILED REPLY ITA NO.4659/DEL/2004 6 DATED 10-3-2003 VIDE WHICH NOTHING WAS ADDED TO THE REPLY FILED EARLIER AND ALMOST REITERATED THE REPLY FILED ON 13 -2-2003. WHEN THE ASSESSEE COULD NOT PRODUCE THE DONOR FOR E XAMINATION HE WAS ASKED TO GIVE HIS ADDRESS OF INDIA. THE ADDRESS WAS GIVEN SUBHASH SETHI S/O SH. TARA CHAND SETHI, 84, SUNDER NAGAR, NEW DELHI. SUMMONS U/S. 131 OF IT ACT WAS ISSUED TO THE DONOR THROUGH REGISTERED POST ON 24-2-2003 WHICH RETURNED BACK ON 5-3)003 WITH THE REMARKS 'NO SUCH PERSON IN 84, SUNDER NAGAR'. ALTHO UGH, THE ASSESSEE WAS CONFRONTED ON THE ISSUE BUT HE COULD N OT BE SATISFACTORY ANSWER AND ONLY STATED THAT THIS WAS THE LATEST AVA ILABLE ADDRESS OF THE DONOR WITH HIM. IN THIS WAY THE ASSESSEE COULD NOT PROVE THE GIFT AS GENUINE. ON INVESTIGATIONS OF THE INCOME TAX DEPARTMENT AND ENFORCEMENT DIRECTORATE, 'IT HAS BEEN UNCOVERED THAT THE BENEFI CIARIES HAD APPROACHED THROUGH CA'S/AGENTS TO GET SUCH BOGUS GI FTS OUT OF SUCH NRE ACCOUNT ON PAYMENT OF 10 TO 15% PREMIUM ON THE PURCHASED GIFTS. THE ASSESSEE EVEN HAS NOT BEEN BOTHERED TO FURNISH BASIC MINIMUM INFORMATION ABOUT EXTENT AND SOURCES OF INC OME OF THE ALLEGED DONOR DURING THE RELEVANT PERIOD. RATHER HE TRIED TO SHIFT THE BURDEN OF PROOF UPON THIS OFFICE WHICH IS OF NO HEL P TO THE ASSESSEE AS IS A BOGUS GIFT. SUMMONS ISSUED TO DONOR RECEIVED BACK WITH REMARKS THAT NO SUCH PERSON AT THE ADDRESS. HENCE, IT IS AMPLY CLEAR FROM THE FACTS AND CIRCUMS TANCES OF THE CASE THAT THE ASSESSEE PURCHASED A BOGUS GIFT OF RS.10 L ACS ON 30.07.1993 ON PAYMENT OF AN EQUAL AMOUNT IN CASH ALONG WITH PR EMIUM FOR ARRANGING SUCH GIFT WHICH IS TAKEN @ 10% OF THE AMO UNT OF GIFT ARRANGED, THE AMOUNT OF BOGUS GIFT SO ARRANGED WAS UTILIZED BY THE ASSESSEE FOR MAKING INVESTMENT IN SHARES OF MIS GOL DEN HOME FURNISHING (P) LTD. PANIPAT. THEREFORE, THE AMOUNT OF RS, 11 LACS REPRESENTING THE BOGUS GIFT SHOWN BY THE ASSESSEE A LONGWITH PREMIUM PAID IS TAKEN AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE ASSTT, YEAR 1994-95. AS THE ASSESSEE COULD NEITHER GIVE ANY EVIDENCE OF FILING OF RETURN OF INCOME [OR THE ASSTT. YEAR 1994-95, NOR ANY BANK PA SS BOOK, COPY OF ACCOUNT IN BOOKS OF OTHER CONCERNS, INTEREST/DIVIDE ND INCOME, INCOME AND EXPENDITURE ACCOUNT. HENCE, IN ABSENCE OF FILI NG OF ANY ITA NO.4659/DEL/2004 7 INFORMATION REGARDING INCOME ON THE PART OF THE ASS ESSEE, IT WAS CONFRONTED TO THE ASSESSEE ON 16-3-2003, IF NOT PRO OF OF INCOME IS GIVEN, THE MAXIMUM OF INCOME TAX I.E. 40% WILL BE A PPLIED ON THE INCOME ASSESSED AS PER INFORMATION AVAILABLE ON REC ORD AND THE CASE WAS FIXED FOR 17-3-2003. ON 17-3-2003, THE COUNSEL OF THE ASSESSEE STATED THAT THE RETURN HAS ALREADY BEEN FILED AND A GAIN NO CONCRETE INFORMATION ABOUT INCOME WAS SUPPLIED. UNDER THESE CIRCUMSTANCES, THE ROTE OF TAX IS APPLIED AT 40% (RATE OF TAX OVER THE SLAP OF INCOME OF RS, 1 LAKH) ON THE INCOME OF RS. 11 LAKHS DISCUS SED ABOVE. 6. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE LD. CIT(A) AND FILED VARIOUS SUBMISSIONS. HOWEVER LD. CIT(A) ALSO DID N OT ACCEPT THE CONTENTION OF ASSESSEE AND UPHELD THE ADDITION AND RATHER INCREASED THE AMOUNT OF ADDITION BY AN AMOUNT OF RS.75,140/- BY H OLDING AS UNDER: THE MATTER HAS BEEN CONSIDERED. IT IS SEEN THAT T HE AO ALLOWED MORE THAN SUFFICIENT OPPORTUNITY TO THE APPELLANT TO PRO VE THE GENUINENESS OF THE ALLEGED GIFT BUT THE APPARENT COULD NEITHER PRODUCE SHRI SUBASH SETHI BEFORE THE A.O. FOR VERIFICATION OF THE GIFT NOR COULD FILE ANY OTHER DOCUMENT/EVIDENCE IN SUPPORT OF HIS CLAIM. E VEN THE SUMMONS U/S '131 COULD NOT BE SERVED UPON SH. SUBHASH SETHI ON THE ADDRESS GIVEN BY THE APPELLANT. THE APPELLANT COULD ALSO N OT ESTABLISH AS TO WHAT WAS THE RELATIONSHIP OF THE DONOR WITH THE APP ELLANT AND AS TO WHAT WAS THE OCCASION ON WHICH THE GIFT WAS ALLEGED TO HAVE BEEN GIVEN, THE AO, ON THE OTHER HAND, HAS POINTED OUT T HAT UNDER SIMILAR FACTS AND CIRCUMSTANCES AND FOR THE SAME ASSTT. YEA R AN ADDITION OF RS. 11,50,000/- COMPRISING OF BOGUS GIFT OF RS. 10 LACS AND PREMIUM OF RS. 1,50,0001- MADE BY THE ITO, WARD 25(3), NEW DEL HI IN THE CASE OF SH. VED PRAKASH CHUGH, BROTHER OF THE APPELLANT, HA S BEEN CONFIRMED BY THE CIT(A), X.XIV, NEW DELHI VIDE HIS ORDER DATE D 01.08.2003. THE CIT(A) IS STATED TO HAVE OBSERVED AS UNDER :- 'ON GOING THROUGH THE ENFORCEMENT DIRECTORATE'S ORD ER DATED 27.6.2002, IT APPEARS THAT THE ORDER WAS BASICALLY PASSED TO SHOW THAT NO PAYMENT THROUGH HAWALA OR THE LIKE MODE WAS MADE TO THE NRI SH. SUBHASH SETHI OUTSIDE INDIA IN CONTRAVENTION OF FOR EIGN EXCHANGE ITA NO.4659/DEL/2004 8 REGULATIONS. IN THIS ORDER OF THE DIRECTORATE, IT H AS BEEN OBSERVED THAT 'SH. SUBASH SETHI IN HIS LETTER DATED 7.8. 95 HAS C LEARLY SUBMITTED THAT HE HAS NOT MADE ANY GIFT TO ANY PERSON IN INDIA OUT OF HIS SAID NRE ACCOUNT AS HE HAD NOT REMITTED ANY MONEY FROM ABROA D INTO THIS ACCOUNT', THE ORDER OF THE ED ALSO THROWS LIGHT ON THE FACT THAT THE NRE ACCOUNT NO. 320169733 OF SH. SUBASH SETHI WITH AMERICAN EXPRESS BANK, NEW DELHI WAS ACTUALLY BEING OPERATED BY ONE SH. UMESH MAHNDIRALTA. THE A O ON PERUSAL OF THE SAID B ANK ACCOUNT FOUND THAT THERE WAS REGULAR CASH DEPOSITS MADE IN THE SAID NRE ACCOUNT OF SH. SUBASH SETHI AND THE AMOUNTS WERE UT ILIZED FOR ISSUING MCS AND DDS. ON SUCH DD NO. 78428 DATED 9.7.93 O F RS. 10 LACS WAS MADE IN THE NAME OF APPELLANT. FROM THE ABOVE, IT IS OBVIOUS THAT SH. SUBASH SETHI HAS NOT GIVEN ANY GIFTS TO ANY PERSON IN INDIA. THUS, THE GIFT OF RS. 10 LACS CLAIMED TO HAVE BEEN RECEIVED BY THE APPELLANT FROM SH. SETHI IS OBVIOUSLY BOGUS. IT IS ALSO COMMON KNOWLEDGE THAT THE APPELLANT MUST HAVE PAID SOME PREMIUM FOR ARRANGING THIS BOGU S GIFT. THUS, THE ADDITION OF RS. 11 LACS ( RS. 10 LAKHS BOGUS GIFT + 1 LAKH PREMIUM) IS UPHELD AND GROUNDS OF APPEAL NO.5, 6 AND 7 ARE HERE BY REJECTED. AS DISCUSSED IN PRECEDING PARAGRAPHS, THE AO MADE T HE ASSTT. AT RS.11 LAKHS AND TAXED IT AT THE MAXIMUM RATE OF 40% BECAUSE THE APPELLANT COULD NOT FILE ANY EVIDENCE OF THE ORIGIN AL RETURN OF INCOME. THE ID.AR, HOWEVER, IN THE SUBMISSIONS MADE DURING THE APPELLATE PROCEEDINGS, HAS STATED THAT THE AO IN HIS COMMENTS HAS STATED THAT THE RETURNED INCOME OF RS. 75,140/- IS REQUIRED TO BE ADDED BACK TO THE INCOME OF RS. 11 LACS AS ASSESSED BY THE AO. TH EREFORE, ASSESSED INCOME IS REQUIRED TO BE ENHANCED BY RS.75,140/-. THE APPELLANT WAS REQUIRED BY ME TO FILE COUNTER COMMENTS ON THIS SUB MISSION OF THE AO. THE APPELLANT HAS REQUESTED THAT THE AO SHOULD BE DIRECTED TO COMPUTE/REVISE THE INCOME ACCORDINGLY AND TAX THE S AME AS PER THE RATES APPLICABLE AND NOT THE MAXIMUM RATE I.E. @ 4 0%). IN VIEW OF THE ABOVE, INCOME OF THE APPELLANT IS ENHAN CED TO RS.11,75,140/- AND THE AO IS DIRECTED TO TAX THE SA ME AS PER THE TAX RATES APPLICABLE FOR THE YEAR UNDER APPEAL. 7. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.4659/DEL/2004 9 8. LD. A.R. AT THE OUTSET INVITED OUR ATTENTION TO SYNOPSIS FILED BY HIM AND ALSO SUBMITTED THAT HE WILL BE MAKING REFERENCE TO THE PAPER BOOK FILED BY REVENUE. LD. A.R. FURTHER SUBMITTED THAT GROUND S NO.1, 2 & 6 RELATE TO LEGAL ISSUE OF WHICH IS AGITATED BY APPELLANT ON VA RIOUS COUNTS. HE SUBMITTED THAT SERVICE OF NOTICE U/S 148 WAS NOT AC CORDING TO LAW CONTAINED IN ORDER V RULE 20 OF CPC AND IN THIS RESPECT, HE I NVITED OUR ATTENTION TO PAPER BOOK PAGE 20 OF REVENUES PAPER BOOK WHERE A COPY OF NOTICE DATED 29.05.2001 WAS PLACED. INVITING OUR ATTENTION TO T HE DATE OF NOTICE, LD. A.R. SUBMITTED THAT AT THE BACK OF NOTICE DATED 29.05.20 01 THE INSPECTOR HAD MENTIONED THAT HE HAD MADE VARIOUS REPEATED VISITS TO SERVE THE NOTICE BUT THE NOTICE COULD NOT BE SERVED AS THE ASSESSEE HAD GONE OUT. LD. A.R. SUBMITTED THAT ON THE SAME DATE I.E. ON 29.05.2001, THE INSPECTOR WAS AUTHORIZED TO SERVE THE NOTICE BY AFFIXTURE AND INV ITED OUR ATTENTION TO PAPER BOOK PAGE 19 WHERE A COPY OF ORDER V UNDER RULE 20 OF CPC WAS PLACED. HE SUBMITTED THAT BEFORE TAKING ACTION UNDER RULE 2 0 OF ORDER V THE COURT HAVE HELD THAT CERTAIN CONDITIONS MUST BE MET WHICH INCLUDE THAT THE COURT SHOULD REASONABLY BE SATISFIED THAT ASSESSEE WAS RE MAINING OUT OF HOUSE FOR THE PURPOSE OF AVOIDING SERVICE OF NOTICE AND FURTH ER IT SHOULD BE SATISFIED THAT SUMMONS CANNOT BE ISSUED IN ORDINARY COURSE AN D THERE MUST BE BASIS ON RECORD ON THE BASIS OF WHICH ACTION CAN BE TAKEN. HE SUBMITTED THAT SATISFACTION OF COURT FOR MAKING ORDER V UNDER RULE 20 CONTEMPLATES OBJECTIVE SATISFACTION AND RELEVANT MATERIAL MUST E XIST TO JUSTIFY THE CONCLUSION. HE SUBMITTED THAT MERE FACT THAT NOTIC E COULD NOT BE SERVED, WOULD NOT LEAD TO CONCLUSION THAT ASSESSEE WAS KEEP ING AWAY FOR THE PURPOSE OF AVOIDING SERVICE AND THAT FOR ANY OTHER REASON, THE SUMMON COULD NOT BE SERVED. HE ARGUED THAT BETWEEN 29.05.2001 AND 31.0 5.2001THE NOTICE SERVER ITA NO.4659/DEL/2004 10 IS STATED TO HAVE VISITED THE HOUSE OF ASSESSEE SEV ERAL TIMES. EVERY TIME, WHEN SERVER VISITED, IT WAS INFORMED THAT THE ASSES SEE HAD GONE OUT. HE ARGUED THAT FOR THE PURPOSE OF SERVING NOTICE, THE NOTICE SERVER SHOULD HAVE GONE LIKE A CREDITOR AND HE SHOULD HAVE EFFECTIVELY SERVED THE NOTICE. HE SUBMITTED THAT ON 29.05.2001 ITSELF, THE SAID ORDER UNDER RULE V WAS PASSED WHICH ITSELF INDICATES THAT NOTICE SERVER NEVER VIS ITED THE ASSESSEE AND ALL PAPER WORK WAS DONE IN THE OFFICE ITSELF TO PROVE T HAT NOTICE SERVER HAD MADE VARIOUS ATTEMPTS AND THIS FACT IS FURTHER PROVED FR OM THE FACT THAT THE NOTICE OF AFFIXTURE WAS NOT DISPLAYED ON THE NOTICE BOARD OF INCOME TAX DEPARTMENT WHICH IS THE REQUIREMENT OF LAW. 9. HE ARGUED THAT BEFORE SUBSTITUTE SERVICE AS PROV IDED IN ORDER V RULE 20 OF CPC IS PASSED, IT IS THE DUTY OF DEPARTMENT TO D ISCHARGE THE ONUS TO PROVE THAT THE AUTHORITY HAD THE REASON TO BELIEVE THAT T HE ASSESSEE WAS KEEPING OUT OF WAY FOR THE PURPOSE OF AVOIDING SERVICE AND THIS WAS ONLY REASON TO COME TO THE CONCLUSION THAT NOTICE WAS NOT SERVED IN THE ORDINARY COURSE. IN VIEW OF ABOVE, IT WAS ARGUED THAT ORDER DIRECTING SUBSTI TUTES SERVICE WAS NOT IN ACCORDANCE WITH LAW AND RELIANCE WAS PLACED ON THE FOLLOWING JUDGEMENTS:- I) SATISH CONSTRUCTION CO. VS ALLAHABAD BANK AIR 19 99 MP 21, 23. II) KUNJ BEHARI VS ITO 139 ITR 73 10. COMING TO ANOTHER LEGAL ASPECT, LD. A.R. SUBMIT TED THAT REOPENING ITSELF WAS BAD IN LAW AS THE ACTION U/S 148 WAS APP ROVED ON 29.05.2001 AND WAS ALLEGED TO HAVE BEEN SERVED BY A.O. ON 31.05.20 01, WHEREAS THE A.O. RECEIVED THE SANCTION FOR ISSUE OF NOTICE ON 01.06. 2001 AS IS APPARENT FROM PAPER BOOK PAGE 22. LD. A.R. FURTHER ARGUED THAT THE REASONS RECORDED AS CONTAINED IN REVENUES PAPER BOOK PAGE 17 DO NOT CO NTAIN ANY MATERIAL TO SHOW NEXUS WITH THE FIRM BELIEF THAT SOME INCOME HA D ESCAPED ASSESSMENT. ITA NO.4659/DEL/2004 11 HE SUBMITTED THAT REASONS WERE RECORDED ON THE BASI S OF SOME REPORT RECEIVED FROM ADIT OF INVESTIGATION WING CARRIED OU T BY ADIT, GHAZIABAD. HE SUBMITTED THAT ENTIRE REASONS REVEALED THAT THER E WAS NO MATERIAL TO INDICATE THAT THERE WAS ESCAPEMENT OF APPELLANTS I NCOME. HE SUBMITTED THAT REASONS RECORDED ARE QUITE VAGUE AND CANNOT BE THE BASIS FOR REOPENING OF ASSESSMENT. HE SUBMITTED THAT THE REASONS RECORDED INDICATE THAT THERE WAS NO APPLICATION OF MIND AS THE SAME WERE BASED ON TH E BASIS OF REPORT RECEIVED FROM ADIT AND THERE IS NO APPLICATION OF M IND BY A.O. LD. A.R. SUBMITTED THAT HON'BLE SUPREME COURT IN THE CASE OF M/S. GANGA SARAN & SONS (P) LTD. VS ITO REPORTED AT 130 ITR 01 HAD SAI D THAT THE WORDS REASON TO BELIEVE ARE STRONGER THAN WORD SATISFACTION AND TO BELIEVE MUST NOT BE ARBITRARY OR IRRATIONAL AND IT MUST BE REASONABLE A ND BE BASED ON REASON WITH RELEVANT MATERIAL ON RECORD. INVITING OUR ATTENTIO N TO NOTICE U/S 148, LD. A.R. SUBMITTED THAT MULTIPLICITY OF ASSESSEE MENTIO NED IN THE NOTICE ITSELF SHOWS THAT A.O. HAS MECHANICALLY FOLLOWED FOR ISSUI NG NOTICE U/S 148 AND HAS NOT APPLIED HIS MIND. RELIANCE IN THIS RESPECT WAS PLACED ON THE CASE LAW OF SARTHAK SECURITIES (P) LTD. DECIDED BY HONB LE DELHI HIGH COURT. INVITING OUR ATTENTION TO A FURTHER DEFECT IN THE A FFIXTURE OF NOTICE, LD. A.R. SUBMITTED THAT THERE IS NO WITNESS EVIDENCING THE S O CALLED AFFIXTURE AND NOTHING IS MENTIONED REGARDING TIME OF AFFIXTURE AN D EXACT LOCATION OF AFFIXTURE. HE FURTHER ARGUED THAT AFFIXTURE WAS DO NE ON 31.05.2001 WHEREAS THE ORDER WAS PASSED ON 29.05.2001 AND IN BETWEEN T HIS PERIOD, IT IS NOT KNOWN WHETHER ANY EFFORTS WERE MADE TO LOCATE THE A SSESSEE AND SERVE THE NOTICE. 11. LD. A.R. FURTHER ARGUED THAT NOTICE U/S 148 IS FURTHER INVALID ON THE GROUND THAT REASONS WAS NOT PROVIDED U/S 148 WITHIN STIPULATED PERIOD AND ITA NO.4659/DEL/2004 12 RATHER THE COPY OF REASON WAS OBTAINED BY ASSESSEE BY FILING A LETTER DATED 31.01.2007 AND, THEREFORE, ALSO THE REOPENING IS BA D IN LAW. RELIANCE IN THIS RESPECT WAS PLACED ON THE DECISION OF ITAT DECISION IN THE CASE OF BALVANT RAO BHARGAVA VS ITO IN I.T.A.NO.4806/. DATED 14.11 .2011. LD. A.R. FURTHER ARGUED THAT THE A.O. HAD NOT APPLIED HIS MI ND AND RATHER ISSUED NOTICE IN PURSUANCE OF DIRECTIONS FROM HIGHER AUTHO RITIES AND IN THIS RESPECT HE INVITED OUR ATTENTION TO PAPER BOOK PAGE 14 WHER EIN A COPY OF LETTER ADDRESSED TO A.O. WRITTEN BY ADIT ROHTAK WAS PLACED . HE SUBMITTED THAT SENIOR OFFICERS DIRECTED THE A.O. AND THEREFORE, TH E WHOLE ACTION OF RECORDING THE REASONS ISSUED AND NOTICE U/S 148 FRAMING REOPE NING ORDER MAKING AN ADDITION ON ACCOUNT OF GIFT WHICH HAS BEEN DONE IN PURSUANCE OF WILL OF HIGHER AUTHORITIES AND, THEREFORE THE SAME WAS VOID AB-INITIO AND ILLEGAL. 12. REGARDING MERITS, LD. A.R. SUBMITTED THAT THE D ONOR HAD FILED AN AFFIDAVIT STATING THE FACTUM OF GIFT AND THERE WAS A GIFT DEED WHICH WAS EXECUTED BETWEEN DONOR AND DONEE AND IN THIS RESPEC T, OUR ATTENTION WAS INVITED TO PAPER BOOK PAGES 11-12. HE FURTHER SUBM ITTED THAT PAPER BOOK PAGES 14-15 IS A COPY OF CHEQUE AND PAPER BOOK PAGE S 16-24 IS COPY OF PASSPORT OF DONOR AND PAPER BOOK 13 IS CERTIFICATE FROM BANK CERTIFYING THAT THE AMOUNT WAS OUT OF NRE ACCOUNT OF DONOR. IN VIE W OF ABOVE DOCUMENTS, LD. A.R. SUBMITTED THAT THE ASSESSEE HAD FURNISHED ALL THE DOCUMENTS DEMONSTRATING THE GIFT WAS A GENUINE GIFT AND WAS R ECEIVED THROUGH BANKING CHANNEL FROM A NRE ACCOUNT OF A DONOR WHO HAPPENED TO BE A RELATIVE. LD. A.R. TOOK US TO PAPER BOOK PAGES 36-40, 57-63 WHERE IN COPY OF DETAILED SUBMISSIONS MADE BEFORE A.O. AND LD. CIT(A) WERE PL ACED. THEREFORE HE ARGUED THAT ON MERITS ALSO, THE ASSESSEE HAS A STRO NG CASE AND THE GIFT IS LIABLE TO BE ACCEPTED. ITA NO.4659/DEL/2004 13 13. LD. D.R. ON THE OTHER HAND SUBMITTED THAT THOUG H THE A.O. SEEMS TO HAVE RECEIVED THE PERMISSION FROM HIGHER AUTHORITIE S ON 01.06.2001 THROUGH LETTER BUT THE FACT REMAINS THAT A.O. MUST HAVE OBT AINED VERBAL PERMISSION THROUGH TELEPHONE OR BY HAND AND FORMAL PERMISSION WAS RECEIVED AFTERWARDS AND, THEREFORE, IT CANNOT BE SAID THAT T HE NOTICE U/S 148 WAS ISSUED BEFORE THE APPROVAL WAS OBTAINED. IN RESPECT OF SE RVICE OF NOTICE, LD. CIT(A) HAD REMANDED BACK THIS ISSUE TO A.O. AND HA D OBTAINED REMAND REPORT AND THEN DECIDED THE ISSUE AFTER RECORDING E XTENSIVE FINDINGS. HE FURTHER SUBMITTED THAT UNDER THE PROVISIONS OF SECT ION 148, THE REQUIREMENT IS THAT NOTICE NEEDS TO BE ISSUED WITHIN PRESCRIBED TIME, WHEREAS AS PER REQUIREMENTS OF SECTION 143(2), IT IS MANDATORY TO SERVE NOTICE WITHIN PRESCRIBED PERIOD. IN THIS RESPECT, HE INVITED OUR ATTENTION TO PAGE 4 OF LD. CIT(A) ORDER AND INVITED OUR ATTENTION TO BACK PAGE OF NOTICE WHERE NOTICE SERVER HAD MENTIONED THAT ON 29.05.2001, HE HAD VIS ITED THE ASSESSEE MANY TIMES BUT THE ASSESSEE WAS NOT AVAILABLE. HE SUBMI TTED THAT NOTICE SERVER IS NOT REQUIRED TO NOTE DOWN TIME OF EVERY VISIT AND I T IS SUFFICIENT COMPLIANCE WHEN HE MADE REPORT THAT HE COULD NOT FIND ASSESSEE FOR SERVICE OF NOTICE AND, THEREFORE A.O. HELD THAT NOTICE COULD NOT BE S ERVED IN AN ORDINARY WAY AND THAT IS WHY HE MADE AN ORDER UNDER RULE V FOR S ERVING THE NOTICE BY AFFIXTURE. 14. AS REGARDS THE ARGUMENT OF LD. A.R. THAT HIGHER AUTHORITIES HAD DIRECTED TO ISSUE NOTICE, LD. D.R. SUBMITTED THAT H IGHER AUTHORITIES WHILE GIVING PERMISSION/ SANCTION TO ISSUE NOTICE GENERAL LY GUIDE, DIRECT AND THERE IS NOTHING WRONG IN IT. ONLY ON THE BASIS OF SOME WORDING, IT CANNOT BE SAID THAT A.O. HAD INITIATED ON THE BASIS OF DIRECTIONS BY HIGHER AUTHORITIES. REGARDING ARGUMENT REGARDING MULTIPLICITY OF ASSESS EES AS MENTIONED IN THE ITA NO.4659/DEL/2004 14 NOTICE U/S 148 LD. D.R. SUBMITTED THAT THE SECOND N AME IS THE NAME OF BROTHER OF ASSESSEE AND THESE TWO HAD RECEIVED GIFT S AND MENTIONING OF TWO NAMES ON THE SAME NOTICE DOES NOT AMOUNT TO NON APP LICATION OF MIND. LD. D.R. FURTHER RELIED UPON THE PROVISIONS OF SECTION 292B AND ARGUED THAT NO NOTICE WILL BE INVALID IN VIEW OF ANY DISCREPANCY I N A SUMMON AND THEREFORE LD. D.R. HEAVILY RELIED ON THE ORDER OF LD. CIT(A) IN THIS RESPECT. 15. REGARDING MERITS, LD. D.R. SUBMITTED THAT DONOR SANJAY SETHI HAD STATED THAT HE HAD NOT MADE ANY GIFT TO ANY PERSON AND IN THIS RESPECT, HE INVITED OUR ATTENTION TO LD. CIT(A)S ORDER WHERE H E HAS REFERRED TO THE PROCEEDINGS IN THE CASE OF HIS BROTHER SHRI VED PRA KASH CHUG. HE FURTHER SUBMITTED THAT IN THE CASE OF SHRI VED PRAKASH CHUG , THE PROCEEDINGS ATTAINED FINALITY AS THE ASSESSEE HAD NOT MADE ANY APPEAL. HE SUBMITTED THAT THE FACTS IN BOTH THE CASES ARE EXACTLY SIMILAR. T HEREFORE ALSO, HE SUBMITTED THAT ADDITION ON MERITS NEEDS TO BE SUSTAINED. ON A QUESTION BY BENCH TO LD. A.R. REGARDING THE STATUS OF PROCEEDINGS IN THE CAS E OF SHRI VED PRAKASH CHUG LD. A.R. STATED THAT HE WAS NOT AWARE REGARDIN G THE CASE OF SHRI VED PRAKASH CHUG. HOWEVER, LD. D.R. STATED THAT IN THA T CASE LD. CIT(A) HAS UPHELD THE ACTION OF A.O. AND ASSESSEE HAS NOT CHAL LENGED THE ACTION OF LD. CIT(A) AND THEREFORE, THE PROCEEDINGS IN THAT CASE HAD ATTAINED FINALITY. 16. WE HAVE HEARD THE PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. AS REGARDS LEGAL GROUNDS TAKEN BY ASSES SEE REGARDING SERVICE OF NOTICE U/S 148, WE FIND THAT LD. CIT(A) AFTER OBTAI NING REMAND REPORT FROM A.O. HAS PASSED A DETAILED AND EXHAUSTIVE ORDER. T HE RELEVANT FINDINGS OF LD . CIT(A) ARE REPRODUCED BELOW: REGARDING THE SERVICE OF NOTICE, IT HAS BEEN CLAIM ED THAT N NOTICE WAS SERVED JUPON THE APPELLANT ON 31 ST OF MAY 2001. IT HAS BEEN ARGUED THAT IT WAS THE DUTY OF THE REVENUE TO ESTAB LISH THAT THE SERVICE ITA NO.4659/DEL/2004 15 OF A NOTICE WAS MADE ON THE APPELLANT ITSELF OR ON SOMEONE DULY AUTHORIZED BY HIM IN THAT BEHALF. THE LD. A.R. F URTHER ARGUED THAT THE IMPUGNED NOTICE U/S 148 WAS ISSUED ON THE LAST DATE OF LIMITATION, WHICH COULD NOT HAVE, IN ANY CASE, BEEN SERVED ON T HE APPELLANT 011 THE SAME VERY DAY. ACCORDINGLY, IT WAS ARGUED THAT THE SERVICE BEYOND THE LIMITATION PERIOD SHALL NOT SAVE THE SAME FROM BAR OF LIMITATION. COMING TO THE SERVICE BY AFFIXTURE, IT WAS SUBMITTE D THAT THE SERVICE BY AFFIXTURE COULD ONLY BE RESORTED TO IF NONE OF THE OTHER MODES OF SERVICE WERE PRACTICAL. IT WAS CLAIMED THAT SERVICE BY AFFIXTURE COULD NOT BE RESORTED TO IN THE FIRST PLACE. ON THE BASIS OF THESE SUBMISSIONS, IT WAS PLEADED THAT NOTICE U/S 148 SHOULD BE QUASHE D. COPY OF THESE SUBMISSIONS WAS FORWARDED TO THE AO F OR HIS COMMENTS. IN HIS COMMENTS, IT HAS BEEN STATED BY 'T HE AO THAT NOTICE U/S 148 WAS ISSUED WITH THE PRIOR- APPROVAL OF THE ADDL. COMMISSIONER OF I. TAX, ROHTAK RANGE, ROHTAK GRANT ED VIDE HIS LETTER DATED 29.5.2001. THE SERVICE OF NOTICE WAS MADE BY REGD. A.D. POST WHICH WAS RECEIVED BACK WITH THE FOLLOWING REMARKS OF THE POSTAL AUTHORITIES :- ''ADDRESSEE NOT ATTENDED AFTER DELIVERY OF NOTICE H ENCE RETURNED TO SENDER AS UNCLAIMED' THEN THE NOTICE WAS AGAIN SERVED BY AFFIXTURE ON 31 .5.2001 BY THE NOTICE SERVER AND INSPECTOR AS THE NOTICE SERVER HA S REPORTED ON 29.5.2001 THAT THE ASSESSEE WAS NOT AVAILABLE AT HI S RESIDENTIAL ADDRESS AFTER REPEATED VISITS BY THE NOTICE SERVER. THEREAFTER, THE THEN AO PASSED ORDER UNDER RULE 20 OF ORDER V OF TH E C.P.C 1908 TO SERVE THE NOTICE BY AFFIXTURE. ON THE BASIS OF THES E FACTS, IT HAS BEEN PLEADED BY THE A.O. THAT THE NOTICE WAS SERVED UPON THE APPELLANT PROPERLY. THE AO ALSO POINTED OUT THAT THE APPELLAN T HAS NOT FURNISHED ANY EVIDENCE OF HAVING FURNISHED THE ORIGINAL RETU RN, EITHER DURING THE ASSTT. PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS . REGARDING THE LEGALITY OF NOTICE ISSUED U/S 148, TH E AO HAS STATED THAT THE NOTICE WAS SERVED AFTER RECEIVING DEFINITE INFO RMATION FROM VARIOUS AUTHORITIES AND AFTER RECORDING THE REASONS IN WRITING AND AFTER OBTAINING NECESSARY APPROVAL FROM THE ADDI.CI T. THEREFORE, IT WAS ARGUED THAT THE NOTICE U/S 148 WAS ISSUED LEGAL LY AND SERVED PROPERLY. ITA NO.4659/DEL/2004 16 THE APPELLANT WAS AFFORDED AN OPPORTUNITY TO FILE H IS COUNTER COMMENTS. THE ID.AR OF THE APPELLANT VIDE HIS LETTE R DATED 4.8.2004 HAS POINTED OUT THE FOLLOWING DISCREPANCIES :- 'I) THE ADDL. COMMISSIONER AT I. TAX, ROHTAK VIDE LETTER DATED 25.5.2001 HAD SENT ON INTIMATION DIRECTING TO ISSUE NOTICE U/S 148 011 THE BASIS OF CERTAIN INFORMATION ALLEGED TO BE IN POSSESSION OF THE DEPARTMENT. II) THIS LETTER WAS DULY RECEIVED IN THE INCOME-T AX OFFICE, (SONIPAT ON 20.5.2001. III) ON THE BASIS OF THE DIRECTION THE AO HAS ALLE GEDLY SENT THE REASONS FOR REOPENING THE PROCEEDINGS U/S 148 S TRONGLY ON 25.5.2004 ITSELF. IV) THESE REASONS WERE APPROVED BY THE ADDL. COMM ISSIONER OF I. TAX, ROHTAK RANGE, ROHTAK VIDE HIS OFFICE LET TER NO. 672 DT. 29.5.2001 WHICH IS RECEIVED BY THE AO ALLEGEDLY ON 31.5.2001. V) SIR, ONE MORE IMPORTANT FACT WHICH NEED YOUR K IND CONSIDERATION THAT THE STAMP OF THE RECEIVING OFFIC E WAS OF DT. 1.6.2001. VI) THE AO HAS RECEIVED THE PRIOR APPROVAL ON 31.5. 2001 OR ON 1.6.2001 WHEREAS NOTICE U/S 148 WAS ISSUED ON 29 .5.2001. VII) THE NOTICE SERVER HAS REPORTED ON 29.5.2001 I TSELF THAT ASSESSEE WAS NOT AVAILABLE AT HIS RESIDENCE AFTER R EPEATED VISITS BY TILE NOTICE SERVER. SIR, YOUR HONOUR WILL AGREE THAT THERE IS NO LAW IN INDIA, WHICH REQUIRES THE ASSESSEE TO BE PRESENT AT HIS KNOWN AD DRESS ALL TIME TO FACILITATE THE SERVICE OF NOTICE BY THE I. T DEPART MENT ON ANY DATE CONVENIENT TO THE DEPARTMENT OFFICIALS. VIII) THE AO I.E. THE DCIT, LNV. CIRCLE, PANIPAT PA SSED THE ORDER UNDER RULE 20 OF ORDER V OF THE CPC, 1908 TO SERVE THE NOTICE BY AFFIXTURE ON 29.5.2001 ITSELF. ITA NO.4659/DEL/2004 17 IX) THE THEN A.O. HAD SENT THE NOTICE BY REGD. POST ON 31.5.2001 TO BE SERVED WITHIN TIME LIMITATION OF EV ENING OF 31.5.2001. X) THE FIXTURE WAS RESTORED BY THE THEN AO HAD SENT THE NOTICE BY REGD. POST EITHER TO BE SERVED OR COME BA CK WITHOUT SERVERS. XI) THE NOTICE SENT BY REGD. POST WAS RECEIVED UNSE RVED ON 01.06.2001. ON THE BASIS OF THESE SUBMISSIONS, IT WAS ARGUED BY THE LD.A.R. THAT THE RE-ASSESSMENT INITIATED NOW WAS TOTALLY UNTENAB LE IN LAW AND DESERVES TO BE QUASHED. THE MATTER HAS BEEN CONSIDERED. THE RELEVANT ASSTT. RECORD HAS ALSO BEEN PERUSED. IT IS SEEN THAT A LETTER DATED 2 3/24.05.2001 WAS SENT BY THE ADDL. DIRECTOR OF INCOME-TAX (INV.), HA RYANA, ROHTAK TO THE AO HAVING JURISDICTION OVER THE CASE OF THE APP ELLANT AND VIDE THIS LETTER THE AO WAS INFORMED THAT THE APPELLANT HAS R ECEIVED A GIFT FOR RS. 10,00,000/- FROM SH. SUBASH SETHI (NRI) AND MAN Y DOCUMENTS INCLUDING THE STATEMENT OF THE APPELLANT RECORDED O N 04.05.1998 WAS ENCLOSED ALONG WITH THIS LETTER. THIS LETTER WAS R ECEIVED IN THE OFFICE OF THE AO ON 2 .5.2001. THE AO RECORDED THE REASONS FOR REOPENING THE CASE ON 25.5.2001 AND A PROFORMA FOR OBTAINING APPROVAL OF THE ADD!. COMMISSIONER WAS SENT TO THE ADDL.CIT ON 25. 01.2001 ITSELF. APPROVAL OF THE ADDL.CIT HAS BEEN GRANTED ON 29.5. 2001 AND THE AO ISSUED NOTICE U/S 148 ON THAT VERY DATE I.E. 29.5.2001. ONE COPY OF THE NOTICE WAS SENT THROUGH THE REGD. POST AND ANOTHER WAS GIVEN TO THE NOTICE SERVER FOR PERSONAL SERVICE. S INCE THE APPELLANT WAS NOT AVAILABLE AT HIS RESIDENCE, THE NOTICE WAS DULY SERVED UPON THE APPELLANT ON 31.5.2001 BY AFFIXTURE. THEREFORE, IT IS HELD THAT THE NOTICE U/S 148 HAS BEEN ISSUED IN ACCORDANCE WITH L AW ON THE BASIS OF INFORMATION RECEIVED FROM THE ADDL. DIRECTOR OF I. TAX (LNV. ), ROHTAK AND THE SAME HAS DULY BEEN SERVED BY POST AND BY AF FIXTURE. THEREFORE, GROUNDS OF APPEAL NO,1, 2, 3,4 AND 8 ARE REJECTED. ITA NO.4659/DEL/2004 18 17. WE FIND THAT LD. CIT(A) HAS PASSED A SPEAKING A ND WELL REASONED ORDER. 18. AS REGARDS THE ARGUMENTS OF LD. A.R. REGARDING SUFFICIENCY OF REASONS RECORDED, WE FIND THAT AT THE TIME OF ISSUE OF NOTICE, THE DETAILED REASONING IS NOT REQUIRED AS DETAILED REASONING CAN ONLY BE GIVEN AFTER HEARING THE ASSESSEE. THE A.O. HAD DEFINITE INFORM ATION THROUGH INVESTIGATION WING OF THE DEPARTMENT THAT ASSESSEE ALONG WITH HIS BROTHER HAD TAKEN BOGUS GIFTS THEREFORE, THIS REASON ITSELF IS SUFFICIENT TO ASCERTAIN THE CORRECT FACTS. AT THE TIME OF ISSUANCE OF NOTICE, THE A.O. ONLY NEEDS A PRIMA FACIE VIEW THAT SOME INCOME HAD ESCAPED ASSESSMENT. 18.1 AS REGARDS THE ARGUMENT OF LD. A.R. THAT THE R EVENUE HAD NOT MADE NECESSARY EFFORTS TO SERVE NOTICE IN THE ORDINARY C OURSE BEFORE TAKING RESORT TO NOTICE BY AFFIXTURE, WE FIND THAT NOTICE SERVER HAS CLEARLY SUBMITTED A REPORT THAT NOTICE COULD NOT BE SERVED DESPITE VARI OUS VISITS. IT IS NOT REQUIRED TO NOTE DOWN TIME AND DATE OF VISIT ON EVE RY VISIT. IF HE SUBMITS A REPORT REGARDING NON SERVICE OF NOTICE, IT IS A SUF FICIENT COMPLIANCE FOR MAKING ALTERNATIVE ARRANGEMENT OF SERVING THE NOTIC E. 18.2. THE OTHER ARGUMENT OF LD. A.R. THAT NOTICE WA S ISSUED BEFORE SANCTION, IS ALSO DEVOID OF MERIT AS RECEIPT OF SA NCTION BY A.O. ON 01.06.2001 BY POST DOES NOT MEAN THAT A.O. WAS NOT CONVEYED SANCTION TELEPHONICALLY OR OTHERWISE. ITA NO.4659/DEL/2004 19 18.3 IN VIEW OF THE ABOVE WE ARE OF THE CONSIDERED VIEW THAT NOTICE U/S 148 HAS BEEN RIGHTLY SERVED UPON THE ASSESSEE AND, THER EFORE, GROUNDS NO.1, 2 AND 7 ARE DISMISSED. 19. AS REGARDS MERITS OF THE CASE, WE FIND THAT IT HAS BEEN ESTABLISHED THAT NRE ACCOUNT OF DONOR SHRI SUBHASH SETHI WAS BEING U SED FOR THE PURPOSE OF MAKING BOGUS GIFTS AS THE ALLEGED DONOR HAS HIMSELF STATED BEFORE ENFORCEMENT DIRECTORATE THAT HE HAD NOT MADE ANY GI FT TO ANY PERSON IN INDIA OUT OF HIS SAID NRE ACCOUNT AS HE HAS NOT REMITTED ANY MONEY FROM ABROAD INTO THIS ACCOUNT. AS NOTED BY LD. CIT(A) AT PAGE 10, A LETTER DATED 07.08.1995 WRITTEN BY ALLEGED DONOR SHRI SUBHASH SE THI DENYING ANY GIFT TO ANY PERSON IN INDIA FINDS MENTION IN THE ORDER OF E NFORCEMENT DIRECTORATE DATED 27.06.2002. WE FURTHER FIND THAT IN THE CASE OF BROTHER OF ASSESSEE, SHRI VED PRAKASH CHUG, SIMILAR ADDITION HAS BEEN MA DE AND WAS CONFIRMED BY LD. CIT(A) VIDE HIS ORDER DATED 01.08.2003. AS PER THE STATEMENT OF LD. A.R., HE WAS NOT AWARE OF THE STATUS OF ANY APPEAL FILED BY SHRI VED PRAKASH CHUG BEFORE THE TRIBUNAL WHEREIN LD. D.R. CATEGORIC ALLY STATED THAT THE ISSUE HAD ATTAINED FINALITY IN THAT CASE AS NO APPEAL WAS PREFERRED BY SHRI VED PRAKASH CHUG BEFORE THE TRIBUNAL. THE APPELLANT AL SO COULD NOT ESTABLISH AS TO WHAT WAS THE RELATIONSHIP BETWEEN DONOR AND APPE LLANT, AND WHAT WAS THE OCCASION ON WHICH GIFT WAS ALLEGED TO HAVE BEEN GIV EN. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF LD. CIT(A) AS REGARDS MERITS OF THE CASE. THEREFORE, ADDITION SUSTAINED BY LD. CIT(A) IS CONFIRMED AND IN VIEW OF ABOVE, GROUNDS N O.3, 4, 5, 7 & 8 ARE DISMISSED. ITA NO.4659/DEL/2004 20 20. GROUND NO.9 IS WITH RESPECT TO CHARGING OF INTE REST U/S 234B AND INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WHICH ARE PREMATURE AND DO NOT REQUIRE ANY ADJUDICATION. 21. IN VIEW OF ABOVE, APPEAL FILED BY ASSESSEE IS D ISMISSED. 22. ORDER PRONOUNCED IN THE OPEN COURT ON 02 ND JUNE, 2015. SD./- SD./- ( G. C. GUPTA) (T.S. KAPOO R) VICE PRESIDENT ACCOUNTANT MEMBER DATE: 02 ND JUNE, 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 26/5 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 27,28, SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 2/6/15 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 2/6 SR. PS/PS 7 FILE SENT TO BENCH CLERK 2/6 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER