Sneh Lata Agarwal, Hathras V. I.T.O., Ward-3(3), Hathras

ITA 47/AGR/2012

• Counselvise Citation: 4720314 RSA 2012
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-06-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 06-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Keywords: Reopening of assessment; Unexplained investment; Gift; Procedural lapse; Reason to believe
• Section: 143(3); 142(1); 133A; 147; 68; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, SMC, AGRA BEFORE SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.47/AGR/2012 ASSESSMENT YEAR : 2000-01 SNEH LATA AGARWAL, VS. INCOME TAX OFFICER, PROP. M/S. GLOBES INDIA TRADING CO., WARD 3(3), H ATHRAS. MURSAN GATE, HATHRAS. (PAN: ABPPA 1258 G). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ GARG, ADVOCATE RESPONDENT BY : SHRI A.K. SHARMA, JR. D.R. DATE OF HEARING : 13.06.2012 DATE OF PRONOUNCEMENT : 22.06.2012 ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 25.11.2011 PASSED BY THE LD. CIT(A), GHAZIABAD FOR ASSESSMENT YEAR 2000-01 ON THE FOLLOWING GROUNDS :- 1. BECAUSE THE LD. CIT(A) HAS ERRED BOTH IN LAW AN D ON FACTS IN CONFIRMING ASSESSING OFFICERS ACTION OF INITIATION OF PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, ISSUE OF NOTICE U/S 148 OF THE ACT AND THE COMPLETION OF ASSESSMENT WHICH IS INVALID AND WITHO UT JURISDICTION. 2. BECAUSE THE ASSESSMENT COMPLETED U/S 147/143(3) OF THE ACT IS WRONG, BAD IN LAW, AGAINST THE FACTS OF THE CASE AN D WITHOUT JURISDICTION ON THE FOLLOWING GROUNDS :- I) NO PERSONAL SATISFACTION OF THE ASSESSING OFFICE R IN FORMING HIS OWN BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. ITA NO.47/AGR/2012 A.Y. 2000-01 2 II) NO ORIGINAL RETURN WITH THE ASSESSING OFFICER A T THE TIME OF SO CALLED REASONS RECORDED BY HIM AND THE ISSUE OF NOT ICE U/S 148 OF THE ACT. III) REASON RECORDED NOT PROVIDED TO THE ASSESSEE. IV) NO NOTICE U/S 143(2) OF THE ACT ISSUED AFTER FI LING THE RETURN IN RESPONSE TO NOTICE U/S 148 OF THE ACT. THE LD. CIT (A) HAS GROSSLY ERRED IN IGNORING/REJECTING THE APPELLANTS SUBMISSION AND THE LEGAL POSITION ON THE ISSUE. 3. BECAUSE CONSIDERING THE FACTS OF THE CASE AND TH E LEGAL POSITION THE PROCEEDINGS INITIATED U/S 147 OF THE ACT AND TH E CONSEQUENT ASSESSMENT FRAMED U/S 147/143(3) OF THE ACT IS WITH OUT JURISDICTION, INVALID AND DESERVES TO BE ANNULLED/QUASHED. 4. BECAUSE THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACT IN CONFIRMING THE ADDITION OF RS.2,00,000/- MADE BY TH E ASSESSING OFFICER U/S 68 OF THE ACT IGNORING/REJECTING THE AP PELLANTS SUBMISSION. 5. BECAUSE UNDER THE FACT AND CIRCUMSTANCES OF THE CASE THE ADDITION BEING WRONG AND ILLEGAL DESERVES TO BE DEL ETED. 6. BECAUSE THE ADHOC DISALLOWANCE OUT OF TELEPHONE EXPENSES AND MISC. EXPENSES IS WRONG, ILLEGAL AND EXCESSIVE. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE SAME. 2. THE LD. AUTHORISED REPRESENTATIVE WHILE SUMMARIZ ING THE GROUNDS OF APPEAL SUBMITTED THAT GROUND NOS.1 TO 3 ARE LEGAL GROUND I N RESPECT OF REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER). GROUND NOS.4 & 5 IS IN RESPECT OF MERIT OF THE CASE CONFIRMING THE ADDITION OF RS.2,00,000/- ON ACCOUNT OF GIFT UNDER SECTION 68 O F THE ACT. GROUND NO.6 IS IN RESPECT OF ADHOC DISALLOWANCE OUT OF TELEPHONE AND MISCELLANEOUS EXPENSES. ITA NO.47/AGR/2012 A.Y. 2000-01 3 3. THE BRIEF FACTS OF THE CASE ARE THAT ON THE BASI S OF INFORMATION RECEIVED FROM C.I.T., RANGE-4, AGRA THAT THE ASSESSEE RECEIVED BO GUS GIFTS, THE ASSESSING OFFICER (A.O.) ISSUED NOTICE UNDER SECTION 148 OF THE ACT. IT WAS NOTICED THAT THE ASSESSEE RECEIVED GIFT OF RS.2,00,000/- FROM SHRI D.K. AGARW AL AND SMT. SEEMA RANI. THE A.O. NOTED THAT THE ASSESSEE DID NOT PRODUCE THE DO NOR FOR EXAMINATION. THE A.O. MADE ENQUIRIES THROUGH INSPECTOR AND NOTICED THAT T HE DONORS WERE NOT FOUND AT THE ADDRESS GIVEN BY THE ASSESSEE. THE A.O. VIDE ORDER SHEET DATED 19.01.2006 ASKED THE ASSESSEE TO PRODUCE DONOR FOR EXAMINATION BUT T HE ASSESSEE FAILED TO COMPLY WITH THE SAME. IN ABSENCE OF DETAILS FILED, THE A. O. FOUND THAT THE ASSESSEE HAS FAILED TO PROVE CREDITWORTHINESS OF THE DONORS. HE , THEREFORE, MADE ADDITION OF RS.2,00,000/-. 4. THE ASSESSEE CHALLENGED THE ORDER OF THE A.O. BE FORE THE CIT(A). THE ASSESSEE ALSO RAISED ADDITIONAL GROUND CHALLENGING PROCEEDINGS UNDER SECTION 147 OF THE ACT. THE CIT(A) ADMITTED THE LEGAL ADDITION AL GROUND AND CALLED FOR THE REMAND REPORT FROM THE A.O. THE CIT(A) REJECTED TH E ADDITIONAL GROUND AS UNDER:- (CIT(A) PARAGRAPH NO. 8.2) 8.2 ADDITIONAL GROUNDS OF APPEAL REGARDING ISSUE O F NOTICE U/S 143(2): THIS GROUND IS ALSO REJECTED BECAUSE NOTICE U/S 143 (2) WAS INDEED ISSUED ON 01.07.2005. THE PURPOSE OF NOTICE U/S 143(2) IS TO MAKE THE ASSESSEE AWARE THAT SCRUTINY PROCEEDINGS A RE TO BE CARRIED ITA NO.47/AGR/2012 A.Y. 2000-01 4 OUT HIS/HER CASE. ALSO PROVISO (B) OF SECTION 148( 1) FURTHER VALIDATES SUCH NOTICE. FURTHERMORE, THE FACT REMAINS THAT AS SESSEE DID NOT FILE ANY RETURN IN RESPONSE TO NOTICE U/S 148. 5. THE CIT(A) ALSO DECIDED GROUND NOS.1 TO 4 IN WHI CH THE ASSESSEE HAS CHALLENGED THE PROCEEDINGS UNDER SECTION 147 OF THE ACT ON ACCOUNT OF PROVIDING SATISFACTION. THE CIT(A) HAS DECIDED THESE GROUNDS OF APPEAL AS UNDER :- CIT(A) PAGE NOS.9 & 10) I DO NOT AGREE WITH APPELLANTS CONTENTION. IN TH E PRESENT CASE INFORMATION WAS RECEIVED BY THE AO; WHO IS AT HATHR AS, FROM ADDL. CIT, R-4, AGRA. INFORMATION CLEARLY MENTIONED THAT SURVEY U/S 133A HAD BEEN CONDUCTED AT THE PREMISES OF SHRI D.K. AGA RWAL, CA, DURING WHICH CERTAIN DOCUMENTS HAD BEEN FOUND, WHICH INDIC ATE GIFS OF THE BOGUS TRUSTS CREATED BY SHRI D.K. AGARWAL. ALL THE TRUSTS AND THEIR ADDRESSES INDICATE TOWARDS THE MACHINATIONS/SCAM PL ANNED AND EXECUTED BY SH. D.K. AGARWAL. THIS LIST OF THE BOG US GIFT ALSO CONTAINED GIFT OF RS.2 LAKH RECEIVED BY THE ASSESSE E. I FIND THAT INCRIMINATING INFORMATION WAS RECEIVED BY THE ITO FROM AN AUTHENTIC SOURCE, WHICH WAS THE ORIGIN ON A CCOUNT OF SURVEY OPERATION DURING WHICH INCRIMINATING DOCUMENTS WERE FOUND. THEREFORE, SUCH AN INFORMATION IS RELEVANT MATERIA L IN POSSESSION OF THE AO. IT IS ALSO CLEAR THAT THE AO HAS REACHED A BONAFIDE CONCLUSION, ON THE BASIS OF SUCH MATERIAL; REGARD ING ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSESSEE. IN SUCH FACTS AND CIRCUMSTANCES; PROCEEDINGS U/S 14 7 R.W. 147 ARE HELD TO BE PERFECTLY VALID AND LEGAL. I RELY O N FOLLOWING CASE LAWS: (I) RAYMOND WOOLEN MILLS, 236 ITR 34 (SC) (II) RAJESH JHAVERI STOCK BROKER PVT. LTD., 291 ITR 500 (SC) THE COURT CASES CITED BY THE ASSESSEE ARE NOT APPLI CABLE TO THE PRESENT CASE. IN CASE OF M/S DHARIYA CONSTRUCTION; THE ISSUE WAS AS TO WHAT EXTENT OPINION OF THE DVO CAN BE TAKEN AS I NFORMATION. IN THE CASE OF SIGNATURE HOTEL PVT. LTD., THE PROCEEDINGS U/S 147 WERE QUESTIONABLE ON GROUND THAT INFORMATION RECEIVED WA S GENERAL. ITA NO.47/AGR/2012 A.Y. 2000-01 5 IN THE PRESENT CASE; INFORMATION IS NOT ONLY SPECIF IC BUT ALSO ON BASIS OF SURVEY OPERATION. IF EVEN SUCH AUTHENTIC AND SPECIFIC INFORMATION ARE ALSO NOT ACTED UPON, ALL PROCESSES OF LEGAL VERIFICATION AND INVESTIGATION IN RESPECT OF UNACCOUNTED MONEY W OULD COLLAPSE!! THE APEX COURT HAS AGAIN AND AGAIN MADE IT CLEAR TH AT WHAT IS IMPORTANT AT THE POINT OF ISSUANCE OF NOTICE U/S 14 8, IS AVAILABILITY OF INFORMATION ON THE BASIS OF WHICH THE AO CAN REACH A BONAFIDE BELIEVE REGARDING ESCAPEMENT OF INCOME; NEITHER SUFFICIENCY NOR ACCURACY OF INFORMATION AND BELIEVE CAN BE QUESTIONED AT TH IS MOMENT, BECAUSE THOSE CAN BE EXAMINED ONLY DURING ACTUAL AS SESSMENT PROCEEDINGS. SO, I HOLD THAT AOS ACTION U/S 147 WAS LEGAL AND A PPROPRIATE. THUS, ALL THE GROUNDS OF APPEAL REGARDING INVALIDIT Y OF PROCEEDINGS U/S 147 ARE REJECTED. 6. IN RESPECT OF MERIT OF THE CASE, THE CIT(A) UPHE LD THE ORDER OF THE A.O. AS UNDER :- (CIT(A) PAGE NO.11) I FIND THAT THE INFORMATION AND EVIDENCE EMANATING FROM THE AFOREMENTIONED SURVEY OPERATION DID POINT OUT TOWAR DS POSSIBILITY OF THE SAME BEING A BOGUS GIFT. FURTHER, DURING ASSES SMENT PROCEEDINGS, THE ASSESSEE COMPLETELY FAILED IN ITS DUTY TO EXPLA IN THE GIFT AS GENUINE. HE WAS DUTY BOUND TO PRODUCE SHRI D.K. AGARWAL BECA USE IT WAS ON RECORD SHRI D.K. AGARWAL HAS MACHINATED SUCH SCHEME OF BOGUS GIFT. IN VIEW OF SUCH SCAM AND INCRIMINATION, THE AO HAD SPECIALLY REQUESTED THE ASSESSEE TO PRODUCE THE DONOR; BUT AS SESSEE FAILED TO PRODUCE SH. D.K. AGARWAL. IN FACT NO GIFT DEED WAS ALSO PRODUCED !! NO RELEVANT DETAILS OR EVIDENCES HAVE BEEN FURNISHE D EVEN DURING APPELLATE PROCEEDINGS. CONSEQUENTLY THE ADDITION IS HELD TO BE JUSTIFIED. IT IS APPARENT THAT APPELLANT HAS BROUGHT BACK ITS UNACCOUNTED MON EY WITH THE HELP OF GIFT SCAM OPERATED BY SH. D.K. AGARWAL. ADDITION OF RS.2 LAKH IS UPHELD. ITA NO.47/AGR/2012 A.Y. 2000-01 6 7. THE LD. AUTHORISED REPRESENTATIVE REITERATED THE SUBMISSIONS WHICH WERE MADE BEFORE THE A.O. IN RESPECT OF LEGAL GROUND CHA LLENGING INITIATION OF PROCEEDINGS UNDER SECTION 147 ON THE GROUND THAT NO NOTICE UNDER SECTION 143(2) HAVE BEEN ISSUED BY THE A.O. LD. AUTHORISED REPRES ENTATIVE FURTHER SUBMITTED THAT THERE IS NO DISPUTE REGARDING THE FACT THAT THE NOT ICE ISSUED UNDER SECTION 148 OF THE ACT DATED 30.03.2005 WAS FOLLOWED BY THE NOTICES DA TED 01.07.2005 ISSUED UNDER SECTION 143(1)/AND 143(2) OF THE ACT. THE ASSESSEE DID NOT FILE RETURN TILL 01.07.2005 AGAINST THE NOTICE UNDER SECTION 148 OF THE ACT. A LETTER DATED 08.07.2005 WAS FILED STATING THAT THE RETURN ORIGIN ALLY FILED MAY BE TAKEN AS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF TH E ACT. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT AFTER 08.07.2005 NO N OTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. THE LD. AUTHOR ISED REPRESENTATIVE SUBMITTED THAT FILING SUCH LETTER AMOUNTS TO FILING OF RETURN . IN SUPPORT OF THIS, HE RELIED UPON THE FOLLOWING DECISIONS:- 1. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ANAN D KUMAR SHARMA VS. ACIT, 198 ITR 121 (ALL). 2. TIWARI KANHAIYA LAL & ORS. VS. CIT & ORS., 154 I TR 109 (RAJ). 3. CWT VS. HASNATE BURHANIYAH FIDAIYAH WAKF, 147 IT R 509 (BOM). 8. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE A.O. DID NOT ISSUE NOTICE UNDER SECTION 143(2) AFTER FILING A LETTER S TATING THAT THE ORIGINAL RETURN MAY BE TAKEN AS RETURN FILED AGAINST NOTICE UNDER SECTI ON 148 OF THE ACT. THE LD. ITA NO.47/AGR/2012 A.Y. 2000-01 7 AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ISSUE OF NOTICE UNDER SECTION 148(2) IS MANDATORY. HE RELIED UPON THE FOLLOWING DECISIO NS:- 1) CIT VS. RAJEEV SHARMA, 336 ITR 678 (ALL.). 2) ITAT COCHIN BENCH (THIRD MEMBER) IN THE CASE OF V.R. SREEKUMAR VS. ITO, 136 ITD 257 (TM). 3) ITAT AGRA BENCH IN THE CASE OF ACIT VS. BAIKUNTH NATH SINGHAL, 89 ITD 109. 9. THE LD. AUTHORISED REPRESENTATIVE CHALLENGED THE PROCEEDINGS UNDER SECTION 147 OF THE ACT ON THE GROUND THAT REASON TO BELIEVE BY THE A.O. WAS NOT THE BELIEF OF THE A.O. BUT IT WAS A BORROWED BELIEF/SATISFACTI ON. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT UNDER THESE CIRCUMSTA NCES, THE REOPENING PROCEEDINGS UNDER SECTION 147 OF THE ACT IS NOT A L EGAL PROCEEDINGS. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT ON IDENTIC AL SET OF FACTS, THE I.T.A.T., AGRA BENCH AND DELHI BENCH HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE LD. AUTHORISED REPRESENTATIVE RELIED UPON THE FOLLO WING DECISIONS :- 1) ITAT AGRA BENCH IN THE CASE OF ITO VS. VIPIN KUM AR AGARWAL & OTHERS IN ITA NO.171, 173, 174/AGR/2008. 2) ITAT DELHI BENCH IN THE CASE OF ITO VS. VIJENDRA KUMAR IN ITA NO.1202/DEL/2009. 3) ITAT DELHI BENCH IN THE CASE OF ITO VS. AJAY KUM AR IN ITA NO.1196/DEL/2009. 4) ITAT DELHI BENCH IN THE CASE OF ITO VS. BRIJ MOH AN IN ITA NO.1527/DEL/2009. ITA NO.47/AGR/2012 A.Y. 2000-01 8 10. AS REGARDS MERIT OF THE CASE, THE LD. AUTHORISE D REPRESENTATIVE REITERATED THE SUBMISSIONS WHICH WERE MADE BEFORE THE CIT(A) AND S UBMITTED THAT ON IDENTICAL SET OF FACTS WHEREIN GIFT WAS RECEIVED FROM SHRI D. K. AGARWAL, I.T.A.T., AGRA BENCH HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESS EE. HE RELIED UPON THE FOLLOWING DECISIONS:- 1) ITA NO.312/AGR/2006 IN THE CASE OF MUKESH KUMAR AGARWAL VS ITO. 2) ITA NO.679/AGR/2008 IN THE CASE OF PIYUSH GOYAL VS. ITO. 3) ITA NO.484/AGR/2007 IN THE CASE OF SMT. KIRTI GA RG VS. ITO. 4) ITA NO.35/AGR/2009 IN THE CASE OF ABHISHEK GOYAL VS. ITO. 5) ITA NO.36/AGR/2009 IN THE CASE OF RAM DAS GOYAL HUF VS. ITO. 6. ITA NO.468/AGR/2008 IN THE CASE OF SMT. MANU VAR SHNEY VS. ITO. 11. THE LD. AUTHORISED REPRESENTATIVE ALSO SUBMITTE D THAT THE LATEST ORDER OF I.T.A.T. IN THE CASES OF DR. R.N. GUPTA TECHNICAL & EDUCATIONAL SOCIETY AND SHRI MANAK CHAND GARG ARE DISTINGUISHABLE ON FACTS AS TH E ISSUE INVOLVED WAS DIFFERENT THAN THE ISSUE INVOLVED IN THE CASE UNDER CONSIDERA TION. 12. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF CIT(A) AND SUBMITTED THAT NOTICE UNDER SECTION 143(2) HAS BEEN ISSUED TO THE ASSESSEE ON 17.05.2005 WHICH IS NOT A DISPUTED FACT. LD. DEPAR TMENTAL REPRESENTATIVE SUBMITTED THAT THE FILING OF LETTER BY ASSESSEE DAT ED 08.07.2005 IS A PART OF ASSESSMENT PROCEEDINGS AND ONCE THE A.O. HAS LEGALL Y ACQUIRED JURISDICTION BY ISSUING NOTICE UNDER SECTION 148 AND 143(2) OF THE ACT, NO FURTHER SECOND NOTICE UNDER SECTION 148(2) IS REQUIRED. HOWEVER, LD. DEP ARTMENTAL REPRESENTATIVE ITA NO.47/AGR/2012 A.Y. 2000-01 9 ADMITTED THAT AFTER GIVING LETTER DATED 08.07.2005 WHEREIN HE ASSESSEE STATED THAT ORIGINAL RETURN FILED MAY BE TAKEN AS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT AND NO NOTICE UNDER SECTION 148 WAS ISSUED. 13. IN RESPECT OF MERIT OF THE CASE, LD. DEPARTMENT AL REPRESENTATIVE SUBMITTED THAT THE A.O. MADE ENQUIRY THROUGH INSPECTOR AND HE DID NOT FIND CORRECT ADDRESS OF THE DONOR. HE FURTHER SUBMITTED THAT THE ASSESSEE DID NOT PRODUCE THE DONOR FOR EXAMINATION. HE ACCORDINGLY HELD THAT THE ORDER OF CIT(A) MAY BE UPHELD. 14. I HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE ASSESSEE HAS RAISED A NUMBER OF LEGAL GROUNDS AS WE LL AS GROUNDS ON MERIT. I WOULD LIKE TO DECIDE ONE OF THE LEGAL GROUND NO.2(IV) WHI CH READS AS UNDER :- IV) NO NOTICE U/S 143(2) OF THE ACT ISSUED AFTER F ILING THE RETURN IN RESPONSE TO NOTICE U/S 148 OF THE ACT. THE LD. CIT (A) HAS GROSSLY ERRED IN IGNORING/REJECTING THE APPELLANTS SUBMISS ION AND THE LEGAL POSITION ON THE ISSUE. 15. THE ADMITTED FACTS OF THE CASE ARE THAT THE CAS E OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 AND ORIGINALLY NOTICE UNDER SECTI ON 148 OF THE ACT DATED 30.03.2005 WAS ISSUED WHICH FOLLOWED NOTICES UNDER SECTION 143(2)/143(1) DATED 01.07.2005. THE ASSESSEE VIDE LETTER DATED 08.07.2 005 STATED THAT THE RETURN ORIGINALLY FILED MAY BE TAKEN AS RETURN FILED IN RE SPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE CRUX OF THE CONTENTION OF THE ASSE SSEE IS THAT AFTER 08.07.2005 ITA NO.47/AGR/2012 A.Y. 2000-01 10 NOTICE UNDER SECTION 143(2) OF THE ACT HAS NOT BEEN ISSUED. THE CIT(A) DID NOT ACCEPT THE ASSESSEES CONTENTION THAT THE REQUEST V IDE LETTER DATED 08.07.2005 THAT RETURN ORIGINALLY FILED MAY BE TAKEN AS RETURN FILE D IN RESPONSE TO NOTICE UNDER SECTION 148, IS A RETURN FILED BY THE ASSESSEE. TH E FINDING OF THE CIT(A) THAT UNDER THE CIRCUMSTANCES, THE FACT REMAINS THAT THE ASSESS EE DID NOT FILE ANY RETURN IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. T HEREFORE, THERE WAS NO QUESTION OF ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, TWO IMPORTANT ISSUES EME RGE, ONE IS THAT WHETHER THE REQUEST OF THE ASSESSEE VIDE LETTER DATED 08.07.200 5 THAT ORIGINALLY RETURN FILED MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE UN DER SECTION 148 OF THE ACT IS A RETURN IN RESPONSE TO NOTICE UNDER SECTION 148 OF T HE ACT. THE SECOND ONE IS THAT WHETHER AFTER RECEIVING SUCH NOTICE/LETTER FROM THE ASSESSEE WHETHER THE A.O. IS BOUND TO ISSUE NOTICE UNDER SECTION 143(2) OF THE A CT. I FIND THAT ON IDENTICAL SET OF FACTS, THE I.T.A.T. COCHIN BENCH IN THE CASE OF V.R . SREEKUMAR VS. ITO, 136 ITD 257 (COCHIN)(TM) HAS DECIDED BOTH THE ISSUES. THE RELEVANT FACTS OF THAT CASE DECIDED BY I.T.A.T., COCHIN AND FINDING THEREON ARE REPRODUCED AS UNDER :- 3. THE RELEVANT FACTS AS NARRATED IN THE ORDER OF THE LD. CIT(APPEALS) ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THIS ASSESSMENT YEAR DECLARING TOTAL INCOME OF RS. 1,43, 760/- AND AGRICULTURAL INCOME OF RS. 5,000 ON 31-10-2000. THE RETURN WAS PROCESSED U/S. 143(1) ON 19-1-2001. SUBSEQUENTLY, N OTICE U/S.148 DATED 7-4-2006 WAS ISSUED ON THE GROUND THAT THE CA SH FLOW STATEMENT FILED ON 8-9-2005 FOR THE ASSESSMENT YEAR 2001-02 S HOWS AN AMOUNT OF RS. 1,15,948/- AS CREDIT OF PROFIT FROM PROPRIET ARY BUSINESS AND THE SAME HAS BEEN CREDITED TO HIS CURRENT ACCOUNT AND H AS NOT BEEN ITA NO.47/AGR/2012 A.Y. 2000-01 11 WITHDRAWN THEREFROM. HENCE, UNEXPLAINED INVESTMENT ON THIS ACCOUNT COMES TO RS. 1,15,948. FURTHER DURING THE ASSESSMEN T YEAR 2000-01 THE ASSESSEE HAD PURCHASED A PROPERTY IN MG ROAD, T HRISSUR FOR A CONSIDERATION OF RS.14,64,380 AND THE ASSESSEE HAD SOLD A PROPERTY AT PALAKKAD FOR A CONSIDERATION OF RS. 38,64,000 BUT N O INCOME ON ACCOUNT OF CAPITAL GAIN WERE RETURNED IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2000-01. THEREFORE, THE ASSESSING O FFICER WAS OF THE VIEW THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME AND HAS ALSO FILED INACCURATE PARTICULARS. HENCE, THIS FIRS T NOTICE U/S. 148 WAS ISSUED ON 7-4-2006. IN RESPONSE TO THIS, ASSESSEE F ILED A RETURN OF INCOME SHOWING THE SAME INCOME AS SHOWN IN THE ORIG INAL RETURN FILED ON 22-5-2006. THEREAFTER, NOTICE U/S. 143(2) DATED 14-7-2006 WAS ISSUED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , IT WAS NOTICED THAT 148 NOTICE SHOULD BEEN ISSUED AFTER OBTAINING THE APPROVAL OF JT. CIT AS PER SECTION 151(2) OF THE ACT. FOR WANT OF A PPROVAL, THE PROCEEDINGS INITIATED WERE DROPPED BY THE ASSESSING OFFICER. HENCE, THE FIRST NOTICE U/S. 148 WAS DROPPED FOR WANT OF A PPROVAL FROM JT. COMMISSIONER OF INCOME-TAX. 4 . THE ASSESSING OFFICER ISSUED FRESH NOTICE AFTER O BTAINING DUE APPROVAL OF THE JT. COMMISSIONER OF INCOME-TAX ON 3 0-11-2006. NOTICE U/S.148 WAS ISSUED ON 4-12-2006 AS PER ORDER SHEET ENTRY DATED 4-12-2006. THIS WAS SERVED ON THE ASSESSEE ON 7-12- 2006. THEREAFTER, THE ASSESSING OFFICER JUMPED AND NOTICE U/S. 142(1) WAS ISSUED ON 5- 10-2007. THE CASE WAS HEARD, PRE-ASSESSMENT NOTICE WAS ISSUED, ASSESSEE'S LETTER OBJECTING TO THE PRE-ASSESSMENT N OTICE, HAS BEEN FILED. THEREAFTER, ON 28-12-2007, ORDER WAS PASSED U/S.143 (3). FINDING- 9. TO RESOLVE THE DIFFERENCE BETWEEN THE HON'BLE MEMBERS ON THE POINT AT ISSUE, IN MY OPINION IT IS THE FORE MOST THING TO FIND OUT WHETHER ANY RETURN OF INCOME WAS THERE BEF ORE THE ASSESSING OFFICER IN RESPONSE TO THE NOTICE ISSUED U/S. 148, AFTER OBTAINING THE NECESSARY SANCTION (148 NOTICE ISSUED ON 4.12.2006). I FIND FROM THE ASSESSMENT ORDER THAT I N RESPONSE TO THIS FRESH NOTICE U/S. 148, DATED.30.11.2006, THE A SSESSEE HAS FILED THE SAME COPY OF THE RETURN AS FILED ORIGINAL LY ALONG WITH COPIES OF STATEMENT OF ACCOUNTS ON 15.10.2007. NOW, I HAVE TO CONSIDER WHETHER THIS IS SUFFICIENT COMPLIANCE AS E NVISAGED UNDER THE IT ACT. IT IS NOT UNCOMMON THAT AN ASSESS EE IN RESPONSE TO NOTICE U/S.148 INTIMATES THE ASSESSING OFFICER THAT ITA NO.47/AGR/2012 A.Y. 2000-01 12 THE ORIGINAL RETURN FILED MAY BE TREATED AS ONE FIL ED IN RESPONSE TO NOTICE U/S.148. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF TIWARI KANHAIYA LAL V. CIT [1985] 154 ITR 109/[1 984] 19 TAXMAN 497 , HAS OBSERVED AS UNDER: 'THE NOTICE ISSUED U/S.148 OF THE IT ACT, 1961 REQU IRING THE ASSESSEE TO FILE AFRESH RETURN CARRIED WITH IT AN OBLIGATION TO FILE THE FRESH RETURN IN PURSUANCE OF THE SAID NOTICE. IN CASE THE ASSESSEE FEELS THAT IT IS NOT N ECESSARY TO FILE AFRESH RETURN AND THAT THE EARLIER RETURN F ILED BY HIM U/S.139 OF THE ACT SHOULD BE TREATED AS THE RET URN FOR THE PURPOSE OF REASSESSMENT U/S. 147 AND 148 OF THE ACT, HE MAY INFORM THE ITO OF HIS DECISION TO TREAT HIS PREVIOUS RETURN AS THE RETURN FILED IN RESPONSE TO THE NOTICE U/S.148 OF THE ACT. IN THAT EVENT, THE EARLI ER RETURN WILL BE TREATED AS THE FRESH RETURN SUBMITTED IN RE SPONSE TO THE NOTICE U/S.148 OF THE ACT.' IN SUCH CASES THE DUTY OF THE ASSESSING OFFICER IS TO ISSUE NOTICE U/S. 143(2) BEFORE PROCEEDING IN THE MATTER. 10. THE SPECIAL BENCH OF THE ITAT, DELHI IN THE CA SE OF RAJ KUMAR CHAWLA V. ITO [2005] 277 ITR (AT) 225/94 ITD 1/ 1 SOT 934 / 145 TAXMAN 12 (MAG.) HAS OBSERVED AS UNDER: 'THE RETURN FILED PURSUANT TO A NOTICE UNDER SECTIO N 148 OF THE INCOME-TAX ACT, 1961, MUST BE ASSUMED AND TREATED TO BE A RETU RN FILED UNDER SECTION 139 OF THE ACT AND THE ASSESSMENT MUST THEREAFTER B E MADE UNDER SECTION 143 OR 144 OF THE ACT AFTER COMPLYING WITH ALL THE MANDATORY PROVISIONS. ACCORDINGLY, IT IS INCUMBENT UPON THE ASSESSING AUT HORITY TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE PERIOD A S STIPULATED IN THE PROVISO THEREUNDER. NO ASSESSMENT CAN BE MADE IF TH E NOTICE UNDER SECTION 143(2) OF THE ACT IS NOT SERVED.' IN THIS CASE ON HAND, THE ASSESSEE IN RESPONSE TO T HE NOTICE U/S.148 DATED.30.11.2006 HAS FILED THE SAME COPY OF THE RET URN AS ORIGINALLY FILED ALONG WITH COPIES OF STATEMENTS OF ACCOUNT. W HEN A SIMPLE LETTER REQUESTING THE ASSESSING OFFICER TO TREAT THE ORIGI NAL RETURN CAN BE IN COMPLIANCE WITH NOTICE U/S.148 IS SUFFICE UNDER THE LAW, THE PRESENT ASSESSEE IS ON A BETTER FOOTING BECAUSE HE HAS FILE D A COPY OF THE ITA NO.47/AGR/2012 A.Y. 2000-01 13 ORIGINAL RETURN ALONG WITH THE STATEMENTS OF ACCOUN T. THE ASSESSING OFFICER ALSO HAS ACTED ON SUCH LETTER WHILE FRAMING THE ASSESSMENT U/S.147, IN VIEW OF THE FOLLOWING OBSERVATIONS IN T HE ASSESSMENT ORDER: 'IN RESPONSE TO THE NOTICE U/S.148 DATED 30-11-2006 ISSUED, AFTER OBTAINING APPROVAL FROM THE APPROPRIATE AUTHORITY, THE ASSESSEE HAS FILED THE SAME COPY OF RETURN AS RETURNED ORIGINALL Y ALONG WITH COPY OF STATEMENTS OF ACCOUNTS ON 15-10-2007.' FURTHER EXTRACT FROM PAGE NO. 9 OF ASST ORDER WHICH IS REPRODUCED BELOW IS ALSO RELEVANT: 'AFTER EXAMINING THE DETAILS AND OTHER EVIDENCES FI LED, THE FOLLOWING ADJUSTMENTS ARE ALSO MADE TO THE INCOME RETURNED.' 'INCOME AS RETURNED BY THE ASSESSEE RS. 1,43,760/- ADD:------------' 11. THUS, I FIND FORCE IN THE CONTENTION OF THE AS SESSEE'S COUNSEL THAT THE ASSESSING OFFICER WAS CONSCIOUS THAT HE IS ACTI NG ON THE COPY OF THE ORIGINAL RETURN FILED IN RESPONSE TO NOTICE U/S .148. IN VIEW OF THIS FACT, IT IS OBVIOUS THAT THERE WAS A RETURN BEFORE THE ASSESSING OFFICER IN RESPONSE TO NOTICE U/S.148 AND HE HAS PROCEEDED FROM THE FIGURES OF SUCH RETURN ONLY TO COMPLETE THE ASSESSMENT. IF THE ASSESSEE HAS INTIMATED THAT THE ORIGINAL RETURN MAY BE TREATED A S ONE FILED IN RESPONSE TO NOTICE U/S.148 AND IF THE ASSESSING OFF ICER IS DUTY-BOUND TO ISSUE NOTICE U/S. 143(2) IN SUCH CASES, DEFINITE LY IN THIS CASE ON HAND, THE ASSESSING OFFICER OUGHT TO HAVE ISSUED NO TICE U/S. 143(2). IF SUCH NOTICE WAS NOT ISSUED, THE REASSESSMENT WOULD NOT BE VALID. 12. SINCE I HAVE COME TO THE CONCLUSION THAT THERE WAS A RETURN IN RESPONSE TO NOTICE U/S.148 BEFORE THE ASSESSING OFF ICER AND THE ASSESSING OFFICER ALSO HAD ACTED UPON SUCH RETURN, IT IS CRYSTAL-CLEAR LEGAL POSITION THAT THE ASSESSING OFFICER OUGHT TO HAVE ISSUED NOTICE U/S. 143(2) BEFORE PASSING THE ORDER U/S. 143(3) R. W.S. 147. ITA NO.47/AGR/2012 A.Y. 2000-01 14 13. I FIND THAT THE LEARNED JUDICIAL MEMBER HAS RIG HTLY COME TO THE ABOVE CONCLUSION AND APPLIED THE RATIO OF THE FOLLO WING DECISIONS OF THE HON'BLE SUPREME COURT: (I) R. DALMIA (SUPRA ) AND (II) HOTEL BLUE MOON (SU PRA). THE HON'BLE SUPREME COURT IN THE CASE OF R. DALMIA (SUPRA) HAS OBSERVED THAT ASSESSMENTS UNDER SECTION 143 AND ASS ESSMENTS AND REASSESSMENTS UNDER SECTION 147 ARE DIFFERENT, BUT IN MAKING ASSESSMENTS AND REASSESSMENTS UNDER SECTION 147 THE PROCEDURE LAID DOWN IN SECTIONS SUBSEQUENT TO SECTION 139, INCLUDI NG THAT LAID DOWN BY SECTION 144B, HAS TO BE FOLLOWED. THE HON'BLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA), HAS HELD THAT IF AN ASSESSMENT IS TO BE COMPLETED U /S. 143(3) READ WITH SECTION 158BC, NOTICE UNDER SECTION 143(2) SHOULD B E ISSUED WITHIN ONE YEAR FROM THE DATE OF FILING OF THE BLOCK RETUR N. OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE UND ER SECTION 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND IS NOT CURA BLE AND THEREFORE, THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) CANN OT BE DISPENSED WITH. 14. IT IS MY OPINION THAT THE LEARNED ACCOUNTANT M EMBER CAME TO A WRONG CONCLUSION THAT THERE WAS NO RETURN AT ALL BE FORE THE ASSESSING OFFICER IN RESPONSE TO NOTICE U/S.148 WHEN THE ASSE SSING OFFICER HIMSELF HAS ACTED UPON A COPY OF THE ORIGINAL RETUR N FILED BY THE ASSESSEE WHILE FRAMING THE ASSESSMENT U/S.147. I CA NNOT ENDORSE THE VIEW THAT THE ASSESSING OFFICER IS IGNORANT OF THE SECTION 144 AND IT WAS ONLY A TECHNICAL ERROR THAT A WRONG SECTION WAS QUOTED AS SECTION 143 INSTEAD OF SECTION 144. I COULD NOT FIND ANY EV IDENCE ON RECORDS TO COME TO SUCH A CONCLUSION. IN MY VIEW, THE ASSESSIN G OFFICER HAS CONSCIOUSLY MADE ASSESSMENT ORDER UNDER SECTION 143 . IF IT WAS UNDER SECTION 144, THE ASSESSING OFFICER WOULD HAVE ISSUE D A NOTICE TO THE ASSESSEE STATING THAT HE IS GOING TO COMPLETE ASSES SMENT U/S.144 BEFORE MAKING THE ASSESSMENT. 15. IN VIEW OF THE ABOVE ANALYSIS, I AM OF THE VIE W THAT SINCE THE ASSESSING OFFICER ACTED ON THE COPY OF THE RETURN F ILED BY THE ASSESSEE, (AS A STARTING POINT), IT IS THE CONSCIOUS VIEW OF THE ASSESSING OFFICER THAT THERE WAS A RETURN FILED IN RESPONSE TO NOTICE U/S.148 AND HENCE ITA NO.47/AGR/2012 A.Y. 2000-01 15 HE ACTED UPON THE SAME. THE OTHER OBSERVATIONS OF T HE LEARNED ACCOUNTANT MEMBER HAVE NO RELEVANCE WHEN I HAVE COM E TO THE CONCLUSION THAT THERE WAS A RETURN IN RESPONSE TO N OTICE U/S.148. IN THIS VIEW OF THE MATTER, I HAVE TO CONCUR WITH THE HON'BLE JUDICIAL MEMBER IN CONCLUDING THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO FRAME THE ASSESSMENT U /S. 143(3) R.W.S.147 OF T HE IT ACT WITHOUT SERVICE OF NOTICE U/S. 143(2) OF THE ACT. 16. IN THE LIGHT OF THE ABOVE ORDER OF THE I.T.A.T. (THIRD MEMBER), I FIND THAT IN THE CASE UNDER CONSIDERATION A REQUEST LETTER DATED 08.07.2005 GIVEN BY THE ASSESSEE TO THE A.O. TO TREAT THE ORIGINAL RETURN A S RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT IS IN FACT RETURN FILE D IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. APART FROM THE ABOVE ORDER OF THE I.T.A.T., THE VIEW IS FORTIFIED BY THE JUDGEMENT OF HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF ANAND KUMAR SHARMA VS. ACIT, 198 ITR 121 (ALL), TIW ARI KANHAIYA LAL & ORS. VS. CIT & ORS., 154 ITR 109 (RAJ), & CWT VS. HASNAT E BURHANIYAH FIDAIYAH WAKF, 147 ITR 509 (BOM). 17. IN THE LIGHT OF ABOVE DISCUSSIONS, I HOLD THAT THE LETTER DATED 08.07.2005 FILED BY THE ASSESSEE AMOUNTS TO FILING OF RETURN IN RESP ONSE TO NOTICE UNDER SECTION 148 OF THE ACT. IT IS SETTLED LAW THAT THE A.O. OUGHT TO HAVE ISSUED NOTICE UNDER SECTION 143(2) OF THE ACT BEFORE PASSING THE ORDER UNDER SE CTION 143(3) READ WITH SECTION 147 OF THE ACT. IN THE CASE UNDER CONSIDERATION, I T IS ADMITTED FACT THAT AFTER FILING LETTER DATED 08.07.2005 WHICH AMOUNTS TO FILING OF RETURN, THEREAFTER, THE A.O. DID NOT ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT. UNDER THE CIRCUMSTANCES, THE ITA NO.47/AGR/2012 A.Y. 2000-01 16 ASSESSMENT ORDER PASSED BY THE A.O. IS NOT IN ACCOR DANCE WITH LAW AS HE HAS FAILED TO COMPLY WITH THE MANDATORY REQUIREMENT OF ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT. IN THE LIGHT OF THE FACT, THE ASSESSME NT ORDER IS LIABLE TO BE QUASHED. I ACCORDINGLY QUASH THE ASSESSMENT ORDER AND ACCORDIN GLY ADDITION MADE IN THE RETURNED INCOME ARE DELETED IN VIEW OF THE ABOVE FA CTS. 18. SINCE I HAVE DECIDED ONE OF THE LEGAL ISSUES IN FAVOUR OF THE ASSESSEE, THEREFORE, I DO NOT THINK IT NECESSARY TO GO TO THE OTHER LEGAL GROUNDS RAISED BY THE ASSESSEE AND GROUNDS ON MERIT AS THESE BECOME ACADE MIC. I AM, THEREFORE, NOT EXPRESSING ANY OPINION ON THOSE GROUNDS OF APPEAL. 19. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D AS INDICATED ABOVE. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY