Pankaj Chhabra (HUF), New Delhi V. ITO, New Delhi

ITA 4725/DEL/2012

• Counselvise Citation: 472520114 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-08-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 05-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS RENUKA JAIN GU PTA
• Assessee Lawyers: RAJESH MOHRA
• Keywords: Gift; Validity of assessment
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC: NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER ITA NO.4725 /DEL/ 2012 (ASSESSMENT YEAR :2002-03) PANKAJ CHHABRA (HUF) VS. ITO 6A/69, WARD-26(1) WEA, NEAR CHANNA MARKET NEW DELHI NEW DELHI AAHPG5977D (APPELLANT) (RESPONDENT) ASSESSEE BY :SHRI RAJESH MOHRA, ADV. REVENUE BY : MRS. RENUKA JAIN GUPTA, SR. DR ORDER THE FIRST APPELLATE ORDER HAS BEEN IM PUGNED BY THE ASSESSEE ON SEVERAL GROUNDS INVOLVING THREE ISSUES. FIRSTLY ON THE VALIDITY OF NOTICE ISSUED U/S 148 OF THE ACT (GROUND NOS. 1 & 2), SECONDLY ON THE VALIDITY OF THE ASSESSMENT IN ABSENCE OF ISSUANCE OF NOTICE U/S 143 (2) OF THE ACT (GROUND NO.2), AND THE THIRD ISSUE INVOLVE IS AS TO WHETHER THE CLAIMED GIFTS OF RS.3 LAC IN TOTAL WAS NOT GENUINE (GROUND NOS. 4, 5 & 6). ISSUE NO.2 2. THE LD. AR HAS ADVANCED HIS ARGUMENTS ON SECOND ISSUE FIRST. HE SUBMITTED THAT SIMILAR ISSUE WAS ALSO RAISED BEFORE THE LD. CIT(A) WITH THIS CONTENTION THAT NOTICE U/S 143(2) OF THE ACT WAS NE VER ISSUED AND SERVED UPON ITA NO. 4725. DEL.2012 2 THE ASSESSEE BY THE AO DURING THE COURSE OF ASSESSM ENT PROCEEDINGS. THE LD. CIT(A) SOUGHT INFORMATION IN THIS REGARD FROM THE A O BY CALLING REMAND REPORT FROM HIM ON SUCH OBJECTION RAISED BY THE ASS ESSEE BEFORE HIM. IN THIS REMAND REPORT, THE AO WAS NOT ABLE TO DENY THE CLAI M OF NON-ISSUANCE OF NOTICE U/S 143(2) OF THE ACT AND SERVICE THEREOF UP ON THE ASSESSEE. LD. CIT (A) HAS, HOWEVER, DECIDED THE ISSUE AGAINST THE ASS ESSEE WITH THIS FINDING THAT AS PER ASSESSMENT ORDER NOTICE U/S 143(2) WAS ISSUE D AND IN RESPONSE THE COUNSEL OF THE ASSESSEE ATTENDED THE PROCEEDINGS WI THOUT OBJECTING THE ISSUANCE OF NOTICE U/S 143(2) AND SERVICE THEREOF U PON THE ASSESSEE WITHIN THE PRESCRIBED TIME LIMIT AS MANDATORY. 3. IN SUPPORT OF THE GROUNDS ON THE ISSUE S THE LD. AR REFERRED COPY OF ORDER-SHEET DATED 1/9/2011 RECORDED DURING THE ASSE SSMENT PROCEEDINGS MADE AVAILABLE AT PAGE NO. 3 & 4 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE WITH THIS CONTENTION THAT NOWHERE IT HAS BEEN MENTI ONED BY THE AO IN THE ORDER-SHEET THAT NOTICE U/S 143(2) WAS EVER ISSUED AND SERVED UPON THE ASSESSEE. THE LD. AR ALSO PLACED RELIANCE ON THE F OLLOWING DECISIONS ON THE ISSUE:- ACIT VS. HOTEL BLUE MOON, (2010) 321 ITR 362 (S.C); ALPINE ELECTRONICS ASIA PTE LTD. VS. DIRECTOR GENER AL OF INCOME TAX (2012) 341 ITR 247 (DELHI); CIT VS.. CPR CAPITAL SERVICE LTD (2011) 330 ITR 43( DELHI); CIT VS VARDHMAN STATE P. LTD (2006) 287 ITR 368 (DE LHI); CIT VS. BHAN TEXTILES P. LTD (2006) 287 ITR 370 (DE LHI); ITA NO. 4725. DEL.2012 3 CIT VS. LUNAR DIAMONDS LTD (2006) 281 ITR 1 (DELHI) , ETC. KUBER TOBACO PRODUCTS PCT. LTD. VS. DCIT, 310 ITR 3 00 (AT) (SB) CIT VS. AVI OIL INDIA PVT. LTD, 323 ITR 242 (P&H) 3. THE LD. DR ON THE OTHER HAND TRIED TO JUS TIFY ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE. HE SUBMITTED THAT THE ASSESSEE HAS PARTICIPATED IN THE ASSESSMENT PROCEEDINGS, HENCE HE CANNOT BE ALLOWED TO RAISE SUCH OBJECTION OF NON-ISSUANCE OF NOTICE U/S 143(2) OR NON-SERVICE TH EREOF UPON HIM SUBSEQUENTLY IN THE APPEALS. IN THIS REGARD, SHE H AS PLACED RELIANCE ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F AREVA T & D INDIA LTD. VS. ACIT 294 ITR 233(MAD). SHE SUBMITTED FURTHER THAT DECISION OF HONBLE DELH I HIGH COURT IN THE CASE OF ALPINE ELECTRONIC ASIA PTE LTD VS. DG OF INCOME TAX (SUPRA) IS REGARDING MANDATORY OF TIME LIMIT TO ISSUE NOTICE U/S 143(2) OF THE ACT. THE OTHER DECISIONS CITED BY THE LD. AR ARE DISTINGUISHABLE W ITH THE FACTS OF THE PRESENT CASE AS IN THE CITED DECISIONS IN MOST CASES, THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT WHEREAS THE ASSESSMENT IN THE CAS E OF PRESENT ASSESSEE HAS BEEN FRAMED U/S 147 READ WITH SECTION 143(3) OF THE ACT. 4. CONSIDERING THE ABOVE SUBMISSION AND HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON, I FIND SUBSTANCE IN THE ABOVE CONTENTI ON OF THE LD. AR AS THERE IS NOTHING COMING OUT FROM THE RECORD IN SPECIFIC TERM AS TO WHEN NOTICE U/S ITA NO. 4725. DEL.2012 4 143(2) WAS ISSUED AND AS TO WHEN IT WAS SERVED UPON THE ASSESSEE. MERE MENTIONING IN THE ASSESSMENT ORDER THAT NOTICE U/S ISSUED AND IN RESPONSE, THE COUNSEL OF THE ASSESSEE ATTENDED IS NOT SUFFICE TO FULFILL THE REQUIREMENT OF THE PROVISIONS IN THIS REGARD LAID DOWN U/S 143(2) OF T HE ACT. EVEN BEFORE THE LD. CIT(A) SIMILAR CONTENTION WAS RAISED BY THE ASSESSE E AND AO WAS GIVEN OPPORTUNITY TO REBUT THE CLAIM OF THE ASSESSEE THAT NOTICE U/S 143(2) WAS NOT ISSUED AND SERVED UPON THE ASSESSEE BUT THE AO FAI LED THERETO. THE ORDER- SHEET RECORDED DURING THE COURSE OF ASSESSMENT PROC EEDINGS MADE AVAILABLE AT PAGE NO. 3 &4 OF THE PAPER BOOK AND REMAND REPORT D ATED 8/5/2012 OF THE AO FURNISHED TO THE FIRST APPELLATE AUTHORITY IN RESPO NSE TO THE CLAIM OF THE ASSESSEE, MADE AVAILABLE AT PAGE NO. 17 OF THE PAPE R BOOK IS ALSO SILENT ABOUT THE DATE OF ISSUANCE OF NOTICE U/S 143(2) OF THE AC T AND SERVICE THEREOF UPON THE ASSESSEE. THUS, IT IS CLEAR THAT NO NOTICE U/S 143(2) WAS ISSUED OR SERVED UPON THE ASSESSEE DURING THE COURSE OF ASSESSMENT P ROCEEDING. NOW, THE QUESTION IS AS TO WHETHER IN ABSENCE OF ISSUANCE AN D SERVICE OF NOTICE U/S 143(2) OF THE ACT UPON THE ASSESSEE THE ASSESSMENT ORDER FRAMED U/S 147 READ WITH SECTION 143(3) OF THE ACT WILL VITIATE. IN TH E CASE OF ALPINE ELECTRONICS ASIA PTE LTD VS. DIRECTOR GENERAL OF INCOME TAX (SU PRA), THE HONBLE DELHI HIGH COURT HAS BEEN PLEASED TO HOLD THAT SECTION 14 3(2) OF THE ACT IS APPLICABLE TO PROCEEDINGS U/S 147 (148) OF THE ACT. THE PROVISO TO SECTION ITA NO. 4725. DEL.2012 5 148 OF THE ACT GRANTS LIBERTY TO THE REVENUE TO SER VE NOTICE U/S 143(2) OF THE ACT BEFORE PASSING THE ASSESSMENT ORDER FOR RETURN FURNISHED ON OR BEFORE OCTOBER 1 ST , 2005.IN RESPECT OF RETURNS FILED PURSUANT TO NOTI CE U/S 148 OF THE ACT AFTER OCTOBER 1 ST , 2005, IT IS MANDATORY TO SERVE NOTICE U/S 143(2) OF THE ACT WITHIN THE STIPULATED TIME LIMIT. IN OTHER WOR DS, ISSUANCE OF NOTICE U/S 143(2) IS NOT ONLY MANDATORY BUT IT IS ALSO MANDATO RY TO SERVE THE SAME UPON THE ASSESSEE WITHIN THE STIPULATED TIME LIMIT. I T HUS, DO NOT CONCUR WITH THIS SUBMISSION OF THE LD. DR THAT THE HONBLE HIGH COUR T HAS HELD THAT TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) IS ONLY MANDATORY TO FOLLOW. I DO NOT ALSO AGREE WHIT THE CONTENTION OF THE LD. AR THAT PARTIC IPATION. IN THE CASE OF CIT VS. CPR CAPITAL SERVICES LTD (SUPRA), THE HONBLE D ELHI HIGH COURT DISMISSING THE APPEAL PREFERRED BY THE REVENUE HAS BEEN PLEASED TO HOLD THAT MERE NOTING IN THE ORDER-SHEET WOULD NOT SUFFICE IN THAT CASE COPY OF THE NOTICE ISSUED U/S 143(2) OF THE ACT WAS NOT AVAILABLE ON R ECORD. IT WAS HELD THAT SINCE THE DEPARTMENT HAD FAILED TO PRODUCE THE COPY OF TH E NOTICE U/S 143(2) OF THE ACT THERE WAS NO OPTION BUT TO AGREE WITH THE FINDI NGS OF THE TRIBUNAL THAT NO SUCH NOTICE WAS PREPARED AND SERVED UPON THE ASSESS EE. IN THE ABSENCE OF FULFILLMENT OF THIS MANDATORY REQUIREMENT OF ISSUAN CE OF STATUTORY NOTICE U/S 143(2) OF THE ACT, THE TRIBUNAL HAD RIGHTLY QUASHED THE ASSESSMENT AS NULL AND VOID, HELD THE HONBLE HIGH COURT. AGAIN IN THE CA SE OF CIT VS. VARDHMAN ITA NO. 4725. DEL.2012 6 STATE (P) LTD. (SUPRA), THE HONBLE DELHI HIGH COUR T HAS BEEN PLEASED TO HOLD THAT NOTICE U/S 143(2) OF THE ACT HAD TO BE SERVED ON THE ASSESSEE AND AS THERE WAS NO MATERIAL TO SUGGEST THAT A NOTICE SENT BY SP EED POST WAS SERVED ON ANY EARLIER DATE WITHIN THE PRESCRIBED TIME LIMIT, THE HONBLE HIGH COURT DID NOT ACCEPT THE CONTENTION THAT SINCE THE NOTICE WAS DIS PATCHED BY SPEED-POST ON A DAY BEFORE THE LAST DAY OF THE PRESCRIBED TIME LIMI T, THAT SHOULD BE THE DEEMED DATE OF SERVICE. THE CASE OF THE PRESENT ASSESSEE B EFORE THE TRIBUNAL IS ON BETTER FOOTING AS IN THE PRESENT CASE, THE REVENUE HAS THOROUGHLY FAILED TO ESTABLISH AS TO WHEN NOTICE U/S 143(2) OF THE ACT W AS ISSUED AND WHEN IT WAS SERVED ON THE ASSESSEE. UNDER THESE FACTS AND CIRC UMSTANCES, I AM OF THE VIEW, THAT IN ABSENCE OF DATE OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT AND SERVICE THEREOF UPON THE ASSESSEE WITHIN THE PRESCR IBED TIME LIMIT THE ASSESSMENT FRAMED U/S 147 READ WITH 143(2) OF THE A CT CANNOT BE HELD AS A VALID ASSESSMENT. THE DECISION OF HONBLE MADRAS H IGH COURT IN THE CASE OF AREVA T & D INDIA LTD VS. ACIT (SUPRA) IS DATED 8/1 1/2006 WHEREAS DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ALPINE E LECTRONICS ASIA PTE LTD VS DIRECTOR GENERAL OF INCOME TAX (SUPRA) IS OF LAT ER DATED 24/01/2012 AND IS ALSO OF JURISDICTIONAL HIGH COURT, HENCE THIS DECIS ION IS BINDING UPON THE TRIBUNAL. THE ASSESSMENT ORDER IN QUESTION IS THUS HELD AS NULL AND VOID AND IS QUASHED AS SUCH. . SO FAR AS PROVISIONS U/S 292 BB OF THE ACT IS CONCERNED IT ITA NO. 4725. DEL.2012 7 HAS COME INTO EFFECT FROM 1/4/2008, HENCE THESE PRO VISIONS ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE PERTAINING TO THE ASSES SMENT YEAR 2002-03. CONTENTION OF THE LD. DR IN THIS REGARD THAT THE AS SESSEE CANNOT BE ALLOWED TO RAISE OBJECTION REGARDING ISSUANCE OF NOTICE U/S 14 3(2) OF THE ACT AND SERVICE THEREOF UPON THE ASSESSEE BEFORE THE APPELLATE AUTH ORITIES WHEN THE ASSESSEE HAS PARTICIPATED IN THE ASSESSMENT PROCEEDINGS, THU S DOES NOT HELD WATER. THE ISSUE IS THUS DECIDED IN FAVOUR OF THE ASSESSEE. TH E RELATED GROUND NOS. 3 IS THUS ALLOWED. ISSUE NOS. 2 & 3 5. IN VIEW OF THE ABOVE FINDING ON ISSUE NO. 1 ON THE VALIDITY OF ASSESSMENT IN QUESTION ITSELF, THE REMAINING ISSUES ON THE QUESTION OF VALIDITY OF NOTICE ISSUE U/S 148 OF THE ACT AND GENUINENESS OF THE CLAIMED GIFTS DISALLOWED BY THE AO HAVE BECOME INFRUCTUOUS. 6. IN RESULT, APPEAL IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 04 TH /10/2013. SD/- (I.C. SUDHIR) (JUDICIAL MEMBER) DATED THE 04 TH DAY OF OCTOBER , 2013 R. NAHEED COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT(ITAT), NEW DELHI. AR,ITAT ITA NO. 4725. DEL.2012 8 NEW DELHI.