Swastik Coal Corporation (India) Ltd., Indore V. The Addl. CIT Range-5, Indore

ITA 477/IND/2013

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4287 (ITAT-INDORE)
• Duration Of Justice: 7 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-03-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 14-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GIRISH AGRAWAL; NISHA LAHOTI A RS
• Keywords: Rule 8D
• Section: 143(3); 142(1); 143(1); 143(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE HONBLE MANISH BORAD, ACCOUNTANT MEMBER AND BEFORE HONBLE MADHUMITA ROY, JUDICIAL MEMBER ITA NO.477/IND/2013 ASSESSMENT YEAR 2005-06 M/S. SWASTIK COAL CORPORATION PVT. LTD, 21/3, SWASTIK HOUSE, RATLAM KOTHI, INDORE : APPELLANT PAN : AABCJ3196N V/S ACIT- RANGE-5, INDORE : RESPONDENT REVENUE BY SHRI HARSHIT BARI, SR.DR ASSESSEE BY SHRI GIRISH AGRAWAL & MISS NISHA LAHOTI, ARS DATE OF HEARING 05.04 .2021 DATE OF PRONOUNCEMENT 20 . 0 5 . 202 1 O R D E R PER MADHUMITA ROY, J.M THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER DATED 28.03.2013 PASSED BY THE LD. CIT(A)-II, INDORE ARISING SWASTIK COAL CORPORATION PVT. LTD ITA NO.477/IND/2013 2 OUT OF THE ORDER DATED 29.12.2010 PASSED BY THE LD. ACIT, RANGE-5, INDORE (M.P) U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) FOR ASSESSMENT YEAR 2008-09. ADD ITION TO THE TUNE OF RS. 1,14,00,000/- U/S 68 AND RS.4,49,316/- ON A CCOUNT OF EXPENDITURE DISALLOWED ON EXEMPTED INCOME UPON APPL ICATION OF RULE 8D HAVE BEEN CHALLENGED BEFORE US. HOWEVER, BEFORE ARGUING THE MATTER ON MERIT, THE LD. COUNSEL APPEARING FOR THE ASSESSEE RAISED PRELIMINARY OBJE CTION IN REGARD TO THE SERVING OF NOTICE U/S 143(2) OF THE ACT DATED 3 1.08.2009 WHILE INITIATING THE ASSESSMENT PROCEEDINGS. THE ASSESSE E COMPANY FILED ITS RETURN OF INCOME ON 30.09.2008. IT IS SUBMITTED BY THE LD. COUNSEL APPEARING FOR THE ASSESSEE THAT THE IMPUGN ED ASSESSMENT ORDER U/S 143(2) OF THE ACT WAS CLAIMED TO HAVE BE EN PASSED AFTER DUE PROCESS OF THE LAW BY SERVING NOTICE IN DUE TIM E IN TERMS OF PROVISO TO SECTION 143(2) BUT THE SAME HAS NOT BEEN SERVED IN TERMS OF THE PROCEDURE LAID DOWN BY THE PROVISION UNDER S ECTION 282 OF THE ACT. IN THAT VIEW OF THE MATTER, IT WAS ULTIMA TELY CONTENDED BY THE LD. AR THAT THE IMPUGNED ORDER IS BAD IN LAW A ND IS LIABLE TO BE QUASHED. SWASTIK COAL CORPORATION PVT. LTD ITA NO.477/IND/2013 3 2. ON THE CONTRARY LD. DR CONTENDED THAT THE NOTIC E DATED 03.09.2009 U/S 143(3) OF THE ACT WAS DULY DISCHARGE D THROUGH SPEED POST FOLLOWED BY ANOTHER NOTICE BY THE NOTICE SERVERS NAMELY SHRI PREM N. JOSHI ON 4.9.2009. THE PROOF OF THE T WO SERVICES ARE ON RECORD BEFORE THE REVENUE AND DULY SUBMITTED B EFORE THE LD. TRIBUNAL AND THEREFORE, ACCORDING TO THE LD. DR IT HAS BEEN ASSUMED THAT THE NOTICE SERVED WAS ENTERED IN THE S CRUTINY PENDENCY REGISTER. HENCE, THE PLEA OF THE ORDER BEI NG PASSED WITHOUT DUE PROCESS OF LAW IS NOT TENABLE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS MADE BY THE RESPECTIVE PARTIES ON THE GROUND OF MAINTAINABILITY OF THE ASS ESSMENT PROCEEDINGS. WE HAVE ALSO PERUSED THE AVAILABLE RE CORDS. THE CASE OF THE ASSESSEE IS THIS THAT THE NOTICE U/S 143(2) AND 142(1) OF THE ACT WAS RECEIVED FOR THE FIRST TIME IN 21.7.2010 BY AND UNDER THE NOTICE DATED 14.07.2010 FIXING THE DATE OF HEARING ON 12.8.2010. SUCH FACT WAS BROUGHT TO THE NOTICE OF LD. A.O BY A ND UNDER A LETTER DATED 12.8.2010 ISSUED BY THE ASSESSEE AS APPEARS A T PAGE 55 OF THE PAPER BOOK SUBMITTED BEFORE US. SUCH OBJECTION WAS ALSO FILED ON 03.09.2010 OWING TO NON AVAILABILITY OF LD. A.O. IN FACT CERTIFIED SWASTIK COAL CORPORATION PVT. LTD ITA NO.477/IND/2013 4 TRUE COPY OF THE ASSESSMENT PROCEEDINGS WAS ALSO O BTAINED FROM ACIT-5(1), INDORE WHO ISSUED THE ALLEGED FIRST NOTI CE ISSUED U/S 143(2) OF THE ACT. IT APPEARS THAT THE SAID REVENU E OFFICER HIMSELF ADMITTED THAT SAID FIRST NOTICE U/S 143(2) OF THE A CT WAS NOT SERVED ON TIME BEFORE 30.09.2009, AS IT REFLECTS AT PAGE 5 4 BEING THE MEMO DATED 30.09.2010 UNDER THE SIGNATURE OF ACIT-5(1), INDORE WRITTEN TO THE APPELLANT COMPANY. IT WAS FURTHER CONTENDED BY THE SAID REVENUE OFFICER THAT THE NOTICE U/S 143(2) OF THE A CT FOR THE ASSESSMENT PROCEEDINGS FOR THE RELEVANT ASSESSMENT YEAR WAS SENT BY SPEED POST ON 03.09.2010 VIDE DISPATCH NO.1221/0 3.09.2009 AS WELL AS THROUGH NOTICE SERVER BY THE OFFICE OF THE LD. ACIT-5(1), INDORE AND CLAIMED TO HAVE BEEN DULY SERVED UPON TH E VERY NEXT DAY I.E. 04.09.2010. THIS MEMO DATED 30.09.2010 WAS IS SUED WHILE REPLYING THE OBJECTION AS IT IS EVIDENT FROM PAGE 5 5 OF THE PAPER BOOK SUBMITTED BEFORE US. THE ASSESSEE RAISED HIS O BJECTION ON 12.08.2010 CHALLENGING THE VERACITY OF THE PROCEEDI NG SINCE THE NOTICE UNDER SECTION 143(2) AND 143(1) OF THE ACT BOTH DATED 14.07.2010 FOR ASSESSMENT YEAR 2008-09 WAS RECEIVED ONLY ON 17.07.2010. IT WAS CONTENDED BY THE ASSESSEE THAT THE SAME OUGHT SWASTIK COAL CORPORATION PVT. LTD ITA NO.477/IND/2013 5 TO HAVE BEEN SERVED U/S 143(2) OF THE ACT BEFORE 30 .09.2009. IT IS RELEVANT TO MENTION THAT THE PROVISO TO CLAUSE II S UB SECTION (2) OF SECTION 143 SPEAKS AS FOLLOWS:- PROVIDED THAT NO NOTICE UNDER THIS SUB-SECTION SH ALL BE SERVED UPON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS F ROM THE END OF FINANCIAL YEAR IN WHICH RETURN IS FURNISHED . THEREFORE, ADMITTEDLY THE NOTICE ISSUED IS BEYOND THE PERIOD AS STIPULATED UNDER PROVISO OF SECTION 143(2) OF THE A CT AND THE ENTIRE PROCEEDINGS WAS, THUS, PRAYED TO BE DROPPED BY THE APPELLANT. IT IS SURPRISED TO NOTE THAT THE PHOTO COPY OF THE SPEED POST ENVELOPE DISPATCH NO.1221 WAS PLACED ON RECORD BY THE REVENU E. WITH OUR LIMITED UNDERSTANDING, W FAILED TO FOLLOW THAT IF T HE SAID ENVELOPE CONTAINING THE NOTICE IS SENT TO THE ASSESSEE AND R ECEIVED BY THEM THEN AS TO HOW THE SAME COULD REACH THE SENDER I.E. THE OFFICE OF THE CONCERNED REVENUE OFFICER AND THIS COULD BE KEPT IN THE FILE. SECONDLY THE NOTICE WHICH HAS BEEN CLAIMED TO HAVE BEEN SERVED UPON THE ASSESSEE THROUGH OFFICE SERVER THE ACKNOWL EDGEMENT WHEREOF SPEAK ABOUT THE DETAILS OF THE PERSON RECE IVING THE SAME. IN FACT THE NOTICE SERVER SHRI PREM N JOSHI FAILED TO PROVE ON RECORD THE NAME/DESIGNATION/IDENTIFICATION OF THE PERSON T O WHOM THE SWASTIK COAL CORPORATION PVT. LTD ITA NO.477/IND/2013 6 SAME WAS DELIVERED. IT WAS CONTENDED BY THE APPELL ANT THAT THE SIGNATURE OF THE IMPUGNED NOTICE DOES NOT BELONG TO ANY OF THE OFFICER/DIRECTOR OR EMPLOYEE OF THE COMPANY. IT IS RELEVANT TO NOTE THAT THIS FACT HAS NOT BEEN CONTROVERTED BY THE RE VENUE. NO SUCH EVIDENCE INDICATING RECEIVING NOTICE GENUINELY ON BEHALF OF THE ASSESSEE IS FORTHCOMING FROM THE REVENUE IN ORDER T O SUBSTANTIATE THAT THE SERVICE HAS ACTUALLY BEEN AFFECTED. THE LD . DR HAS NOT BEEN ABLE TO SATISFY US ON THIS ASPECT. IN THAT EVENT W E DO NOT HESITATE TO CONCLUDE THAT THE PROVISION OF SERVICE OF NOTICE AS STIPULATED UNDER SECTION 282 OF THE ACT AS IF IT IS A SUMMON ISSUED BY A COURT UNDER THE CODE OF CIVIL PROCEDURE, 1908 (5 OF 1908) HAS N OT BEEN COMPLIED WITH IN ITS TRUE SPIRIT, IN THE ABSENCE OF DISCLOSU RE OF IDENTIFICATION OF THE PERSON TO WHOM THE SERVICE WAS ULTIMATELY EF FECTED. THE LD. A.O FAILED TO BRING ANY MATERIAL ON RECORD TO SHOW THAT THE NOTICE U/S 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE WI THIN THE STIPULATED PERIOD I.E. 30.09.2009 BEFORE THE EXPIRY OF 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN I S FURNISHED. THUS, IT CANNOT BE HELD TO BE A VALID SERVICE OF NO TICE ON THE SWASTIK COAL CORPORATION PVT. LTD ITA NO.477/IND/2013 7 ASSESSEE. IN THIS REGARD WE HAVE CONSIDERED THE JU DGMENT RELIED UPON BY THE LD. AR SOME OF WHICH ARE DISCUSSED HERE IN BELOW:- THE HONBLE DELHI HIGH COURT IN THE CASE OF M.L. NARANG/ R.L. NARANG REPORTED IN (1981) 6 TAXMANN 61 (DELHI) . IN THIS PARTICULAR CASE REVENUE HAS FAILED TO SHOW THAT THE SERVICES W AS EFFECTED ON 3.2.1969 EITHER ON THE ASSESSEE CONCERNED OR IN ANY OTHER EMPLOYEES, RELATIVES OR ANY OTHER AUTHORISED REPRES ENTATIVES. THERE WAS NOTHING ON RECORD TO SHOW THE IDENTITY OF THE P ERSON ON WHOM THE SERVICE WAS EFFECTED AND THUS IT WAS HELD THAT THE SERVICE WAS NOT EFFECTED ON THE ASSESSEE CONCERNED ON 3.02.1969 . ON AN IDENTICAL SITUATION THE HON,BLE HIGH COURT OF ALLAHABAD IN THE CASE OF DR. Y.D. SINGH, B.R.D. MEDICAL COLLEGE REPORTED IN (2012) 20 TAXMANN.COM 174(ALL.) , OBSERVED AT PARA 5 THAT IT WAS CLAIMED THAT THE SAID NOTICE WAS SERVED ON SHRI MUR LI DHAR VAISH NO SUCH CLAIM MADE BY THE DEPARTMENT THAT IT WAS SE RVED ON CERTAIN SPECIFIC PERSON. LATER THE SERVER INSPECTO R DID NOT STATE ANY SPECIFIC PERSON ON WHOM HE MADE THE DELIVERY. IT W AS FURTHER OBSERVED THAT PERSONAL SERVICE WOULD NOT BE A VALID SERVICE OF SWASTIK COAL CORPORATION PVT. LTD ITA NO.477/IND/2013 8 NOTICE, IF IT HAS NOT BEEN MADE EITHER ON THE PERSO N MENTIONED THERE OR AN AGENT DULY AUTHORISED TO RECEIVE NOTICE AS PR OVIDED UNDER SECTION 282 OF THE ACT. FINALLY, SINCE THERE HAVE BEEN NO ENTRY IN THE ORDER SHEET REGARDING THE ISSUANCE AND SERVICE OF NOTICE U/S 143(2) OF THE ACT, THE CONTENTION OF THE ASSESSEE T HAT NO SUCH SERVICE WAS EVER ISSUED WHAT IS TO SAY OF SERVICE O F THE SAME ON THE ASSESSEE OR ON HIS AUTHORISED REPRESENTATIVE HAS BE EN ACCEPTED BY THE COURT. IN ANOTHER JUDGMENT THE HONBLE TRIBUNAL, LUCKNOW BENCHES IN THE CASE OF NRIPENDRA MISHRA REPORTED IN (2009) 121 TTJ 701 (LUCKNOW) HELD IN PARA 11 THAT IN FACT THE REVENUE HAD NOT PROVED THE IDENTITY OF PERSON. THUS THE REVENUE HAD NOT P ROVED ON RECORD THAT THE NOTICE UNDER SECTION 143(2) WAS SERVED UPO N THE AGENT OF THE ASSESSEE. IN SUCH CIRCUMSTANCES, THE ASSESSMEN T ORDER PASSED BY THE ASSESSING OFFICER HAD TO BE ANNULLED . 4. THUS, TAKING INTO CONSIDERATION OF THE ENTIRE AS PECT OF THE MATTER WE ARE OF THE CONSIDERED VIEW THAT UNLESS TH ERE IS SERVICE OF NOTICE IN ACCORDANCE WITH PROVISION UNDER SECTION 2 82 OF THE ACT SWASTIK COAL CORPORATION PVT. LTD ITA NO.477/IND/2013 9 SEPARATELY SPECIFYING MODE OF SERVICE OF NOTICE, IT CANNOT BE TREATED AS VALID SERVICE OF NOTICE. IN THE CASE IN HAND TH E REVENUE HAS FAILED TO SHOW, THAT SERVICE OF NOTICE UNDER SECTIO N 143(2) OF THE ACT EFFECTED WITHIN THE STIPULATED TIME UNDER THE PROVI SIONS OF SECTION 143(2) OF THE ACT ON THE ASSESSEE OR ON ANY OF THEI R EMPLOYEES/ RELATIVES OR ANY AUTHORIZED REPRESENTATIVES PARTICU LARLY IN ADHERENCE TO PROVISION UNDER SECTION 282 OF THE ACT EITHER BY POST OR AS IF IT WERE A SUMMONS ISSUED BY A COURT UNDER THE CODE OF CIVIL PROCEDURE, 1908 (5 OF 908). IN THAT VIEW OF THE MATTER THE SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT, IN OUR CONSIDERED OPINION IS NO SERVICE. SINCE THE INITIATION OF THE PROCEEDING IS NOT IN ADHERENCE TO THE PRESCRIBED RULES, THE ENTIRE PROCE EDING IS VITIATED AND HENCE QUASHED. CONSEQUENTLY, ALL ACTION TAKEN THERE UNDER IS BAD. THE IMPUGNED ADDITION, MADE BY THE REVENUE IS , THUS, HEREBY DELETED. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. SWASTIK COAL CORPORATION PVT. LTD ITA NO.477/IND/2013 10 THE ORDER PRONOUNCED IN THE OPEN COURT ON 20.05.2021 SD/- SD/- (MANISH BORAD) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER / DATED : 20 TH MAY, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE