ITO, New Delhi V. Sh. Surender Kumar Jain, New Delhi

ITA 4798/DEL/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4315 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 29-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 18-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWANI TANEJA
• Assessee Lawyers: ASHWANI TANEJA; SUMIT JAIN SHRI
• Keywords: Period of limitation; Corroborative evidences; Time period of passing order
• Section: 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) (DELHI BENCH G : NEW DELHI) (DELHI BENCH G : NEW DELHI) (DELHI BENCH G : NEW DELHI) BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.4798/DEL./2009 ITA NO.4798/DEL./2009 ITA NO.4798/DEL./2009 ITA NO.4798/DEL./2009 (ASSESSMENT YEAR : 2006 (ASSESSMENT YEAR : 2006 (ASSESSMENT YEAR : 2006 (ASSESSMENT YEAR : 2006- -- -07) 07) 07) 07) ITO, WARD 32(1), ITO, WARD 32(1), ITO, WARD 32(1), ITO, WARD 32(1), VS. VS. VS. VS. MR. SURENDER KUMAR JAI MR. SURENDER KUMAR JAI MR. SURENDER KUMAR JAI MR. SURENDER KUMAR JAIN, N,N, N, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. 9B, SUNDER NAGAR MARKET, 9B, SUNDER NAGAR MARKET, 9B, SUNDER NAGAR MARKET, 9B, SUNDER NAGAR MARKET, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (PAN/GIR NO.AAAPJ1967B) (PAN/GIR NO.AAAPJ1967B) (PAN/GIR NO.AAAPJ1967B) (PAN/GIR NO.AAAPJ1967B) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI TANEJA, ADV & SUMIT JAIN ASSESSEE BY : SHRI ASHWANI TANEJA, ADV & SUMIT JAIN ASSESSEE BY : SHRI ASHWANI TANEJA, ADV & SUMIT JAIN ASSESSEE BY : SHRI ASHWANI TANEJA, ADV & SUMIT JAIN REVENUE BY : SHRI KISHORE B.,DR REVENUE BY : SHRI KISHORE B.,DR REVENUE BY : SHRI KISHORE B.,DR REVENUE BY : SHRI KISHORE B.,DR ORDER ORDER ORDER ORDER PER A.D. JAIN: JM PER A.D. JAIN: JM PER A.D. JAIN: JM PER A.D. JAIN: JM THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 2007-08, TAKING THE FOLLOWING GROUNDS: 1. LD.CIT(A) HAS ERRED IN HOLDING THAT THE OLY NOTI CE ISSUED TO THE ASSESSEE U/S 143(2) ON 6.10.2008 WAS VOID AB-INITIO AND THE PROCEEDINGS THEREUNDER WERE ALSO VOID, WITHOU T CONSIDERING THE FACT THAT THE FIRST NOTICE U/S 143(2) WAS ISSUED BY THE AO ON 6.9.2007, WHICH WAS WELL WITHIN TH E LIMITATION PERIOD OF 12 MONTHS FROM THE END OF THE M ONTH IN WHICH RETURN WAS FILED. 2. LD.CIT(A) HAS FURTHER ERRED IN DELETING AN ADDITI ON OF `10,00,000 WITHOUT CONSIDERING THE FACT THAT THE ASSESSE E FAILED TO FILE ANY SUPPORTING EVIDENCE IN RESPECT OF CASH DEPOSIT IN THE BANK ACCOUNT BEFORE THE AO. 2. APROPOS THE FIRST ISSUE, AS PER THE ASSESSMENT ORDER, RET URN OF INCOME, DECLARING INCOME OF `6,20,920 WAS FILED ON 2 7.10.06. THE RETURN WAS PROCESSED. SUBSEQUENTLY, IT WAS SELECTED FOR SCRUTINY ON I.T.A. NO.4798/DEL./2009 (A.Y. : 2006-07) 2 THE BASIS OF AIR INFORMATION RECEIVED. VIDE ORDER DA TED 28.11.08, THE AO TREATED THE CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE, AMOUNTING TO `10 LAKHS, AS INCOME OF THE ASSESSEE FROM UN DISCLOSED SOURCES. 3. THE ASSESSEE CONTENDED BEFORE THE CIT(A), INTER ALIA , THAT NO NOTICE U/S 143(20 HAD BEEN SERVED ON THE ASSESSEE WITHIN ONE YEAR FORM THE END OF THE MONTH IN WHICH THE RETURN WAS FU RNISHED I.E. UP TO 31.10.07; AND THAT, THEREFORE, THE ASSESSMENT WAS VOID A B-INITIO. THIS GRIEVANCE OF THE ASSESSEE WAS ACCEPTED BY THE CIT(A) AND THE NOTICE U/S 143(2) OF THE ACT WAS HELD TO BE VOID AB INITIO. AS SUCH, THE PROCEEDINGS PURSUANT TO THE SAID NOTICE WERE ALSO HELD TO BE VOID. 4. ON MERITS, THE CASE WAS PICKED UP FOR SCRUTINY ON TH E BASIS OF AIR THAT THE ASSESSEE HAD DEPOSITED A CASH OF `10 LAKHS IN HIS BANK ACCOUNT WITH HDFC BANK, SUNDER NAGAR BRANCH, NEW DE LHI ON 31.3.06. THE ASSESSEE EXPLAINED TO THE AO THAT THE CASH OF `10 LA KHS WAS THE SAME CASH AS HAS BEEN WITHDRAWN BY THE ASSESSEE ON 11.7.07 FROM THE BANK ACCOUNT OF THE ASSESSEE, AMOUNTING TO `5 LAKHS AND ANOTHER AMOUNT OF `5 LAKHS, WHICH HAD BEEN WITHDRAWN FROM TH E BANK ACCOUNT OF THE HUF OF THE ASSESSEE; THAT BOTH THE WITHDRAWALS H AD BEEN MADE ON THE SAME DATE; THAT LATER ON, ON 18.3.06, THE ASSESSE E HAD DEPOSITED AN AMOUNT OF ` 9 LAKHS IN CASH IN HIS BANK AC COUNT AND ANOTHER AMOUNT OF `1 LAKH, ON 20.3.06; THAT, HOWEVE R, SINCE THE AMOUNT OF `10 LAKHS COMPRISED AN AMOUNT OF `5 LAKHS PE RTAINING TO HIS HUF ACCOUNT, ON 21.3.06, REALIZING THE MISTAKE, THE ASSESSEE HAD WITHDRAWN AN AMOUNT OF `5 LAKHS FROM HIS INDIVIDUAL A CCOUNT AND HAD DEPOSITED THE SAME IN THE HUF ACCOUNT. 5. THE AO, HOWEVER, DID NOT AGREE WITH THE ABOVE EX PLANATION OF THE ASSESSEE. IT WAS OBSERVED THAT IT WAS NOT POSSIBLE FOR THE ASSESSEE TO KEEP SUCH A HUGE AMOUNT AT HOME FOR A PERIOD OF 9 MONTHS; WHEN I.T.A. NO.4798/DEL./2009 (A.Y. : 2006-07) 3 HE WAS NOT FEELING WELL AND BEING OLD, HE WAS DEPENDE NT ON EMPLOYEES. THE AO, AS SUCH, TREATED THE CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE AS HIS INCOME FROM UNDISCLOSED SOURC ES. 6. THE CIT(A) DELETED THE ADDITION HOLDING THAT THE AO HAD NOT GIVEN ANY ADVERSE FINDING ABOUT THE USE OF THE CASH WI THDRAWN BY THE ASSESSEE AND THAT THE AO HAD NOT BROUGHT ANY EVIDENCE O N RECORD REGARDING THE SOURCES OF CASH DEPOSITED OF TWO DIFFEREN T DATES IN THE BANK ACCOUNT OF THE ASSESSEE. IT WAS OBSERVED THAT THE A SSESSEE HAD SHOWN SUFFICIENT WITHDRAWALS FROM THE PARTNERSHIP FIRM, M/S S.KUMAR & CO. AND THAT, AS SUCH, IT COULD NOT BE PRESUMED THAT T HE CASH WITHDRAWN BY THE ASSESSEE WAS USED FOR HOUSEHOLD EXPENSES WH ILE THERE WAS ALTERNATE SOURCE OF DEPOSIT OF CASH BY THE ASSE SSEE IN HIS BANK ACCOUNT. 7. BEFORE US, CHALLENGING THE IMPUGNED ORDER, THE LD .DR. HAS CONTENDED THAT THE CIT(A) HAS ERRED IN HOLDING THAT THE ONLY NOTICE ISSUED TO THE ASSESSEE U/S 143(2) OF THE ACT ON 6.10.08 WA S VOID AB INITIO AND THAT THE PROCEEDINGS WERE ALSO VOID AB INI TIO; THAT WHILE DOING SO, THE CIT(A) HAS FAILED TO CONSIDER THE FACT T HAT THE NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 6.9.07, WHICH WAS WELL WITHIN LIMITATION; AND THAT THE CIT(A) HAS ERRED IN DELETIN G THE ADDITION OF `10 LAKHS WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE MISER ABLY FAILED TO BRING ON RECORD ANY EVIDENCE CONCERNING THE DEPOSIT OF CASH IN THE BANK ACCOUNT. 8. THE LD.COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, H AS STRONGLY RELIED ON THE IMPUGNED ORDER. RELIANCE HAS BEEN PLA CED ON THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE O F ACIT VS. BALDEV RAJ CHARLA & OTHERS (2009) 19 DTR (DEL.)(TRIB.) 413 (COPY PLACED ON RECORD. 9. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MAT ERIAL ON RECORD. SO FAR AS REGARDS THE VALIDITY OR OTHERWISE O F THE NOTICE ISSUED TO THE ASSESSEE U/S 143(2), IT IS SEEN, THAT THE ASSESSMENT OR DER DOES I.T.A. NO.4798/DEL./2009 (A.Y. : 2006-07) 4 NOT EVINCE ANY NOTICE DATED 6.9.07, ISSUED U/S 143(2) OF THE ACT, TO HAVE BEEN SERVED ON THE ASSESSEE. ON THE OTHER HAND, TH E FACTS AS AVAILABLE FROM THE ORDER OF THE CIT(A) ARE THAT TH E RETURN OF INCOME WAS FILED ON 27.10.06. AS SUCH, NOTICE U/S 143(2) OF T HE ACT OUGHT TO HAVE BEEN SERVED BY 31.10.07, IN ORDER TO BE WITHIN THE LIMITATION OF ONE YEAR FROM THE END OF THE MONTH IN WHICH THE RET URN WAS FILED. THE FIRST NOTICE U/S 143(2) WAS ISSUED ON 6.10.08. THIS WAS C LEARLY BEYOND THE PRESCRIBED LIMITATION, AS CORRECTLY HELD BY THE C IT(A). 10. NOW, ONCE THE NOTICE ITSELF IS BEYOND THE LIMITAT ION, IT IS VOID AB INITO AND THE PROCEEDINGS THEREUNDER ARE ALSO, CONSEQU ENTLY, VOID AB INITIO. ACCORDINGLY, FINDING NO ERROR WHATSOEVER WI TH THE OBSERVATIONS OF THE CIT(A) WITH REGARD TO THE NOTICE BEING BAD I N LAW FOR BEING BEYOND LIMITATION, WE HEREBY UPHOLD THE SAME. GROUN D NO.1 IS, THEREFORE, REJECTED. 11. ONCE THE NOTICE U/S 143(2) OF THE ACT HAS BEEN HE LD TO BE BEYOND LIMITATION AND THUS VOID AB INITO, THE PROCEEDINGS TH EREUNDER ALSO DO NOT SURVIVE AND, THEREFORE, THE GROUND NO.2 IS ALSO RE JECTED. 12. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DI SMISSED. SD/- SD/- (SHAMIM YAHYA) (A.D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED : APRIL 20,2011 SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT, 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT I.T.A. NO.4798/DEL./2009 (A.Y. : 2006-07) 5