Shri Shrinivas Gupta, Bareilly V. Income Tax Officer, Ward-2(2), Bareilly

ITA 482/LKW/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6113 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 29-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Invalid notice; Opportunity of being heard; Reason to believe; Set aside
• Section: 142(1); 292BB; 143(2); 48; 13; 147; 69; 148

Judgement Text

I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW (THROUGH VIRTUAL HEARING) BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 SHRINIVAS GUPTA, C-606, PATEL NAGAR, BAREILLY. PAN:BVXPG1066M VS. INCOME TAX OFFICER, WARD-2(2), BAREILLY. (APPELLANT) (RESPONDENT) O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A), BAREILLY DATED 11/06/2019 PERTAINING TO ASS ESSMENT YEAR 2010- 2011. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND S OF APPEAL: 1. LD. CIT(A) ERRED IN NOT ACCEPTING THE PLEA OF T HE ASSESSEE THAT NOTICE U/S 148 WAS WRONGLY ISSUED TO THE ASSESSEE, AS HE HAD DULY COMPLIED AIR NOTICE AND EXPLAINED THE SOURCE OF DEPOSIT. 2. LD. CIT(A) ERRED IN NOT ACCEPTING THE PLEA THAT THE ORDER OF A.O. IS BAD IN LAW AS THE NOTICE ISSUED BY HIM U/S 148 WAS NOT SERVED ON THE ASSESSEE. 3. LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING A SUM OF RS.12,33,330/- TO THE INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE I.T. ACT 1961 APPELLANT BY SHRI P. K. KAPOOR, C. A. RESPONDENT BY S HRI AJAY KUMAR, D.R. DATE OF HEARING 24/09/2020 DATE OF PRONOUNCEMENT 25 /0 9 /2020 I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 2 DESPITE THE FACT THAT NO DEFECT/ ANY FACTUAL ERROR WAS POINTED OUT BY THE AO AS WELL AS CIT(A) IN THE DOCUMENTS FILED AND EXPLANATION GIVEN BY THE ASSESS EE DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDINGS. 4. THE LD. A.O. HAS NOT ALLOWED PROPER OPPORTUNITY OF BEING HEARD BEFORE PASSING ORDER U/S 144. 5. THE ORDER IS AGAINST THE PRINCIPLES OF NATURAL J USTICE. 2. BESIDES THE ABOVE GROUNDS OF APPEAL, THE ASSESSE E HAS FILED PETITION FOR ADMISSION OF ADDITIONAL GROUND, WHICH FOR THE S AKE OF COMPLETENESS IS REPRODUCED BELOW: 6. THAT THE REASON TO BELIEVE WERE RECORDED ONLY WITH A VIEW TO VERIFY THE SOURCE OF CASH DEPOSIT OF RS.14, 07,000/- IN SAVINGS BANK ACCOUNT WHICH NARRATION DOES NOT AMOUN T TO REQUISITE SATISFACTION FOR FORMING BELIEF OF ESCAPE MENT OF INCOME WITHIN THE MEANING OF SECTION 147 AND DUE TO SUCH A FUNDAMENTAL DEFICIENCY IN RECORDING OF REASONS THE ASSESSMENT PROCEEDINGS GOT VITIATED RENDERING THE A SSESSMENT ORDER AS NULL AND VOID.' 3. LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT ADDITIONAL GROUND, FILED BY THE ASSESSEE, IS PURELY LEGAL PLEA WHICH GOES TO THE ROOT OF THE ASSESSMENT AND FOR ADJUDICATING THE SAID GROUND OF APPEAL, THE RELEVANT MATERIAL AND INFORMATION IS ALREADY AV AILABLE ON RECORD AND THEREFORE, KEEPING IN VIEW THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT [19 98] 229 ITR 383, THE SAME MAY BE ADMITTED AND ADJUDICATED. LEARNED D. R . HAS NO OBJECTION TO ADMISSION OF ADDITIONAL GROUND AND THEREFORE, SA ME WAS ADMITTED AND LEARNED COUNSEL WAS DIRECTED TO PROCEED WITH ADDITI ONAL GROUND. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS A SMALL TIME SHOP KEEPER AND DUE TO BAD ECONOMIC COND ITIONS, SOLD HIS SHOP I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 3 AND STOCK AND DEPOSITED AN AMOUNT OF RS.14,07,000/- IN THE SAVINGS BANK ACCOUNT AND THE ASSESSEE, BEING A SMALL TIME TRADER S, WAS NOT HAVING TAXABLE INCOME AND THEREFORE, WAS NOT FILING ANY IN COME TAX RETURN. IT WAS SUBMITTED THAT THE ASSESSING OFFICER, ON THE BASIS OF DEPOSIT IN THE SAVINGS BANK ACCOUNT, ARRIVED AT THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME AND ISSUED NOTICE U/S 148 WHICH IS NOT IN AC CORDANCE WITH LAW AS HAS BEEN HELD BY THE I.T.A.T. DELHI BENCH IN THE CA SE OF BIR BAHADUR SINGH SIJWALI VS. INCOME TAX OFFICER [2015] 53 TAXMANN.CO M 366 (DELHI-TRIB). FURTHER RELIANCE WAS PLACED ON AN ORDER OF AMRITSAR BENCH OF THE TRIBUNAL IN THE CASE OF AMRIK SINGH VS. INCOME TAX OFFICER [ 2016] 159 ITD 329 (AMRITSAR-TRIB). LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS CASE IT HAS BEEN HELD THAT THE ASSESSING OFFICER CA NNOT ARRIVE AT A REASON TO BELIEVE MERELY ON THE BASIS OF DEPOSITS IN THE B ANK AND HE HAS TO SPECIFICALLY RECORD THE REASON THAT INCOME HAS ESCA PED THE ASSESSMENT. THEREFORE, IT WAS ARGUED THAT THE REASON RECORDED H AVING NO NEXUS WITH THE INCOME ESCAPEMENT ARE NO REASON AND THEREFORE, THE ADDITIONAL GROUND OF APPEAL MAY BE ALLOWED AND APPEAL OF THE A SSESSEE MAY BE ALLOWED. 5. LEARNED D. R., ON THE OTHER HAND, OBJECTED TO TH E ARGUMENTS OF LEARNED COUNSEL FOR THE ASSESSEE AND SUBMITTED THAT THE ASSESSING OFFICER, BEFORE ISSUING NOTICE U/S 148 AND BEFORE RECORDING THE REASONS, ISSUED A NON STATUTORY LETTER DATED 06/03/2017 AND ASKED THE ASSESSEE TO EXPLAIN AND IN THIS RESPECT MY ATTENTION WAS INVITED TO COP Y OF REASONS RECORDED, PLACED AT PAPER BOOK PAGE 59WHERE THE ASSESSING OFF ICER HAS RECORDED THESE FACTS AND THEREFORE, IT WAS ARGUED THAT IN TH E CASE LAWS RELIED ON BY LEARNED COUNSEL FOR THE ASSESSEE, THE ASSESSING OFF ICER WITHOUT ISSUING ANY NON STATUTORY NOTICE HAD PROCEEDED TO RECORD RE ASONS AND HAD ISSUED NOTICE U/S 148 OF THE ACT AND THEREFORE, THE CASE L AWS ARE DISTINGUISHABLE. I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 4 6. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, SUBMITTED THAT AFTER RECEIVING REPLY FROM THE ASSESSEE THE ASSESSI NG OFFICER DID NOT CARRY OUT ANY FURTHER INVESTIGATION AND SIMPLY STATED THA T EVIDENCE OF SALE OF SHOP AND STOCK WAS NOT ENCLOSED AND THEREFORE, HE F ORMED OPINION REGARDING ESCAPEMENT OF INCOME WHICH IS NOT IN ACCO RDANCE WITH LAW. 7. I HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THR OUGH THE MATERIAL PLACED ON RECORD. I FIND THAT THE ASSESSING OFFICE R RECORDED THE REASONS ON 27/03/2017 AFTER TAKING INTO CONSIDERATION WRITT EN REPLY DATED 06/03/2017. IN THE REASONS RECORDED, THE ASSESSING OFFICER HAS MENTIONED THAT THE ASSESSEE HAS NOT SUBMITTED ANY P ROOF REGARDING SALE OF CLOTH AND SHOP AND THEREFORE, HE HELD THAT THE CONT ENTION OF THE ASSESSEE WAS NOT ACCEPTABLE AND ONLY THEREAFTER HE PROCEEDED TO HOLD THAT INCOME HAS ESCAPED ASSESSMENT AND THEN ISSUED NOTICE U/S 1 48 OF THE ACT. IN MY OPINION, THE CASE LAWS RELIED ON BY LEARNED COUNSEL FOR THE ASSESSEE ARE DISTINGUISHABLE AND I AM IN AGREEMENT WITH THE ARGU MENTS OF LEARNED D. R. AND THEREFORE, THE ADDITIONAL GROUND OF APPEAL T AKEN BY THE ASSESSEE IS DISMISSED. THE LEARNED AR WAS HOWEVER ASKED TO PRO CEED WITH OTHER GROUND OF APPEAL. 8. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS ANOTHER LEGAL ISSUE WHICH THE ASSESSEE HAS TAKEN VIDE GROUN D NO. 2 AND SUBMITTED THAT THE ASSESSING OFFICER HAS NOT ISSUED NOTICE U/ S 148 ON THE ADDRESS MENTIONED IN THE PAN DATABASE AND THEREFORE, THE NO TICE ISSUED BY THE ASSESSING OFFICER U/S 148 IS NOT MAINTAINABLE AND T HEREFORE, CONSEQUENT ASSESSMENT IS NULL AND VOID. LEARNED A.R. IN THIS RESPECT INVITED MY ATTENTION TO PAGE 52 OF THE PAPER BOOK WHERE A COPY OF NOTICE U/S 148 WAS PLACED AND WHEREIN THE ADDRESS OF THE ASSESSEE WAS MENTIONED AS B- 220, RAJENDRA NAGAR, BAREILLY. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 5 THAT AS PER PAN DATABASE, AVAILABLE WITH THE DEPART MENT, ADDRESS OF THE ASSESSEE WAS C-606, PATEL NAGAR, NEAR BALAJI MANDIR , BAREILLY AND IN THIS RESPECT MY ATTENTION WAS INVITED TO PAGE 58 OF THE PAPER BOOK WHERE A COPY OF PAN DATABASE DETAIL WAS PLACED. LEARNED CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THIS NOTICE U/S 148 WAS NOT AT ALL S ERVED UPON THE ASSESSEE AND THEREFORE, THE CONSEQUENT PROCEEDINGS ARE NULL AND VOID. LEARNED COUNSEL FOR THE ASSESSEE IN THIS RESPECT RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF PR. CIT VS. I-VEN INTE RACTIVE LTD. [2019] 267 TAXMAN 471 (SC) WHEREIN THE HON'BLE SUPREME COURT H AS CLEARLY HELD THAT NOTICE U/S 143(2) HAS TO BE ISSUED AT THE ADDRESS A VAILABLE IN THE DATABASE OF THE PAN AND IN THIS RESPECT OUR SPECIFIC ATTENTI ON WAS INVITED TO PARA 7 OF THE ORDER WHERE THE HON'BLE COURT HAS MADE SUCH OBSERVATIONS. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THO UGH THE HON'BLE COURT HAS MADE THE FINDINGS IN RESPECT OF NOTICE U/S 143( 2) BUT THEY ARE EQUALLY APPLICABLE TO NOTICE U/S 148 ALSO AND IN THIS RESPE CT OUR FURTHER ATTENTION WAS INVITED TO A DECISION OF HON'BLE DELHI HIGH COU RT IN THE CASE OF VEENADEVI KARNANI VS. INCOME TAX OFFICER [2019] 102 TAXMANN.COM 470 (DELHI) WHERE THE HON'BLE HIGH COURT, AFTER NOTING DOWN THE REQUIREMENTS OF RULE 127 OF THE I.T. RULES READ WITH SECTION 282 OF THE I.T. ACT, HAS NOTED THAT THE COMMUNICATION OF NOTICE HAD TO BE FI RST MADE AT THE ADDRESS AVAILABLE IN THE PAN DATABASE OR ADDRESS AV AILABLE IN INCOME TAX RETURN AND ONLY IN CASE THE NOTICE COULD NOT BE ISS UED ON THESE ADDRESSES, THE SAME CAN BE ISSUED AND SERVED ON THE ADDRESS AV AILABLE WITH THE BANKING COMPANY OR POST OFFICE ETC. LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE DEPARTMENT DID NOT MAKE ANY ATTE MPT TO ISSUE NOTICE TO THE ASSESSEE ON THE ADDRESS LISTED IN PAN DATABA SE DESPITE OF THE FACT THAT THE ASSESSEE HAD MENTIONED HIS PAN ON THE LETT ER DATED 06/03/2017 AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO PA GE 32 OF THE PAPER BOOK WHERE SUCH COPY OF LETTER WAS PLACED. I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 6 9. LEARNED D. R., ON THE OTHER HAND, SUBMITTED THAT THE ASSESSEE WAS ISSUED NOTICE IN WHICH HE PARTICIPATED AND HIS COUN SEL ALSO PARTICIPATED AND TOOK ADJOURNMENT AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO THE COPY OF THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFIC ER HAS NOTED ALL THESE FACTS. LEARNED D. R. THEREFORE, SUBMITTED THAT HAV ING PARTICIPATED IN THE PROCEEDINGS, IT CANNOT BE SAID THAT THE NOTICE U/S 148 WAS NOT SERVED UPON THE ASSESSEE WHEREAS THE FACT REMAINS THAT THE NOTI CE WAS SERVED THROUGH REGISTERED POST. 10. LEARNED COUNSEL FOR THE ASSESSEE, IN HIS REJOIN DER, SUBMITTED THAT NOTICE U/S 148 MENTIONS THE ADDRESS AS B-220, RAJEN DRA NAGAR, BAREILLY ON WHICH THE REGISTERED POST WAS SENT BUT IT WAS NOT R ECEIVED BY THE ASSESSEE AND INSTEAD THE ASSESSEE HAD RECEIVED NOTICE U/S 14 2(1) WHICH WAS SERVED ON THE ASSESSEE AT THE CORRECT ADDRESS OF C-606, PA TEL NAGAR, NEAR BALAJI MANDIR, BAREILLY AND MY ATTENTION WAS INVITED TO PA GE 55 OF THE PAPER BOOK WHERE ON THE COPY OF NOTICE, THE ADDRESS HAS BEEN R ECTIFIED BY THE DEPARTMENT FROM THE OLD ADDRESS TO THE ACTUAL ADDRE SS. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD AP PEARED BEFORE THE ASSESSING OFFICER IN RESPONSE TO NOTICE U/S 142(1) ONLY AND NO NOTICE U/S 148 WAS SERVED UPON THE ASSESSEE. IT WAS SUBMITTED THAT CORRECTION MADE BY THE DEPARTMENT IN THE NOTICE U/S 142(1) ITSELF P ROVES THAT THE NOTICE U/S 148 WAS NOT SERVED AT THE ADDRESS OF THE ASSESSEE A ND THEREFORE, IT WAS ARGUED THAT THE GROUND OF APPEAL MAY BE ALLOWED. I T WAS FURTHER ARGUED THAT EVEN IF THE ASSESSEE HAD PARTICIPATED IN THE P ROCEEDINGS, SECTION 292BB OF THE ACT CANNOT COME TO THE HELP OF THE ASS ESSEE AS HAS BEEN HELD BY HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF PR. CIT VS. MOHD. RIZWAN, VIDE ORDER DATED 30.03.2017. I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 7 11. I HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. THE ONLY DISPUTE IN THIS APPEAL, AS ARGUED BY BOTH THE PARTIES, IS AS TO WHETHER THE NOTICE ISSUED U/S 148 OF THE ACT WAS SERVED UPON THE ASSESSEE OR NOT. IN THIS RESPECT THE COPY OF NOTICE PLACED AT PAGE 52 OF THE PAPER BOOK IS QUITE RELEVANT WHERE T HE ADDRESS OF THE ASSESSEE HAS BEEN MENTIONED AS B-220, RAJENDRA NAGA R, BAREILLY. THE ADDRESS AS PER PAN DATABASE OF THE DEPARTMENT, PLAC ED AT PAGE 58 OF THE PAPER BOOK, CLEARLY SHOWS THAT THE ADDRESS OF THE A SSESSEE IS C-606, PATEL NAGAR, NEAR BALAJI MANDIR, BAREILLY. THE ASSESSEE VIDE REPLY DATED 06/03/2017 HAS ALSO MENTIONED THE PAN IN HIS REPLY AND THEREFORE, THE ASSESSING OFFICER SHOULD HAVE ENSURED FROM THE PAN DATABASE THE CORRECT ADDRESS OF THE ASSESSEE AND SHOULD HAVE ISSUED NOTI CE U/S 148 ON THE CORRECT ADDRESS WHICH HAS NOT BEEN DONE. THE HON'B LE SUPREME COURT IN THE CASE OF PR. CIT VS. I-VEN INTERACTIVE LTD. (SUP RA) WHILE REVERSING THE ORDER OF HON'BLE HIGH COURT IN A CASE INVOLVING NOT ICE U/S 143(2) HAS OBSERVED AS UNDER: 7. NOW SO FAR AS THE OBSERVATIONS MADE BY THE HIG H COURT WHILE CONCURRING WITH THE VIEW OF THE LEARNED TRIBU NAL THAT MERELY BY FILING OF RETURN OF INCOME WITH THE NEW A DDRESS, IT SHALL BE ENOUGH FOR THE ASSESSEE TO DISCHARGE ITS L EGAL RESPONSIBILITY FOR OBSERVING PROPER PROCEDURAL STEP S AS PER THE COMPANIES ACT AND THE INCOME TAX ACT IS CONCERNED, WE ARE OF THE OPINION THAT MERE MENTIONING OF THE NEW ADDR ESS IN THE RETURN OF INCOME WITHOUT SPECIFICALLY INTIMATING TH E ASSESSING OFFICER WITH RESPECT TO CHANGE OF ADDRESS AND WITHO UT GETTING THE PAN DATABASE CHANGED, IS NOT ENOUGH AND SUFFICI ENT. IN ABSENCE OF ANY SPECIFIC INTIMATION TO THE ASSESSING OFFICER WITH RESPECT TO CHANGE IN ADDRESS AND/OR CHANGE IN THE NAME OF THE ASSESSEE, THE ASSESSING OFFICER WOULD BE JUS TIFIED IN SENDING THE NOTICE AT THE AVAILABLE ADDRESS MENTION ED IN THE PAN DATABASE OF THE ASSESSEE, MORE PARTICULARLY WHE N THE RETURN HAS BEEN FILED UNDER E-MODULE SCHEME. IT IS REQUIRED TO BE NOTED THAT NOTICES UNDER SECTION 143(2) OF THE 1 961 ACT I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 8 ARE ISSUED ON SELECTION OF CASE GENERATED UNDER AUT OMATED SYSTEM OF THE DEPARTMENT WHICH PICKS UP THE ADDRESS OF THE ASSESSEE FROM THE DATABASE OF THE PAN. THEREFORE, T HE CHANGE OF ADDRESS IN THE DATABASE OF PAN IS MUST, I N CASE OF CHANGE IN THE NAME OF THE COMPANY AND/OR ANY CHANGE IN THE REGISTERED OFFICE OR THE CORPORATE OFFICE AND THE S AME HAS TO BE INTIMATED TO THE REGISTRAR OF COMPANIES IN THE P RESCRIBED FORMAT (FORM 18) AND AFTER COMPLETING WITH THE SAID REQUIREMENT, THE ASSESSEE IS REQUIRED TO APPROACH T HE DEPARTMENT WITH THE COPY OF THE SAID DOCUMENT AND T HE ASSESSEE IS ALSO REQUIRED TO MAKE AN APPLICATION FO R CHANGE OF ADDRESS IN THE DEPARTMENTAL DATABASE OF PAN, WHICH IN THE PRESENT CASE THE ASSESSEE HAS FAILED TO DO SO. THE ABOVE FINDINGS OF HON'BLE SUPREME COURT HIGHLIG HT THAT NOTICE HAD TO BE ISSUED AT THE ADDRESS AVAILABLE IN PAN DATABASE AND IN THE PRESENT CASE THE NOTICE U/S 148 HAS NOT BEEN ISSUED AND SERVED O N THE ADDRESS AS MENTIONED IN PAN DATABASE. THE HON'BLE DELHI HIGH COURT IN THE CASE OF VEENA DEVI KARNANI (SUPRA) HAS ALSO ELABORATED THE TEST TO BE FOLLOWED FOR ISSUE OF NOTICE AS PER RULE 127 READ WITH SECTION 2 82 OF THE ACT AND HAS HELD AS UNDER: 4. THE RECORD BEARS OUT THE ASSESSEE'S SUBMISSION S. THE RETURNS FOR A.Y. 2010-11 WERE NO DOUBT FILED, REFLECTING HE R OLD (RANI BAGH) ADDRESS. NEVERTHELESS, ALL SUCCESSIVE YEAR RETURNS (A.Y. 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 AND 2016-17, ALL OF WHICH ARE ON RECORD) CONSISTENTLY REFLECT THE CHANGED PITAMPU RA ADDRESS. THE ASSESSING OFFICER (AO) CONTINUED TO BE THE SAME I.E . ITO WARD 25(2) TILL NOVEMBER, 2014. IN THESE CIRCUMSTANCES T HE ASSESSEE COMPLAINS THAT THE AO SHOULD HAVE DONE MOST TO EXER T HIMSELF IN THE COURSE OF THE LAW I.E. TO ASCERTAIN THE CORRECT ADD RESS AT WHICH THE REASSESSMENT NOTICE (ISSUED ON 13.12.2013) TO BE SE RVED. RULE 127 OF THE INCOME TAX RULES, WHICH PRESCRIBES MODE OF S ERVICE OF NOTICES, SUMMONS, REQUISITIONS AND OTHER COMMUNICAT IONS STATES AS FOLLOWS: '127.(1) FOR THE PURPOSES OF SUB-SECTION (1) OF SEC TION 282, THE ADDRESSES (INCLUDING THE ADDRESS FOR ELECTRONIC MAIL OR ELECTRONIC MAIL MESSAGE) TO WHICH A NOTICE OR SUMMO NS OR I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 9 REQUISITION OR ORDER OR ANY OTHER COMMUNICATION UND ER THE ACT (HEREAFTER IN THIS RULE REFERRED TO AS 'COMMUNICATI ON') MAY BE DELIVERED OR TRANSMITTED SHALL BE AS PER SUB-RULE ( 2). (2) THE ADDRESSES REFERRED TO IN SUB-RULE (1) SHALL BE (A) FOR COMMUNICATIONS DELIVERED OR TRANSMITTED IN THE MANNER PROVIDED IN CLAUSE (A) OR CLAUSE (B) OF SUB- SECTION (1) OF SECTION 282 (I) THE ADDRESS AVAILABLE IN THE PAN DATABASE OF THE ADDRESSEE; OR (II) THE ADDRESS AVAILABLE IN THE INCOME-TAX RETURN TO WHICH THE COMMUNICATION RELATES; OR (III) THE ADDRESS AVAILABLE IN THE LAST INCOME-TAX RETURN FURNISHED BY THE ADDRESSEE; OR (IV) IN THE CASE OF ADDRESSEE BEING A COMPANY, ADDRESS OF REGISTERED OFFICE AS AVAILABLE ON THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS: PROVIDED THAT THE COMMUNICATION SHALL NOT BE DELIVERED OR TRANSMITTED TO THE ADDRESS MENTIONED IN ITEM (I) TO (IV) WHERE THE ADDRESSEE FURNISHES IN WRITING ANY OTHER ADDRESS FOR THE PURPOSES OF COMMUNICATION TO THE INCOME-TAX AUTHORITY OR ANY PERSON AUTHORISED BY SUCH AUTHORITY ISSUING THE COMMUNICATION: PROVIDED FURTHER THAT WHERE THE COMMUNICATION CANNOT BE DELIVERED OR TRANSMITTED TO THE ADDRESS MENTIONED IN ITEM (I) TO (IV) OR ANY OTHER ADDRESS FURNISHED BY THE ADDRESSEE AS REFERRED TO IN FIRST PROVISO, THE COMMUNICATION SHALL BE DELIVERED OR TRANSMITTED TO THE FOLLOWING ADDRESS: (I) THE ADDRESS OF THE ASSESSEE AS AVAILABLE WITH A BANKING COMPANY OR A CO-OPERATIVE BANK TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949) APPLIES (INCLUDING ANY BANK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF THE SAID ACT); OR I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 10 (II) THE ADDRESS OF THE ASSESSEE AS AVAILABLE WITH THE POST MASTER GENERAL AS REFERRED TO IN CLAUSE (J) OF SECTION 2 OF THE INDIAN POST OFFICE ACT, 189 8 (6 OF 1898); OR (III) THE ADDRESS OF THE ASSESSEE AS AVAILABLE WITH THE INSURER AS DEFINED IN CLAUSE (9) OF SECTION 2 O F THE INSURANCE ACT, 1938 (4 OF 1938); OR (IV) THE ADDRESS OF THE ASSESSEE AS FURNISHED IN FORM NO. 61 TO THE DIRECTOR OF INCOME-TAX (INTELLIGENCE AND CRIMINAL INVESTIGATION) OR TO THE JOINT DIRECTOR OF INCOME-TAX (INTELLIGENCE AND CRIMINAL INVESTIGATION) UNDER SUB-RULE (1) OF RULE 114D; OR (V) THE ADDRESS OF THE ASSESSEE AS FURNISHED IN FORM NO. 61A UNDER SUB-RULE (1) OF RULE 114E TO THE DIRECTOR OF INCOME-TAX (INTELLIGENCE AND CRIMINAL INVESTIGATION) OR TO THE JOINT DIRECTOR OF INCOME-TAX (INTELLIGENCE AND CRIMINAL INVESTIGATION); OR (VI) THE ADDRESS OF THE ASSESSEE AS AVAILABLE IN THE RECORDS OF THE GOVERNMENT; OR (VII) THE ADDRESS OF THE ASSESSEE AS AVAILABLE IN THE RECORDS OF A LOCAL AUTHORITY AS REFERRED TO IN THE EXPLANATION BELOW CLAUSE (20) OF SECTION 10 OF THE ACT. (B) FOR COMMUNICATIONS DELIVERED OR TRANSMITTED ELECTRONICALLY (I) E-MAIL ADDRESS AVAILABLE IN THE INCOME-TAX RETURN FURNISHED BY THE ADDRESSEE TO WHICH THE COMMUNICATION RELATES; OR (II) THE E-MAIL ADDRESS AVAILABLE IN THE LAST INCOME-TAX RETURN FURNISHED BY THE ADDRESSEE; OR (III) IN THE CASE OF ADDRESSEE BEING A COMPANY, E- MAIL ADDRESS OF THE COMPANY AS AVAILABLE ON THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS; OR I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 11 (IV) ANY E-MAIL ADDRESS MADE AVAILABLE BY THE ADDRESSEE TO THE INCOME-TAX AUTHORITY OR ANY PERSON AUTHORISED BY SUCH INCOME-TAX AUTHORITY. ' 5. RULE 127(2) CLEARLY STATES THAT THE ADDRESSES TO WHICH A NOTICE OR SUMMONS OR REQUISITION OR ORDER OR ANY OTHER COMMUN ICATION MAY BE DELIVERED OR TRANSMITTED SHALL BE EITHER AVAILAB LE IN THE PAN DATABASE OF THE ASSESSEE OR THE ADDRESS AVAILABLE I N THE INCOME TAX RETURN TO WHICH THE COMMUNICATION RELATES OR THE AD DRESS AVAILABLE IN THE LAST INCOME TAX RETURN FILED BY THE ASSESSEE - ALL THESE OPTIONS HAVE TO BE RESORTED TO BY THE CONCERNED AUTHORITY - IN THIS CASE THE AO. THEREFORE, IN THE FACTS OF THIS CASE WHEN THE A O ISSUED THE REASSESSMENT NOTICE, AS HE DID ON 13.12.2013 - HE W AS UNDER A DUTY TO ACCESS THE AVAILABLE PAN DATA BASE OF THE ADDRES SEE OR THE ADDRESS AVAILABLE IN THE INCOME TAX RETURN TO WHICH THE COMMUNICATION RELATED OR THE ADDRESS AVAILABLE IN T HE LAST INCOME RETURN FILED BY THE ADDRESSEE. THE RETURNS FOR A.Y. 2011-12 AND 2012-13 HAD ALREADY BEEN FILED ON 22.02.2012 AND 13 .12.2012 RESPECTIVELY, REFLECTING THE CHANGED ADDRESS BUT WI TH THE SAME PAN AND BEFORE THE SAME AO. THE AO OMITTED TO ACCESS TH E CHANGED PAN DATABASE AND GOING BY THE EXPLANATION OF THE RE VENUE, HE MERELY MECHANICALLY SENT NOTICES AT THE OLD ADDRESS . EVEN AFTER ISSUING THE REASSESSMENT NOTICE, ALL SUCCEEDING NOT ICE UNDER SECTION 142(1), WERE SENT TO THE OLD ADDRESS. IT WAS IN THE SE CIRCUMSTANCES THAT THE REASSESSMENT WAS COMPLETED ON BEST JUDGMEN T BASIS. 6. THIS COURT RECOLLECTS THE DECISION OF THE PRIVY COUNCIL IN NAZIR AHMED V. KING EMPEROR (1936) 38 BOM LR 987 WHICH HA D BEEN FOLLOWED SUBSEQUENTLY IN SEVERAL SUPREME COURT RULI NGS THAT WHERE THE LAW MANDATES DOING SOMETHING IN A PARTICULAR MA NNER, THAT IS THE ONLY MANNER PERMISSIBLE IN LAW AND NO OTHER MOD E CAN BE CONSIDERED LEGAL. THEREFORE, THE AO WAS CIRCUMSCRIB ED AND BOUND BY THE EXPRESS MANDATE OF RULE 127 WHICH IS CLEARLY ADDRESSED TO THE AUTHORITIES OF THE REVENUE VIS-A-VIS THE MODE O F COMMUNICATION. GIVEN THESE COMPULSIONS, THE REVENUE'S ARGUMENT IS A DESPERATE 'FALL BACK' OF THE LAST RESORT I.E. THE NOTICE WHIC H WAS NEVER UNDER SECTION 292-B OF THE ACT IS ONE OF DESPAIR. IT AMOU NTS TO SAYING THAT A NOTICE WHICH WAS NEVER SENT OR RECEIVED IS DEEMED TO HAVE BEEN SENT AND ALL PROCEEDINGS DESPITE SUCH LACK OF NOTIC E AND DESPITE THE REVENUE'S FRAGRANT VIOLATION OF LAW ARE DEEMED TO B E JUSTIFIED. IN SUCH CIRCUMSTANCES, THE ARGUMENT, I.E. THE REVENUE' S INVOCATION OF SECTION 292-B ONLY NEEDS TO BE NOTICED IN ORDER TO BE REJECTED AS COUNTENANCING IT, WOULD MEAN THAT ALL ILLEGALITIES ARE DEEMED TO BE I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 12 TAPERED OVER, IN ITS FAVOUR. SECTION 292-B IN THE O PINION OF THE COURT WOULD ADMIT THAT NO CONTROVERSY WITH RESPECT TO THE QUESTION OF NOTICE OR PROPER SERVICE OF SUMMONS, IF AT ALL WERE ISSUED IN THE PROPER MANNER, KNOWN TO LAW. HERE CLEARLY THAT IS N OT THE CASE. 7. THE NARRATIVE OF FACTS AND THE BEHAVIOUR OF THE AO IN THIS CASE IS DISTURBING TO SAY THE LEAST. THE AO APPEARS TO HAVE COMPLETELY AND MECHANICALLY PROCEEDED ON THE INFORMATION SUPPLIED TO HIM BY THE BANK WITHOUT CARING TO ADDRESS HIMSELF TO THE CORRE CT POSITION IN LAW AND DEDUCED TO ENSURE THAT THE REASSESSMENT NOTICE (WHICH IS A MATTER OF MOMENT AS FAR AS THE ASSESSEE IS CONCERNE D) WAS ISSUED PROPERLY AND SERVED AT THE CORRECT ADDRESS IN THE M ANNER KNOWN TO LAW. THE ASSESSEE HAS RELIED UPON A SCREENSHOT OF T HE PAN DATABASE AT THE STAGE WHEN THE PETITION WAS FILED TO SAY THA T THE REVENUE ALWAYS HAD THE WHEREWITHAL TO ACCESS THE CORRECT AD DRESS, PAN NUMBER AND ALL OTHER RELEVANT DETAILS INCLUDING THE EMAIL ID AS WELL AS THE BANK ACCOUNT. THE OMISSIONS OF THE AO DESERV ES, THEREFORE, TO BE NOT ONLY ADVERSELY NOTICED BUT APPROPRIATELY REFLECTED IN HIS OR HER CONFIDENTIAL REPORTS AND APPROPRIATE PROCEEDING S INITIATED BY THE REVENUE AUTHORITIES, WHICH IS SO DIRECTED. THE CONC ERNED COMMISSIONER, PRINCIPAL COMMISSIONER OR OTHER SUPER IOR AUTHORITIES, AS THE CASE MAY BE, ARE DIRECTED TO FILE A REPORT I N THIS REGARD WITHIN EIGHT WEEKS FROM TODAY. IN THE ABOVE DECISION OF HON'BLE DELHI HIGH COURT, THE HON'BLE COURT HAS CLEARLY HELD THAT NOTICE HAS TO BE ISSUED EITHER ON THE ADDRESS AVAILABLE IN PAN DATABASE OR ADDRESS AVAILABLE IN THE INCOME TAX RETURN AND HAS CLEARLY HELD THAT THE ASSESSING OFFICER WAS CIRCUMSCRIBED A ND BOUND BY THE EXPRESS MANDATE OF RULE 127. IT HAS BEEN HELD IN TH IS CASE THAT IS THE NOTICE COULD NOT BE SERVED ON THE ADDRESS AVAILABLE IN THE PAN DATA BASE OR AT THE ADDRESS MENTIONED IN INCOME TAX RETURN ON LY THEN THE NOTICE CAN BE ISSUED ON THE ADDRESS MENTIONED IN BANKING C OMPANY OR POST OFFICE. NO SUCH ATTEMPT HAS BEEN MADE IN THIS CASE. IN THE PRESENT CASE, CLEARLY THE NOTICE U/S 148 WAS NOT SERVED ON THE AS SESSEE ON THE ADDRESS MENTIONED IN PAN DATABASE BUT WAS STRAIGHT FORWARDE D ISSUED AT ANOTHER ADDRESS. I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 13 12. I FURTHER FIND THAT HON'BLE ALLAHABAD HIGH COUR T IN THE CASE OF PR. CIT VS. MOHD. RIZWAN (SUPRA) HAS FRAMED THE FOLLOWI NG TWO QUESTIONS BESIDES OTHERS, WHICH ARE REPRODUCED BELOW: '(I) WHETHER NOTICE UNDER SECTION 148 OF ACT, 1 961 IS A PROCEDURAL STEP OR JURISDICTIONAL. (II) WHETHER NOTICE ISSUED BY AN AUTH ORITY HAVING NO JURISDICTION CAN ATTAIN VALIDITY BY REFERRING TO SECTION 292BB OF ACT, 1961 ONLY FOR THE REASON THAT ASSESSEE PART ICIPATED BEFORE TRANSFEREE ASSESSING AUTHORITY. THE HON'BLE COURT VIDE ORDER DATED 30/03/2017 HAS C ONSIDERED THE APPLICABILITY OF SECTION 292 BB WHEREIN IT HAS BEEN HELD THAT NOTICE ISSUED U/S 147/148 IS A JURISDICTIONAL STEP AND IT CANNOT BE TREATED TO BE MERE IRREGULARITY CURABLE U/S 292 BB OF THE ACT. FOR TH E SAKE OF COMPLETENESS, THE FINDINGS OF HON'BLE HIGH COURT FROM PARA 45 TO 57 ARE REPRODUCED BELOW: 45. WHEN A NOTICE UNDER SECTION 147/148 ISSUED IS A JURISDICTIONAL STEP, IT CANNOT BE TREATED TO BE MER E IRREGULARITY CURABLE UNDER SECTION 292BB. IN FACT, SECTION 292BB HAS NO APPLICATION TO A CASE WHERE NO VALID NOTICE HAS BEE N ISSUED BY COMPETENT A.O. THIS IS CLEAR FROM A BARE READING OF SECTION 292BB OF ACT, 1961 WHICH READS AS UNDER:- '292BB. WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDINGS OR CO-OPERATED IN ANY INQUIRY RELATING TO AN ASSESS MENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UN DER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERV ED UPON HIM, HAS BEEN DULY SERVED UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE P RECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDING OR INQU IRY UNDER THIS ACT THAT THE NOTICE WAS- (A) NOT SERVED UPON HIM; OR (B) NOT SERVED UPON HIM IN TIME; OR (C) SERVED UPON HIM IN AN IMPROPER MANNER: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHERE THE I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 14 ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT.' 46. THE CURABILITY PERMITTED UNDER SECTION 292BB IS WITH REGARD TO SERVICE OF NOTICE UPON ASSESSEE AND NOT W ITH REGARD TO COMPETENCE OF AUTHORITY WHO HAS ISSUED NOTICE. 47. A SIMILAR QUESTION WAS CONSIDERED IN COMMISSIONER OF INCOME TAX, GUJARAT-II VS. KURBAN HUSSAIN IBRAHIMJI MITHIBORWALA 1972 (4) SCC 394 AND COURT SAID 'INCOME TAX OFFICER'S JURISDICTION TO REOPEN AN ASSESSMENT UNDER SECTION 34 DEPENDS UPON ISSUANCE OF A VALID NOTICE. IF NOTICE ISSUED BY HIM IS INVALID FOR ANY REASON, ENTIRE PRO CEEDINGS TAKEN BY HIM WOULD BECOME VOID FOR WANT OF JURISDIC TION.' COURT THEN HELD THAT NOTICE WAS INVALID AS A.O. HAD NO JURISDICTION TO REVISE ASSESSMENT THEN IT CANNOT BE TREATED TO BE MERE IRREGULARITY SO AS TO VALIDATE PROCEEDINGS OF ASSESSMENT IF THE ASSESSEE HAD PARTICIPATED. 48. SIMILAR IS THE VIEW TAKEN BY A FULL BENCH OF TH IS COURT IN LAXMI NARAIN ANAND PRAKASH VS. COMMISSIONER OF SALE S TAX, LUCKNOW AIR 1980 ALL 198. 49. THE CONTENTION OF LEARNED COUNSEL FOR REVENUE T HAT PARTICIPATION OF ASSESSEE BEFORE JURISDICTIONAL A.O . WOULD OPERATE AS ACQUIESCENCE OR WAIVER AND WILL NOT INVA LIDATE PROCEEDINGS IS THOROUGHLY MISCONCEIVED. 50. IN KARNAL IMPROVEMENT TRUST, KARNAL VS. SMT. PRAKASH WANTI AND ANOTHER (1995) 5 SCC 159, COURT SAID THAT ACQUIESCENCE DOES NOT CONFER JURISDICTION AND ERRONEOUS INTERPRETATION SHOULD NOT BE PERMITTED TO PERPETUAT E AND PERPETRATE DEFEATING OF LEGISLATIVE ANIMATION. 51. IN ABDUL QAYUME VS. COMMISSIONER OF INCOME TAX 1990 (184) ITR 404, COURT SAID 'AN ADMISSION OR AN ACQUI ESCENCE CANNOT BE A FOUNDATION FOR ASSESSMENT WHERE THE INC OME IS RETURNED UNDER AN ERRONEOUS IMPRESSION OR MISCONCEP TION OF LAW.' 52. IT IS WELL SETTLED THAT A JURISDICTION CAN NEIT HER BE WAIVED NOR CREATED EVEN BY CONSENT AND EVEN BY SUBMITTING TO JURISDICTION, AN ASSESSEE CANNOT CONFER UPON ANY JU RISDICTIONAL AUTHORITY, SOMETHING WHICH HE LACKED INHERENTLY. I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 15 53. EVEN IF, IT CAN BE SAID THAT ASSESSEE SUBMITTED TO JURISDICTION OF A.O., LAW IS THAT ASSESSEE CANNOT C ONFER JURISDICTION ON AN AUTHORITY WHO DID NOT HAVE THE S AME AND WE FIND SUPPORT FROM COMMISSIONER OF INCOME TAX VS. HA RI RAJ SWARUP AND SONS (1982) 138 ITR 462 (ALLD.). 54. IN MIR IQBAL HUSAIN VS. STATE OF U.P. 1963 ( 50) ITR 40, IT WAS HELD THAT REQUIREMENT OF VALID NOTICE CANNOT BE WAIVED. THE MERE FACT THAT ASSESSEE FILED RETURN OF INCOME PURSUANT TO INVALID NOTICE WOULD NOT RENDER NOTICE VALID OR VALIDATE SUBSEQUENT PROCEEDINGS WHICH ARE VITIATED IN LAW FO R WANT OF VALID NOTICE. 55. IN RAZA TEXTILE LTD. VS. INCOME TAX OFFICER, RA MPUR (1973) 87 ITR 539 (SC), COURT SAID THAT IT IS INCOM PREHENSIBLE TO THINK THAT A QUASI-JUDICIAL AUTHORITY LIKE A.O. CAN ERRONEOUSLY DECIDE A JURISDICTIONAL FACT AND THEREAFTER PROCEED TO IMPOSE A LEVY ON A CITIZEN. 56. IF AN ORDER IS PASSED BY A JUDICIAL OR QUASI-JU DICIAL AUTHORITY HAVING NO JURISDICTION, IT IS AN OBLIGATION OF APPE LLATE COURT TO RECTIFY THE ERROR AND SET ASIDE ORDER PASSED BY AUT HORITY OR FORUM HAVING NO JURISDICTION. THIS IS WHAT WAS HELD IN STATE OF GUJARAT VS. RAJESH KUMAR CHIMANLAL BAROT AND ANOTHE R AIR 1996 SC 2664. 57. IN VIEW OF ABOVE DISCUSSION, WE HAVE NO MANNER OF DOUBT TO ANSWER ALL THE FOUR QUESTIONS AGAINST REVENUE AND I N FAVOUR OF ASSESSEE. 13. IN VIEW OF THE ABOVE JUDICIAL PRECEDENTS AND FA CTS AND CIRCUMSTANCES OF THE CASE, GROUND NO.2 OF THE APPEAL IS ALLOWED. SINCE NOTHING WAS ARGUED ON THE MERITS OF THE CASE THE SAME HAS NOT B EEN ADJUDICATED. 14. IN NUTSHELL, THE APPEAL OF THE ASSESSEE IS ALLO WED. (ORDER PRONOUNCED IN THE OPEN COURT ON 25/09/2020) SD/. ( T. S. KAPOOR ) ACCOUNTANT MEMBER DATED:25/09/2020 *SINGH I.T.A. NO.482/LKW/2019 ASSESSMENT YEAR:2010-11 16 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. . CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW