ITO WD 23(3)(1), MUMBAI V. NAVIND A NANDU (HUF), MUMBAI

ITA 4909/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1033 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 19-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 26-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R M TIWARI
• Assessee Lawyers: C N VAZE
• Section: 142(1); 12; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI T.R. SOOD (AM) ITA NO. 4909/MUM/2009 ASSESSMENT YEAR-2005-06 THE ITO, WARD 23(3)(1), C-10, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400 051 VS. M/S. NAVIN A NANDU (HUF), C/O ANNAPURNA GRAHAK SAHAKARI SANGH, RAMGADH, GOSHALA ROAD, MULUND (W), MUMBAI-400 080 PAN - AADHN3326B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.M. TIWARI RESPONDENT BY: SHRI C.N. VAZE O R D E R PER SHRI D.K. AGARWAL (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 15.6.2009 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS AN HUF AND DEALS IN THE BUSINESS OF KIRANA AS A RETAILER. ON THE BASIS OF INFORMATION RECEIVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS MADE DEPOSITS IN CASH IN HIS SAVINGS BANK ACCOUNT A GGREGATING TO RS. 12,56,450/-, DURING THE FINANCIAL YEAR, THE ASSESSI NG OFFICER ISSUED NOTICE U/S. 142(1) OF THE INCOME TAX ACT, 1961 (THE ACT) CALLING FOR THE RETURN OF INCOME FOR THE A.Y. 2005-06. IN THE ABSENCE OF ANY COMPLIANCE BY THE ASSESSEE, THE ASSESSING OFFICER TREATED THE DEPOSITS IN THE SAVINGS BANK ACCOUNT RS. 12,56,450/ - AS UNEXPLAINED DEPOSITS AND COMPLETED THE ASSESSMENT AT THE SAME INCOME I.E. RS. ITA NO.4909 /M/09 2 12,56,450/-, VIDE ORDER DATED 27.12.2007 PASSED U/S . 144 OF THE ACT. ON APPEAL, THE LD. CIT(A) AFTER CONSIDERING THE ASS ESSEES SUBMISSIONS OBSERVED THAT THE APPELLANT IS A REGULAR ASSESSEE, FILED HIS I.T RETURN FOR A.Y. 2005-06 ON 27.3.2007 WITH THE ITO , WARD 2 3(3)(1), MUMBAI DISCLOSING TOTAL INCOME AT RS. 66,750/-, THE RETURN OF INCOME FILED BY THE APPELLANT WAS PROCESSED U/S. 143(1) ON 12.7.20 07, THE REFUND OF RS. 2,805/- WAS ISSUED TO THE APPELLANT, THE APPELL ANT HAD MADE CASH DEPOSITS IN HIS SAVINGS BANK ACCOUNT MAINTAINED WIT H PUNJAB AND MAHARASHTRA CO-OPERATIVE BANK, MULUND (W) FROM THE LOAN AMOUNT RECEIVED BACK AND ALSO FROM THE CASH AVAILABLE WITH HIM IN HIS INDIVIDUAL CAPACITY, HELD THAT THE CASH DEPOSIT MAD E IN THE SAME BANK ACCOUNT STANDS SATISFACTORILY EXPLAINED, DELETED TH E ADDITION OF RS. 12,56,450/- MADE BY THE ASSESSING OFFICER AND ALLOW ED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING EFFECTIVE GROUND OF APPEAL. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE APPEAL GIVING HIS FINDINGS THAT THE DEPOSITS WERE EXPLAINED WITHOUT G IVING AN OPPORTUNITY TO THE AO AND AFTER APPRECIATING THE FA CT THAT THE ITO(HQ), CIB, PUNE WHO PASSED THE ASSESSMENT OR DER WAS NOT HAVING JURISDICTION OVER THE ASSESSEE. 4. AT THE TIME OF HEARING, THE LD. DR WHILE RELYIN G ON THE ORDER OF THE ASSESSING OFFICER FILED A LETTER DATED 14.6.201 0 OF THE ASSESSING OFFICER INTER ALIA CONFIRMING THAT NO NOTICE U/S. 143(2) HAS BEEN ISSUED IN THIS CASE. HE THEREFORE SUBMITS THAT THE ISSUE MAY BE DECIDED ACCORDINGLY. 5. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESS EE WHILE RELYING ON THE ORDER OF THE LD. CIT(A) SUBMITS THAT THE ISSUE IS ITA NO.4909 /M/09 3 SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE O RDER OF THE TRIBUNAL IN PRAVIN BALUBHAI ZALA VS ITO (2010-(129)-TTJ-0373 (BOM). HE ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNAL. HE THEREFORE SUBMITS THAT THE ORDER PASSED BY THE LD. CIT(A) BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THERE IS NO DISPUTE THAT IN THIS CASE NOTICE U/S. 143(2) HAS NO T BEEN ISSUED. THE ASSESSING OFFICER HAS HIMSELF STATED IN HIS LETTER DATED 14.6.2010 AS UNDER: NO NOTICE U/S. 143(2) HAS BEEN ISSUED IN THE CASE. ON THE BASIS OF THE INFORMATION RECEIVED FROM THE CIB, THE DAO ISSUED NOTICE U/S./ 142(1) CALLING FOR THE RETURN O F INCOME FOR A.Y. 2005-06. THOUGH THE NOTICE WAS DULY SERVED ON THE ASSESSEE THERE WAS NO COMPLIANCE TO THE NOTICE AND THE ASSESSMENT WAS COMPLETED U/S. 144 OF THE I.T. ACT. 7. HAVING REGARD TO THE SPECIFIC PROVISION CONTAINED IN SEC. 143(2) OF THE ACT, THE ISSUANCE OF NOTICE IS MANDATORY UN DER THE SAID SECTION WITHIN 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN OF INCOME WAS FILED WHICH WAS STATED TO HAVE BEEN FILE D ON 27.3.2007, THEREFORE IT WAS LEGALLY OBLIGATED UPON THE ASSESSI NG OFFICER TO HAVE ISSUE THE SAID NOTICE ON OR BEFORE MARCH 31, 2008. IN THE ABSENCE THEREOF THE ASSESSMENT MADE BY THE ASSESSING OFFICE R BEING NOT VALID IN LAW AND LIABLE TO BE ANNULLED. THIS ASPECT HAS ALREADY BEEN COVERED BY QUITE A FEW JUDGEMENTS OF HONBLE HIGH COURTS AN D SUPREME COURT AND TO REFER ONE OF THEM WOULD BE NECESSARY. WE MA Y REFER TO THE JUDGEMENT IN THE CASE OF CIT VS PL. GANDHI(2009) 315 ITR 110 (MAD) WHEREIN IT HAS BEEN HELD THAT HAVING REGARD T O THE SPECIFIC PROVISION CONTAINED IN SECTION 143(2) OF THE ACT, T HE NOTICES OUGHT TO HAVE BEEN ISSUED ON OR BEFORE MARCH 31,1999. THE T RIBUNAL HAD RIGHTLY ANNULLED THE ORDER OF ASSESSMENT. ITA NO.4909 /M/09 4 8. ON MERITS, WE FIND THAT THE REVENUE HAS NOT PLA CED ANY CONTRARY MATERIAL AGAINST THE FINDING OF THE LD. CI T(A) THAT THE CASH DEPOSITS IN PUNJAB & MAHARASHTRA CO-OPERATIVE BANK, MULUND(W) STAND SATISFACTORILY EXPLAINED, WHICH HAS ALSO BEEN ACCEP TED BY THE AO WHILE PROCESSING THE RETURN U/S. 143(1) AND IN GRANTING O F REFUND TO THE ASSESSEE. THIS BEING SO AND IN THE ABSENCE OF MATE RIAL TO SHOW THAT THE SAID ORDER OF ASSESSMENT DT. 12.7.2007 HAS BEE N CANCELLED BY THE HIGHER AUTHORITIES, WE ARE OF THE VIEW THAT THE GRO UNDS RAISED BY THE REVENUE ARE DEVOID OF ANY MERIT AND ACCORDINGLY THE SAME ARE REJECTED. 9. IN THE RESULT, THE REVENUES APPEAL STANDS DISMI SSED. ORDER PRONOUNCED ON THIS 23 RD DAY OF JULY, 2010 SD/- SD/- (T.R. SOOD ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 23 RD JULY, 2010 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR H BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO.4909 /M/09 5 DATE INITIALS 1 DRAFT DICTATED ON: 7.2010 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 7 .2010 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: _________ ______ 9. DATE OF DISPATCH OF ORDER: _________ ______