Sh. Suresh Kumar, Bathinda V. The Income-tax Officer, Bathinda

ITA 498/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8877 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-11-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 28-07-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Section: 143(3); 147; 69; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.498(ASR)/2014 ASSESSMENT YEAR:2005-06 PAN:AMGPK5985L SH. SURESH KUMAR VS. INCOME TAX OFFICER, L/H LATE SH. SANT RAM, WARD-1(1), BATHINDA. 6329, MATA RANI WALI GALI, BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N.ARORA, ADVOCATE RESPONDENT BY:SMT. RATINDER KAUR, DR DATE OF HEARING: 19/11/2015 DATE OF PRONOUNCEMENT: 08/02/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT YE AR 2005-06 AGAINST THE ORDER DATED 20.04.2014, PASSED BY THE L D. CIT(A), BATHIDNA. THE ASSESEE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: 1. THAT THE CIT(A) ERRED ON FACTS AND LAW IN UPHOL DING THE VALIDITY OF PROCEEDINGS INITIATED BY THE AO U/S 147 /148 WHICH ARE VOID ABINITIO AS THE NOTICE U/S 148 HAS BEEN SERVED ON ONE LEGAL HEIR I.E. SH. SURESH KUMAR AND NO NOTICE U/S 148 WAS SERVED ON SH. NARSH KUMAR AND SH. VINOD KUMAR, THE OTHER LEGAL HEIRS OF THE DECEASED SH. SA NT RAM. THE CIT(A) HAS NOT PASSED A SPEAKING ORDER WHILE ADJUDICATING THIS ISSUE IN SUMMARY MANNER. 2. THAT THE CIT(A) ERRED ON FACTS AND LAW IN CONFIR MING THE ADDITION OF RS.5,15,000/- MADE BY THE AO ON ACCOUN T OF ALLEGED FAILURE OF THE ASSESSEE TO EXPLAIN THE SOUR CE OF CASH DEPOSITS IN THE ACCOUNT OF THE FATHER BEING ONE OF THE THREE LEGAL HEIRS BECAUSE THE AASSESSEE BEING EN OF THE L EGAL HEIRS 2 CANNOT BE HELD RESPONSIBLE FOR EXPLAINING THE SOURC E OF DEPOSITS OF CASH BY THE FATHER IN HIS SAVING ACCOU NT. 3. THAT THE CIT(A) ERRED ON FACTS AND LAW IN CONFIR MING THE ADDITION OF RS.5,15,000/- MADE BY THE AO ON ACCOUNT OF ALLEGED FAILURE OF THE ASSESSEE TO EXPLAIN THE SOUR CE OF CASH DEPOSITS IN THE ACCOUNT OF THE FATHER WITHOUT PROPE RLY CONSIDERING THE EXPLANATION ALONGWITH DOCUMENTARY EVIDENCE FURNISHED BY THE ASSESSEE. 2. THE FACTS OF THE CASE ARE THAT VIDE ORDER DATED 21.12.2010 PASSED UNDER SECTION 144 OF THE ACT, THE ASSESSMENT OF SH. SANT RAM FATHER OF THE PRESENT ASSESSEE WAS COMPLETED, TREATING THE PE AK AMOUNT OF CASH OF RS.9,65,000/-, RESULTING HIS INCOME FROM UNDISCLOSE D SOURCES UNDER SECTION 69 OF THE I.T. ACT, 1961. VIDE ORDER DATED 31.10.2012, THE LD. CIT(A) QUASHED THE ASSESSMENT, HOLDING THE SAME TO HAVE BEEN FRAMED ON A DEAD PERSON SINCE THE ASSESSEES FATHER SH. SA NT RAM HAD ALREADY EXPIRED ON 26.05.2009. A NOTICE U/S 148 OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE, AS THE LEGAL REPRESENTATIVE OF SH. SANT RAM, DECEASED AND THE SAME AMOUNT OF RS.9,65,000/- WAS A SSESSED U/S 143(3) OF THE ACT, VIDE ORDER DATED 04.03.2013. BEF ORE THE LD. CIT(A), THE ASSESSEE RAISED THE FOLLOWING GROUNDS: THAT THE PROCEEDINGS INITIATED BY THE AO U/S 147/1 48 ARE VOID ABINITIO BECAUSE OF THE FACT THAT THE NOTICE U/S 14 8 HAS BEEN SERVED ON ONE LEGAL HEIR I.E. SURESH KUMAR AND NO N OTICE U/S 148 WAS SERVED ON SH. NARESH KUMAR AND SH. VINOD KUMAR, THE OTHER LEGAL HEIRS OF THE DECEASED SH. SANT RAM. 3. THE LD. CIT(A) ASKED FOR A REMAND REPORT FROM TH E AO. IN THE REMAND REPORT SUBMITTED BY THE AO, IT WAS STATED BY THE AO AS FOLLOWS IN THE RELEVANT PARA 7, AT PAGE 6: 3 THE CONNECTION RAISED BY THE COUNSEL IS ABSURD. IT MAY BE MENTIONED THAT ASSESSMENT WAS MADE IN THE CASE OF S H. SANT RAM VIDE ORDER DATED 21.12.2010 AND THE SAME WAS QUASHE D BY THE CIT(A0 AS SH. SANT RAM ALREADY EXPIRED ON 26.05.200 9. THE APPEAL AGAINST THE ASSESSMENT ORDER WAS FILED BY SH . SURESH KUMAR BEING THE LEGAL HEIR AND WAS NOT FILED BY ALL THE LEGAL HEIRS. THE ASSESSEE IS TAKING SUCH PLEAS AS THE DEPARTMENT CANNOT ISSUE NOTICE IN THE HANDS OF OTHER PERSONS AT THIS POINT OF TIME. 4. THUS, AS PER THE REMAND REPORT, THE STAND OF THE AO WAS THAT SINCE THE APPEAL AGAINST THE ASSESSMENT ORDER HAS BEEN FI LED BY SH. SURESH KUMAR BEING THE L/H OF LATE SH. SANT RAM AND THE A PPEAL HAS NOT BEEN FILED BY THE OTHER L/HS, AND SINCE THE ASSESSEE H AD TAKEN OBJECTION FOR NON-ISSUANCE OF REASSESSMENT NOTICES TO THE OTHER L /HS OF THE DECEASED SH. SANT RAM ONLY BELATEDLY, THERE WAS NO MERIT IN THE SAME. 5. THE LD. CIT(A) DISMISSED THIS GROUND OF THE ASSE SSEE BY MERELY HOLDING AS FOLLOWS: THE ABOVE SAID GROUNDS OF APPEAL DESERVES TO BE DI SMISSED BECAUSE AS STATED BY THE AO THE APPEAL AGAINST ORDE R U/S 143(30 AGAINST SH. SANT RAM DECEASED FATHER OF THE APPELLA NT WAS FILED BY SH. SURESH KUMAR. HENCE, THE GROUNDS OF APPEAL IS D ISMISSED. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED, AS BEFORE THE AUTHORITIES BELOW, THAT THE PROCEEDINGS INITIATED U /S 147/148 OF THE ACT ARE VOID ABINITIO, SINCE NOTICE U/S 148 OF THE ACT WAS SERVED ONLY ON ONE L/H SH. SURESH KUMAR AND NO NOTICE U/S 148 WAS SERV ED ON SH. NARESH KUMAR AND SH. VINOD KUMAR, THE OTHER L/HS OF THE DE CEASED SH. SANT RAM. 7. ON THE OTHER HAND, THE LD. DR HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER, REITERATING THE STAND OF THE DEPART MENT THAT IT REMAINS 4 UNDISPUTED THAT THE APPEAL AGAINST THE ASSESSMENT O RDER WAS PREFERRED BY SH. SURESH KUMAR AND NOT BY THE OTHER L/HS OF S H. SANT RAM, I.E., SH. NARESH KUMAR & SH. VINOD KUMAR; AND THAT EVEN T HE OBJECTION REGARDING NON SERVICE OF NOTICE U/S 148 ONLY ON SH. SURESH KUMAR AND NOT ON SH. NARESH KUMAR & SH. VINOD KUMAR, THE OTHE R L/HS OF THE DECEASED SH. SANT RAM WAS RAISED AT A MUCH BELATED STAGE BY THE ASSESSEE. 8. HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD, IT IS SEEN THAT IT REMAINS UND ISPUTED THAT SH. SANT RAM, THE ORIGINAL ASSESSEE EXPIRED ON 26.05.2009 AN D THE ASSESSMENT U/S 144 OF THE ACT WAS COMPLETED VIDE ORDER DATED 2 1.12.2010 WITHOUT BRINGING ALL THE L/HS OF THE DECEASED SH. SANT RAM. SH. SURESH KUMAR IN THE APPEAL FILED BEFORE THE LD. CIT(A), TOOK SPE CIFIC OBJECTION THAT SINCE NO NOTICE U/S 148 WAS SERVED ON THE OTHER L/HS OF SH. SANT RAM, DECEASED, I.E. SH. NARESH KUMAR & VINOD KUMAR, THE INITIATION AND COMPLETION OF REASSESSMENT WAS BAD IN LAW. THE LD. CIT(A) HAS REJECTED THIS CONTENTION SUMMARILY, BY OBSERVING THAT THE AP PEAL AGAINST THE ASSESSMENT ORDER WAS FILED ONLY BY SH. SURESH KUM AR AND NOT BY SH. NARESH KUMAR & SH. VINOD KUMAR, THE OTHER L/HS OF T HE DECEASED SH. SANT RAM. 9. IN CIT VS. JAI PARKASH SINGH, 219 ITR 737 (SC) , THE HONBLE SUPREME COURT HELD THAT AN OMISSION TO SERVE OR AN Y DEFECT IN THE SERVICE OF NOTICES PROVIDED BY PROCEDURAL PROVISION S DOES NOT EFFACE OR 5 ERASE THE LIABILITY TO PAY TAX, WHERE SUCH LIABILIT Y IS CREATED BY DISTINCT SUBSTANTIVE PROVISIONS (CHARGING SECTIONS); THAT AN Y SUCH OMISSION OR DEFECT MAY RENDER THE ORDER IRREGULAR, DEPENDING UP ON THE NATURE OF THE PROVISION NOT COMPLIED WITH, BUT CERTAINLY NOT VOID OR ILLEGAL. IT WAS HELD, ON THE FACTS OF THE CASE, THAT THE TRIBUNAL WAS COR RECT IN HOLDING THAT NON-SERVICE OF NOTICE U/S 143(2) OF THE ACT TO NINE OUT OF TEN LEGAL REPRESENTATIVES OF THE DECEASED ASSESSEE DID NOT IN VALIDATE THE ASSESSMENT ORDER OF THE AO AND THAT IT WAS AT BEST AN IRREGULARITY FOR WHICH THE APPELLATE ASSISTANT COMMISSIONER WAS JUST IFIED IN SETTING ASIDE THE ASSESSMENT AND IT WAS NOT A FIT CASE FOR CANCELLATION OF THE ASSESSMENT. 10. THUS, IN KEEPING WITH JAI PARKASH SINGH (SUPR A), THE LAW OF THE LAND, AS LAID DOWN BY THE HONBLE SUPREME COURT IS CLEAR THAT NON SERVICE OF NOTICE ON SOME OF THE L/HS OF THE DECEAS ED ASSESSEE WILL NOT INVALIDATE THE ASSESSMENT. IT IS AN IRREGULARITY WH ICH CAN BE REGULARIZED AND THE LIABILITY TO PAY TAX IS CREATED BY CHARGIN G PROVISION. ACCORDINGLY, THIS MATTER IS REMITTED TO THE FILE OF THE AO, TO B E DECIDED DENOVO, IN ACCORDANCE WITH LAW, KEEPING IN VIEW THE DECISION O F THE HONBLE SUPREME COURT IN JAI PARKASH SINGH (SUPRA) AND BY SERVING THE REASSESSMENT NOTICES ON THE REMAINING TWO LEGAL RE PRESENTATIVES OF THE DECEASED SH. SANT RAM, I.E. SH. NARESH KUMAR & SH. VINOD KUMAR. THIS, FRESH ASSESSMENT, HOWEVER, OBVIOUSLY IS SUB JECT TO THE RELEVANT LIMITATION UNDER THE PROVISIONS OF THE ACT. ORDERED ACCORDINGLY. 6 11. IN VIEW OF THE ABOVE, FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. 12. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08/02/2016 SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 08/02/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:SH. SURESH KUMAR L/H OF LATE SH. SA NT RAM, BATHINDA. 2. THE ITO, WARD 1(1), BATHINDA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.