SHRI MUKESH GOYAL, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 516/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6384 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA JCIT DHK
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Period of limitation; Difference of opinion; Assessment record; Time period of passing order; Change of opinion; Reassessment proceedings
• Section: 143(3); 50C; 142(1); 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH HKKXPUN ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 516/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10. SHRI MUKESH GOYAL, B-539A, GAUTAM MARG, NIRMAN NAGAR, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 2(5), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAGPG 5029 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. SEEMA MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14.06.2018. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16/07/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 1 ST JANUARY, 2018 OF LD. CIT (A), KOTA FOR THE ASSESSMENT YEAR 2 009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. CIT (A) ERRED IN CONFIRMING THE ACTION OF LD. AO IN RE OPENING OF ASSESSMENT U/S 147 WHEN NOTICE U/S 148 WAS NEVER SE RVED UPON THE ASSESSEE AND LATER ON IT WAS FOUND THAT SAME WA S SENT ON WRONG ADDRESS THEREFORE, EVEN IF THE SAME IS SENT T HROUGH REGISTERED POST WILL NOT BE SUFFICIENT AND PROPER S ERVICE OF NOTICE U/S 148, THUS THE REASSESSMENT ORDER SO PASSED IS V OID AB INITIO AND DESERVES TO BE QUASHED. 2 ITA NO. 516/JP/2018 SHRI MUKESH GOYAL, JAIPUR. 1.1 THAT, THE LD. CIT (A) HAS FURTHER ERRED IN CONFIRMI NG THE REASSESSMENT ORDER SO PASSED BY LD.AO WITHOUT DISPO SING THE OBJECTIONS RAISED BY ASSESSEE CHALLENGING THE NOTIC E ISSUED U/S 148, WHICH IS AGAINST THE LAW SETTLED BY APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. DCIT (2003) 259 ITR 19 (SC). APPELLANT PRAYS REASSESSMENT ORDER PASSED BY LD. AO IS VOID AB INITIO AND DESERVES TO BE QUASHED AND CONSE QUENT ADDITIONS DESERVES TO BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT (A) HAS ERRED IN CONFIRMING THE ORDER PASSED BY LD.AO U/S 144, WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF BEIN G HEARD. APPELLANT PRAYS ORDER SO PASSED IS BAD IN LAW AND D ESERVES TO BE QUASHED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT (A) ERRED IN NOT CONSIDERING THE PLEA OF ASSESS EE THAT ASSESSEE NEVER OWNED PROPERTY SITUATED AT A-3/4, PA SCHIM VIHAR, AJMER ROAD, JAIPUR AND RATHER WAS OWNING RES IDENTIAL PROPERTY AT A-3/4, PASCHIM VIHAR, NEW DELHI, WHICH WAS NEVER SOLD BY ASSESSEE AND THUS QUESTION OF NON DISCLOSUR E OF SALE TRANSACTION THEREOF OF THE PROPERTY A-3/4, PASCHIM VIHAR, AJMER ROAD, JAIPUR IN RETURN OF INCOME FILED DID NOT ARIS E. APPELLANT PRAYS ADDITION SO MADE DESERVES TO BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT (A) HAS FURTHER ERRED IN CONFIRMING THE ACTION OF LD. AO IN REOPENING THE ASSESSMENT FOR INVOKING THE PROVISION S OF SECTION 50C. APPELLANT PRAYS SECTION 50C IS DEEMING PROVISI ON AND AS PER SETTLED POSITION OF LAW, ASSESSMENT CANNOT BE R EOPENED SOLELY TO GIVE EFFECT TO DEEMING FICTION, THUS ADDI TION MADE DESERVES TO BE DELETED. 5. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF APPEAL. GROUND NO. 1 IS REGARDING REOPENING OF ASSESSMENT U NDER SECTION 147 WHEN NOTICE U/S 148 WAS NOT SERVED UPON THE ASS ESSEE. 2. THE ASSESSEE IS AN INDIVIDUAL AND E-FILED THE RE TURN OF INCOME ON 30 TH SEPTEMBER, 2009 WITH THE JURISDICTIONAL ITO WARD/CI RCLE 25(4), NEW DELHI. THE 3 ITA NO. 516/JP/2018 SHRI MUKESH GOYAL, JAIPUR. ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 16 .12.2011. SUBSEQUENTLY, THE ITO WARD 2(5) JAIPUR RECEIVED INFORMATION OF TRANSF ER OF PROPERTY BY THE ASSESSEE VIDE SALE DEED DATED 23 RD MARCH, 2009 AND ISSUED NOTICE UNDER SECTION 148 ON 23 RD MARCH, 2016 SENT THROUGH REGISTERED POST AT THE ADD RESS GIVEN IN THE SALE DEED DATED 23 RD MARCH, 2009. HOWEVER, THE SAID NOTICE ISSUED U/S 1 48 OF THE IT ACT WAS DISPATCHED AT THE WRONG ADDRESS AT JAIPUR WAS NOT S ERVED ON THE ASSESSEE. IN THE MEANTIME, IN RESPONSE TO NOTICE ISSUED UNDER SECTIO N 142(1) ONE SHRI S.C. GUPTA, CA APPEARED ON BEHALF OF THE ASSESSEE AND SUBMITTED THAT THE TRANSACTION IN QUESTION DOES NOT RELATE TO THE ASSESSEE. NEITHER THERE WAS ANY RETURN OF INCOME IN RESPONSE TO THE NOTICE UNDER SECTION 148 NOR ANY OT HER DOCUMENTS OR DETAILS WERE FILED BY THE ASSESSEE. THEREFORE, THE REASSESSMENT ORDER WAS PASSED EX PARTE UNDER SECTION 148/144 ON 5 TH DECEMBER, 2016. THE ASSESSEE CHALLENGED THE ACTIO N OF THE AO BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE SUBMITTED THAT THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) BY THE ITO DELHI WHO HA S THE JURISDICTION OVER THE ASSESSEE AND, THEREFORE, THE NOTICE ISSUED BY THE I TO JAIPUR UNDER SECTION 148 IS WITHOUT JURISDICTION. HE HAS FURTHER CONTENDED THA T THE NOTICE WAS EVEN SENT AT THE WRONG ADDRESS AND NOT AT THE CORRECT ADDRESS OF THE ASSESSEE AT DELHI AND, THEREFORE, IN THE ABSENCE OF SERVICE OF NOTICE ISSU ED UNDER SECTION 148, THE INITIATION OF PROCEEDINGS IS ILLEGAL AND CONSEQUENTIAL REASSES SMENT IS NOT SUSTAINABLE. THE AO ISSUED NOTICE UNDER SECTION 148 IN A CASUAL MANNER AND BASED ON INCORRECT FACTS WITHOUT HAVING REASONS TO BELIEVE THAT THE INCOME A SSESSABLE TO TAX HAS ESCAPED ASSESSMENT. FURTHER, WHEN THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 4 ITA NO. 516/JP/2018 SHRI MUKESH GOYAL, JAIPUR. 143(3) THEN THE REOPENING OF THE ASSESSMENT IS BASE D ON CHANGE OF OPINION. THE LD. A/R HAS FURTHER CONTENDED THAT THE ASSESSMENT WAS C OMPLETED BY THE AO WITHOUT DISPOSING OFF OBJECTION RAISED BY THE ASSESSEE AGAI NST THE REOPENING OF THE ASSESSMENT. IN SUPPORT OF HIS CONTENTION, HE HAS R ELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. HOTLINE INTERNA TIONAL PVT. LTD., 296 ITR 333 (DELHI) AND SUBMITTED THAT THE SERVICE OF NOTICE BY AFFIXTURE WITHOUT MAKING ANY EFFORT TO LOCATE THE ASSESSEE IS NOT A PROPER SERVI CE. THOUGH THE LD. A/R APPEARED BEFORE THE AO, HOWEVER, THE ONUS IS ON THE REVENUE TO SHOW THAT THE PROPER SERVICE OF NOTICE HAS BEEN EFFECTED UNDER SECTION 148 OF TH E ACT ON THE ASSESSEE. THE REASSESSMENT PROCEEDINGS FINALIZED BY THE AO WITHOU T EFFECTING PROPER SERVICE OF NOTICE ARE INVALID AND LIABLE TO BE QUASHED. HENCE , THE LD. A/R HAS SUBMITTED THAT THE REOPENING AS WELL AS THE REASSESSMENT ORDER ARE INVALID AND LIABLE TO BE QUASHED. ON MERITS, HE HAS SUBMITTED THAT THE AO H AS PASSED THE IMPUGNED ORDER EX PARTE AS THERE WAS NO SERVICE ON THE ASSESSEE. 3.1. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED T HAT THE AO HAS ISSUED THE NOTICE U/S 148 BASED ON THE INFORMATION RECEIVED AS THE ASSESSEE HAS TRANSFERRED THE PROPERTY VIDE SALE DEED DATED 23 RD MARCH, 2009. THE NOTICE WAS ISSUED AT THE ADDRESS GIVEN IN THE SALE DEED AT DELHI. HOWEVER, THE POSTAL AUTHORITIES MUST HAVE GIVEN THE WRONG PIN CODE WHILE REGISTERING THE LETT ER AND, THEREFORE, IT WAS SENT AT THE WRONG ADDRESS. THE LD. D/R HAS ALSO PRODUCED T HE ASSESSMENT RECORD AND SUBMITTED THAT SUBSEQUENTLY THE ASSESSEE HAS GOT HI S ADDRESS TRANSFERRED TO JAIPUR AND FILED HIS RETURN OF INCOME AT JAIPUR JURISDICTI ON. THEREFORE, AT THE TIME OF ISSUING 5 ITA NO. 516/JP/2018 SHRI MUKESH GOYAL, JAIPUR. THE NOTICE UNDER SECTION 148 THE ASSESSEE ALREADY S HIFTED TO JAIPUR. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ADDRESS GIVEN IN THE SALE DEED IS A-3/4, PASCHIM VIHAR, NEW DELHI. THE SAME ADDRESS IS GIVEN IN THE NOTICE ISSUED UNDER SECTION 148, HOWEVER IN THE REGISTERED POSTAL RECEIPT THE ADDRES S OF THE ASSESSEE IS GIVEN AS A- 3/4 PASCHIM VIHAR, JAIPUR WITH PIN CODE 302 006. T HUS IT APPEARS THAT THERE WAS A MISTAKE IN WRITING THE ADDRESS AT THE STAGE OF DISP ATCH OF NOTICE. THE AO THOUGH ISSUED THE NOTICE AT THE CORRECT ADDRESS OF THE ASS ESSEE, HOWEVER, THE NOTICE WAS DISPATCHED AT THE WRONG ADDRESS DUE TO SOME MISTAKE S IN WRITING THE ADDRESS ON THE ENVELOPE. THE ASSESSEE HAS NOT DISPUTED EVEN THE F ACT THAT BY THE TIME NOTICE DATED 23 RD MARCH, 2016 WAS ISSUED BY THE AO, THE ASSESSEE HAD ALREADY SHIFTED TO JAIPUR AND RETURN OF INCOME FOR THE SUBSEQUENT ASSE SSMENT YEARS WERE ALSO FILED AT JAIPUR JURISDICTION. THUS IT IS APPARENT THAT EVEN IF THE SAID NOTICE UNDER SECTION 148 WOULD HAVE BEEN SENT AT THE DELHI ADDRESS OF THE AS SESSEE, THE SAME COULD NOT BE SERVED ON THE ASSESSEE BECAUSE OF SHIFTING OF THE A SSESSEE FROM DELHI TO JAIPUR. THE APPEARANCE OF THE LD. A/R ON BEHALF OF THE ASSE SSEE IS NOT IN DISPUTE THOUGH THE LD. A/R HAS SUBMITTED THAT THE APPEARANCE WILL NOT DISCHARGE THE AO FROM EFFECTING A PROPER AND VALID SERVICE. IT IS PERTINENT TO NOTE THAT ONCE THE ASSESSEE HAS CAUSED APPEARANCE BEFORE THE AO BUT DID NOT FILE THE RETUR N OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 148 THEN THE QUESTION ARISES WHETHER THE NON DISPOSAL OF OBJECTIONS OF THE ASSESSEE BEFORE PASSING THE REASSESSMENT ORDER IS REQUIRED OR NOT. THE QUESTION OF SENDING THE NOTICE U/S 148 AT CORRECT ADDRESS OF THE ASSESSEE AT THE TIME OF 6 ITA NO. 516/JP/2018 SHRI MUKESH GOYAL, JAIPUR. ISSUING THE NOTICE IS DEPENDENT ON THE PRESENT ADDR ESS OF THE ASSESSEE AT THAT TIME. THEREFORE, THE RELEVANT FACTS ON THIS POINT ARE REQ UIRED TO BE VERIFIED FROM THE ASSESSMENT RECORD OF THE ASSESSEE FOR THE SUBSEQUEN T YEARS AS THE ASSESSEE FILED THE RETURN OF INCOME AT JAIPUR. WE FURTHER NOTE TH AT THE ENTIRE CONTROVERSY HAS ARISEN DUE TO THE FACT THAT THE AO HAS ISSUED THE N OTICE UNDER SECTION 148 AT THE FAG END OF THE LIMITATION ON 23 RD MARCH, 2016 WHEREAS THE INFORMATION REGARDING TRAN SFER OF THE PROPERTY IN QUESTION VIDE SALE DEED DATED 23 RD MARCH, 2009 OUGHT TO HAVE BEEN RECEIVED BY THE AO AT THE TIME OF SAID TRANSAC TION OF SALE ITSELF. IN SUCH A SITUATION THE AO WAS HAVING NO TIME TO TAKE A SECON D ATTEMPT OF EFFECTING THE SERVICE OF THE NOTICE. HENCE IT IS A MATTER OF SERI OUS CONCERN AS TO HOW THE AO WAS SITTING OVER THE INFORMATION FOR SEVEN YEARS AND FI NALLY ISSUED THE NOTICE UNDER SECTION 148 ON 23 RD MARCH, 2016. IT IS PERTINENT TO NOTE THAT THIS IS NOT AN EXCEPTIONAL OR ISOLATED CASE WHERE THE NOTICE UNDER SECTION 148 IS ISSUED AT THE FAG END OF THE LIMITATION PERIOD, BUT WE HAVE BEEN REGU LARLY EXPERIENCING THIS PRACTICE OF ISSUING THE NOTICES AT THE END OF MARCH OF SIXTH YE AR FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THEREFORE, IT IS ENDEMIC IN THE DE PARTMENT THAT THE ASSESSING OFFICERS ARE SITTING OVER THE INFORMATION AND MATER IAL TILL ELEVENTH HOUR OF EXPIRING OF LIMITATION AND ONLY AT THE LAST MOMENT THE NOTICE U NDER SECTION 148 IS BEING ISSUED. THE AUTHORITIES CONCERNED SHOULD TAKE A SERIOUS NOT E OF IT AS WELL AS APPROPRIATE ACTION ON THIS ISSUE. ACCORDINGLY, IN THE FACTS AN D CIRCUMSTANCES OF THE CASE WHEN THE ASSESSMENT WAS FRAMED EX PARTE AND THE OBJECTIO NS RAISED BY THE ASSESSEE HAVE NOT BEEN DISPOSED OFF BY THE AO BY CONSULTING THE R ELEVANT RECORD ABOUT THE CORRECT ADDRESS AT THE RELEVANT POINT OF TIME, WE SET ASIDE THIS MATTER TO THE RECORD OF THE 7 ITA NO. 516/JP/2018 SHRI MUKESH GOYAL, JAIPUR. AO TO DISPOSE OFF ALL THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE NOTICE ISSUED UNDER SECTION 148 AND THEREAFTER FRAME THE REASSESS MENT, IF NEED ARISE, AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. A COPY OF THIS ORDER BE SENT TO THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, JAIPUR AS WELL AS THE CHAIRMAN, CBDT FOR THEIR CONSIDERATION AND APPROPRIATE ACTION. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16/07/201 8. SD/- SD/- HKKXPUN FOT; IKY JKWO (BHAGCHAND) ( VIJAY PAL RAO ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16/07/2018. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SHRI MUKESH GOYAL, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE ITO, WARD 2(5), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. THE PR. CCIT, JAIPUR/ THE CHAIRMAN, CBDT, NEW DE LHI. 6. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 7. XKMZ QKBZY@ GUARD FILE {ITA NO. 516/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR