Subash Malik, V. ITO, Ward-2(3),

ITA 5211/DEL/2003

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0154 (ITAT-DELHI)
• Duration Of Justice: 11 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 20-05-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 28-11-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: H G MALIK
• Keywords: Income from undisclosed sources; Principle of natural justice; Non compliance
• Section: 142(1); 144

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI S.V.MEHTORA, ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA 5211 /DEL/2011 (ASSESSMENT YEAR: 2001 - 02 ) SH SUBHASH MALIK , 642, KISHANPURA, BAGHPAT ROAD, MEERUT VS ITO, WARD - 2(3), MEERUT (APPELLANT) (RESPONDENT) APPELLANT BY : SH. H. G. MALIK ADV, RESPONDENT BY : BRR KUMAR SR. DR DATE OF HEARING 21.05.2014 DATE OF PRONOUNCEMENT 30 .06.2015 O R D E R PER A. T. VARKEY, JUDICIAL MEMBER 1 THIS APPEAL PREFERRED BY ASSESSEE ARIS ES FROM AN ORDER OF CIT(APPEALS) I, NEW DELHI DATED 25.9.2002 AND RELATE S TO ASSESSMENT YEAR 200 1 - 02 . 2 THE GROUNDS RAISED BY ASSESSEE ARE AS UNDER: 1 THAT THE NOTICE DATED 23.1.2002 U/S 142 OF THE I.T. ACT IN THE NAME OF SHRI SUBHASH MALIK S/O ILAM CHANDREQURING HIM TO PREPARE AND FILE/DELIVER INCOME TAX RETURN FOR THE ASSESSMENT YEAR 2001 - 02 ON OR BEFORE 4.2.2002 WAS NOT SERVED ON THE APPELLANT IN ACCORDANCE WITH THE STATUTORY PROVISIONS OF I.T. ACT. NON COMPLIANCE OF SUCH NO TICE ON ACCOUNT OF IMPROPER SERVICE COULD NOT ENTITLE THE ASSESSING OFFICER TO FRAME AN ASSESSMENT U/S 144 OF THE ACT. ON FACTS AND IN LAW, SUCH ASSESSMENT WAS ILLEGAL AND WITHOUT JURISDICTION. 2 2 THAT THE NOTICE U/S 142(1) DATES 23.1.2002 WAS OTHERWISE VA GUE AND INVALID SINCE IT DID NOT INDICATE THE STATUS OF ASSESSEE. THE ASSESSMENT FRAMED ON THE BASIS OF INVALID AND ILLEGAL NOTICE DESERVES TO BE QUASHED BEING ILLEGAL AND WITHOUT JURISDICTION. 3 THAT THE APPELLANT ASSESSEE IN INDIVIDUAL STATUS HAS ALREAD Y FILED HIS RETURN ON 29.11.2002. THERE WAS THUS NO JURISDICTION TO ISSUE NOTICE U/S 142(2) REQUIRING THE APPELLANT ASSESSEE TO FILE RETURN OF INCOME. NON FILING OF RETURN IN RESPONSE TO SUCH NOTIE U/S 142(1) DID NOT AMOUNT TO DEFAULT. 4 THAT THE ASSESSM ENT FRAMED U/S 144 OF THE I.T. ACT IN INDIVIDUAL STATUS AND SUSTAINED BY THE LEARNED CIT(A) DESERVES TO BE QUASHED AND ANNULLED BEING UNTENABLE ON FACTS AND IN LAW. 5(A) THE APPELLANT DID NOT DEPOSIT THE SUM OF RS. 8,25,000/ - TOWARDS SECURITY AND LICENCE F EE WITH THE EXCISE DEPARTMENT. THE PROPORTIONATE INVESTMENT MADE BY THE APPELLANT AS A PARTNER STOOD REFLECTED IN THE BALANCE SHEET FILED ALONGWITH THE I.T. RETURN. THUS ON FACTS AND IN LAW, THERE IS NO JURISDICTION TO TREAT THE DEPOSIT OF RS. 8,25,000/ - AS INCOME FROM UNDISCLOSED SOURCES. (B) THAT THE ADDITION OF RS. 8,25,000/ - DESERVES TO BE DELETED BEING ILLEGAL, VOID WITHOUT JURISDICTION AND IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 6 THAT NON CONSIDERATION OF ALL THE FACTUAL AND LEGAL ASPECTS OF THE CASE BORNE OUT FROM THE APPELLATE RECORDS OF THE CASE WARRANTED RECTIFICATION AND DELETION OF THE IMPUGNED ADDITION. ON FACTS AND IN LAW THE ORIGINAL AS WELL AS THE SUPPLEMENTARY APPELLATE ORDER DESERVE TO BE QUASHED AND ANNULLED BEING ERRONEOUS, ILL EGAL AND VOID. 3 THE FACTS IN BRIEF ARE THAT ON THE BASIS OF INFORMATION RECEIVED FROM DISTRICT EXCISE OFFICER, MEERUT IT WAS OBSERVED THAT THE ASSESSEE W A S ALLOTTED LIQUOR CONTRACT OF SHOP AT MEERUT FOR FINANCIAL YEAR 2001 - 02 AND ASSESSEE DEPOSITED LICE NCE FEE OF RS. 7,50,000/ - AND SECURITY OF RS. 75,000/ - ON 19.3.2001 WHICH F E LL IN FINANCIAL YEAR 2000 - 01 RELEVANT TO ASSESSMENT YEAR 2001 - 02. AS A RESULT OF THE ABOVE A NOTICE U/S 142(1) OF THE ACT WAS ISSUED ON 23.1.2002 AND PUR SUAN T THERETO AN ORDER DATED 5.3.20002 WAS MADE U/S 144 OF THE ACT DETERMINING THE INCOME OF TH E APPELLANT AT RS.8,25,000/ - . ON APPEAL THE CIT(A) IN AN ORDER DATED 25.9.2002 DISMISSED THE APPEAL PREFERRED BY THE APPELLANT. ON FURTHER APPEAL THE TRIBUNAL B Y AN ORDER DATED 8.7.2005 DISMISSED IT AS BARRED BY LIMITATION. HOWEVER ON FURTHER APPEAL THE HONBLE HIGH COURT BY A JUDGMENT DATED 10.7.2009 SET ASIDE THE ORDER OF TRIBUNAL AND MATTER WAS 3 REMANDED FOR DECISION ON MERITS OF THE CASE AFTER GIVING AN OPPOR TUNITY OF HEARING TO THE APPELLANT IN ACCORDANCE WITH LAW AND HENCE THIS APPEAL BEFORE US 4 HAVING REGARD TO CONSIDERED THE RIVAL SUBMISSION S AND PERUS ING THE MATERIAL ON RECORD , W E NOTICE THAT ASSESSEE IN GROUND NO(S) 1 TO 4 HAS CHALLENGED THAT ASSESSMENT FRAMED U/S 144 OF THE ACT WAS VOID, ILLEGAL AND WITHOUT JURISDICTION ON THE FOLLOWING GROUNDS: A) NOTICE U/S 142(1) OF THE ACT ADDRESSED TO THE ASSESSEE WAS VOID AND WITHOUT JURISDICTION SINCE THE RETURN OF INCOME HAD ALREADY BEEN FILED ON 29.11.2001; B) THE AO LOST SIGHT OF THE FACT THAT THE RETURN HAD ALREADY BEEN FILED ON 29.11.2001. ISSUE OF NOTICE U/S 142(1) REQUIRING THE ASSESSEE TO FILE RETURN THUS WAS ILLEGAL AND WITHOUT JURISDICTION SINCE THE RETURN HAD ALREADY BEEN FILED ; C) EVEN OTHERWISE NOTIC E U/S 142(1) WAS NOT SERVED PERSONALLY ON THE ASSESSEE BUT WAS SERVED ON A LADY SMT. SHARMISHTHA WHO HAS NOT AN AUTHORIZED PERSON; 5 FURTHER IN GROUND NO(S) 5(A) AND 5(B) THE APPELLANT HAS CONTENDED THAT APPELLANT DID NOT DEPOSIT THE SUM OF RS. 8,25,000/ - T OWARDS SECURITY AND LICENSE FEE WITH THE E XCISE D EPARTMENT AND PROPORTIONATE INVESTMENT MADE BY THE APPELLANT AS A PARTNER STOOD REFLECTED IN THE BALANCE SHEET FILED ALONGWITH THE I.T. RETURN AND THUS EVEN ON FACTS AND IN LAW, THERE IS NO JURISDICTION TO T REAT THE DEPOSIT OF RS.8,25,000/ - AS INCOME FROM UNDISCLOSED SOURCES. IT HAS BEEN SPECIFICALLY AVERRED THAT ADDITION OF RS.8,25,000/ - IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 6 WE FIND THAT AO HAD MADE THE ADDITION IN AN ORDER U/S 144 OF THE ACT AND THEREFORE NONE OF THE OBJECTION S AS RAISED BEFORE US HAVE BEEN EXAMINED BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE CIT(A) ALSO DID NOT ADJUDICATE THE ABOVE CONTENTION S ON THE GROUND THAT THERE 4 WAS A DELIBERATE NON - COMPLIANCE ON THE PART OF THE APPELLANT AND EX - PARTE ASSESSMENT MADE IN THESE CIRCUMSTANCES WAS FULLY JUSTIFIED. HOWEVER IN THE INTEREST OF JUSTICE AND FACTS ON RECORD WE CONSIDERED I T APPROPRIATE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW FOR DE NOV O ASSESSMENT IN ACCORDANCE W ITH LAW. NEEDLESS TO STATE THAT FAIR AND PROPER OPPORTUNITY BE PROVIDED TO THE ASSESSEE. 7. IN THE RESULT APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 .06.2015 . - SD/ - - SD/ (S.V.MEHROTRA) (A. T. VARKEY ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 /06/2015 *A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI