Alok Mittal, Durgapur V. DCIT, Circle-1(1), Durgapur, Durgapur

ITA 526/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1408 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARVIND AGARWAL
• Keywords: Assessment record
• Section: 148

Judgement Text

I.T.A. NO. 526/KOL./2017 ASSESSMENT YEAR: 2008-2009 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 526/KOL/2017 ASSESSMENT YEAR: 2008-2009 ALOK MITTAL,................... ......APPELLANT PROP. OF MITTAL FINANCIAL SERVICES, 4/25, SUHATTA MALL, CITY CENTRE, DURGAPUR-713 216 [PAN: AEAPM 1485 P] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,........... ......RESPONDENT CIRCLE-1, DURGAPUR, AAYAKAR BHAWAN, CITY CENTRE, DURGAPUR-713 216 APPEARANCES BY: SHRI ARVIND AGARWAL, ADVOCATE, FOR THE ASSESSEE SHRI SAILEN SAMADDAR, ADDL. CIT, D.R., FOR THE DEPA RTMENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 26, 201 7 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 26, 2017 O R D E R PER SHRI P.M. JAGTAP, A.M. .: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), DURGAPUR DATE D 20.01.2017. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS CARRYING ON THE BUSINESS AS SHARE SUB-BROKER. HE ALSO DERIVES I NCOME FROM COMMISSION AS INSURANCE AGENT AND RENTAL INCOME FRO M COMMERCIAL PROPERTIES. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 26.09.2008 DECLARING TOTAL INCOME O F RS.14,84,171/-. IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 1 43(3) VIDE ORDER DATED 19.11.2010, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.15,78,000/-. ON THE BASIS O F AIR INFORMATION, THE I.T.A. NO. 526/KOL./2017 ASSESSMENT YEAR: 2008-2009 PAGE 2 OF 6 SAID ASSESSMENT WAS SUBSEQUENTLY REOPENED BY THE AS SESSING OFFICER AND A NOTICE UNDER SECTION 148 WAS ISSUED BY HIM TO THE ASSESSEE AFTER RECORDING THE REASONS. IN PURSUANCE OF THE SAID NOT ICE, ASSESSMENT UNDER SECTION 143(3)/147 WAS COMPLETED BY THE ASSESSING O FFICER VIDE AN ORDER DATED 29.02.2016 DETERMINING THE TOTAL INCOME OF TH E ASSESSEE AT RS.35,93,080/- AFTER MAKING THE ADDITION OF RS.20,1 5,083/- ON ACCOUNT OF UNDISCLOSED INCOME. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3)/147, AN APPEAL WAS PREFERRED B Y THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND SINCE THE SUBMISSIO NS MADE BY THE ASSESSEE IN SUPPORT OF HIS CASE ON THE ISSUES RAISE D IN THE SAID APPEAL WERE NOT FOUND ACCEPTABLE BY HIM, THE LD. CIT(APPEA LS) UPHELD THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3 )/147 AND DISMISSED THE APPEAL OF THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOW ING GROUNDS:- 1. FOR THAT, IN VIEW OF FACTS AND CIRCUMSTANCES O F THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEAL), DURGAP UR ERRED ON FACTS AS WELL AS IN LAW IN SUSTAINING THE ADDITI ON OF RS.20,15,083/- MADE BY ASSESSING OFFICER AS NET UND ISCLOSED INCOME ON ACCOUNT OF DEPOSITS IN AXIS BANK. 2. FOR THAT, WITHOUT PREJUDICE TO THE ABOVE, LD. C OMMISSIONER OF INCOME TAX APPEAL), DURGAPUR ERRED ON FACTS AS W ELL AS IN LAW IN OBSERVING THAT THERE WAS VERY MEAGRE WITHDRA WAL OF CASH IGNORING THE FACT THAT TOTAL WITHDRAWAL OF RS.15,37,800/- WAS DULY APPEARING IN THE BANK STATE MENT PRODUCED BEFORE HIM AND THE SAID FIGURES WERE ALSO ADMITTED IN THE ASSESSMENT ORDER. 3. FOR THAT, WITHOUT PREJUDICE TO THE ABOVE, LD. C OMMISSIONER OF INCOME TAX(APPEAL), DURGAPUR ERRED ON FACTS AS W ELL AS IN LAW IN NOT CONSIDERING THE SUBMISSION OF THE ASSESE E THAT A SUM OF RS.3,12,566.65 PAID BY A/C PAYEE CHEQUE TO B ONZANA PORTFOLIO LTD. AGAINST RECOVERY OF RS.5,21,582/- AN D BANK CHARGES OF RS.1223.29 WHICH WERE ALSO VERIFIABLE FR OM THE RECORD AND WERE REQUIRED TO BE GIVEN DUE BENEFIT WH ILE MAKING ADDITION AS UNDISCLOSED INCOME. 4. FOR THAT, WITHOUT PREJUDICE TO THE ABOVE AND IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMIS SIONER OF I.T.A. NO. 526/KOL./2017 ASSESSMENT YEAR: 2008-2009 PAGE 3 OF 6 I. TAX (APPEALS),, OUGHT TO HAVE DELETED AT LEAST T HE ADDITION OF RS.18,51,679.94 IN VIEW OF MATERIAL ON RECORD. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E THE TRIBUNAL, THE ASSESSEE HAS ALSO RAISED THE FOLLOWING TWO ADDITION AL GROUNDS AND FILED AN APPLICATION SEEKING ADMISSION OF THE SAME:- 1. BECAUSE THAT THE ID. DCIT, CIRCLE-1, DURGAPUR W AS ERRED IN LAW AS WELL AS IN FACTS IN PASSING OF HIS ORDER U/S 147/143(3) DATED 29TH FEBRUARY 2016 WITHOUT SUPPLYING COPY OF THE REASON RECORDED TO THE APPELLANT, AND HIS SUCH ORDE R IS VOID AB INITIO WHICH IS PASSED IN VIOLATION OF THE PRINC IPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF GK N DRIVESHAFTS (INDIA) LTD REPORTED IN 259 ITR PAGE 19 . 2. BECAUSE THAT THE ID. DCIT, CIRCLE-1, DURGAPUR WA S ERRED IN LAW AS WELL AS IN FACTS IN PASSING OF HIS ORDER U/S 147/143(3) DATED 29TH FEBRUARY 2016 WITHOUT ISSUE OF THE STATU TORY NOTICE U/S 143(2), AND AS SUCH HIS REASSESSMENT ORD ER IS NOT GOOD IN LAW AND VOID AB INITIO. 5. AS THE ISSUES SOUGHT TO BE RAISED BY THE ASSESSE E IN THE ADDITIONAL GROUNDS ARE PURELY LEGAL IN NATURE AND ALL THE FACT S RELEVANT FOR ADJUDICATION OF THE SAME ARE AVAILABLE ON RECORD, T HE ADDITIONAL GROUNDS AS RAISED BY THE ASSESSEE ARE ADMITTED BY ME BY REL YING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL T HERMAL POWER CO. LIMITED VS.- CIT [229 ITR 383 (SC)]. SINCE THE PRE LIMINARY ISSUES ARE RAISED BY THE ASSESSEE IN THE ADDITIONAL GROUNDS CH ALLENGING THE VALIDITY OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER UND ER SECTION 143(3)/147, I NOW PROCEED TO CONSIDER AND DECIDE TH E SAME FIRST ON MERIT. 6. AS REGARDS THE PRELIMINARY ISSUE RAISED IN THE A DDITIONAL GROUND NO. 2, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT NO NOTICE WAS ISSUED BY THE ASSESSING OFFICER UNDER SECTION 143(2) BEFOR E PASSING THE ORDER UNDER SECTION 143(3)/147 AND IN THE ABSENCE OF ISSU E OF SUCH STATUTORY NOTICE, THE ASSESSMENT MADE BY THE ASSESSING OFFICE R UNDER SECTION I.T.A. NO. 526/KOL./2017 ASSESSMENT YEAR: 2008-2009 PAGE 4 OF 6 143(3)/147 IS BAD-IN-LAW AND IS VOID AB INITIO . AS PER THE DIRECTION OF THE TRIBUNAL, THE LD. D.R. HAS PRODUCED THE RELEVANT AS SESSMENT RECORD WHICH SHOWS THAT THE NOTICE UNDER SECTION 143(2) WAS NOT ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE BEFORE FRAMING TH E ASSESSMENT UNDER SECTION 143(3)/147 AND THIS POSITION CLEARLY EVIDEN T FROM THE ASSESSMENT RECORDS IS NOT DISPUTED EVEN BY THE LD. D.R. HE, HO WEVER, HAS RELIED ON THE PROVISIONS OF SECTION 292BB INTRODUCED IN THE STATU TE W.E.F. 1 ST APRIL, 2008 IN SUPPORT OF THE REVENUES CASE THAT THE ASSE SSEE HAVING PARTICIPATED IN THE ASSESSMENT PROCEEDINGS WITHOUT RAISING THE ISSUE OF NON-ISSUANCE OF NOTICE UNDER SECTION 143(2), HE IS PRECLUDED FROM TAKING ANY OBJECTION NOW BEFORE THE TRIBUNAL ABOUT THE NON -ISSUANCE OF NOTICE UNDER SECTION 143(2). THE PROVISIONS OF SECTION 292 BB RELIED UPON BY THE LD. D.R. ARE REPRODUCED HEREUNDER:- 292BB: NOTICE DEEMED TO BE VALID IN CERTAIN CIRCU MSTANCES WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDING O R COOPERATIVE IN ANY INQUIRY RELATING TO AN ASSESSMEN T 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 INQUIRY 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 SHA LL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT. 7. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE , THE PROVISIONS OF SECTION 292BB ARE APPLICABLE WHERE THERE IS A FAILU RE TO SERVE THE NOTICE AND NOT WHERE THERE IS A FAILURE TO ISSUE THE NOTIC E UNDER SECTION 143(2). HE HAS CONTENDED THAT THE ISSUANCE OF NOTICE UNDER SECTION 143(2) BEFORE COMPLETING THE ASSESSMENT IS A STATUTORY REQUIREMEN T AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOO N [321 ITR 362] AND THE FAILURE TO ISSUE NOTICE UNDER SECTION 143(2) IN COMPLIANCE WITH SUCH I.T.A. NO. 526/KOL./2017 ASSESSMENT YEAR: 2008-2009 PAGE 5 OF 6 STATUTORY REQUIREMENT IS NOT COVERED UNDER SECTION 292BB. IN SUPPORT OF THIS CONTENTION, HE HAS RELIED ON THE DECISION OF T HE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ACIT VS.- GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY [379 ITR 14], WHEREIN IT WAS HELD THAT TH E DEEMING FICTION UNDER SECTION 292BB OF THE ACT IS WITH REGARD TO S ERVICE OF NOTICE AND SINCE THE INITIAL REQUIREMENT OF ISSUANCE OF NOTIC E WAS NOT MET BY THE ASSESSING OFFICER, THE DEEMING FICTION UNDER SECTIO N 292BB IS NOT APPLICABLE. IT WAS HELD THAT THERE WAS A DEFECT ON THE PART OF THE ASSESSING OFFICER IN FAILING TO ISSUE NOTICE UNDER SECTION 143(2) WITHIN THE SPECIFIED PERIOD AND SINCE THE SAID DEFECT WAS NOT CURABLE UNDER SECTION 292BB, THE ORDER OF ASSESSMENT PASSED BY TH E ASSESSING OFFICER WAS BAD IN LAW. THE LD. COUNSEL FOR THE ASSESSEE HA S ALSO RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF PRINCIPAL CIT VS.- SHRI JAY SHIV SHANKAR TRADERS PVT. LIMITED (I.T.A. NO. 519 OF 2015 DATED 14.10.2015), WHEREIN IT WAS HELD THAT THE PROVISION OF SECTION 292BB WOULD APPLY IN SO FAR AS FAILURE OF SERVICE OF NO TICE IS CONCERNED AND NOT WITH REGARD TO FAILURE TO ISSUE NOTICE. IT WAS HE LD THAT THE FAILURE OF THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 143 (2) PRIOR TO FINALIZING THE REASSESSMENT ORDER, THEREFORE, CANNOT BE CONDON ED BY REFERRING TO SECTION 292BB OF THE ACT AND SUCH FAILURE IS FATAL TO THE ORDER OF REASSESSMENT. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE KERALA HIGH COURT IN TH E CASE OF TRAVANCORE DIAGNOSTIC PVT. LIMITED VS.- DCIT [390 ITR 167 (KE RALA)], WHEREIN IT WAS HELD THAT IF A NOTICE UNDER SECTION 143(2) HAS NOT BEEN ISSUED, THE ASSESSING OFFICER CANNOT CLAIM THE BENEFIT UNDER SE CTION 292BB OF THE ACT AND IN THE ABSENCE OF NOTICE UNDER SECTION 143(2), PROCEEDINGS OF ASSESSMENT INITIATED, CONDUCTED AND COMPLETED FOR T HE ASSESSMENT YEAR 2009-10 WILL HAVE TO FAIL. 8. KEEPING IN VIEW THE LEGAL POSITION EMANATING FRO M THE VARIOUS JUDICIAL PRONOUNCEMENTS DISCUSSED ABOVE AND HAVING REGARD TO THE FACTS OF THE PRESENT CASE, I FIND MERIT IN THE ADDITIONAL GROUND NO. 2 RAISED BY THE ASSESSEE AND ALLOW THE SAME BY HOLDING THAT THE ASSESSMENT MADE BY I.T.A. NO. 526/KOL./2017 ASSESSMENT YEAR: 2008-2009 PAGE 6 OF 6 THE ASSESSING OFFICER UNDER SECTION 143(3)/147 WITH OUT ISSUANCE OF THE STATUTORY NOTICE UNDER SECTION 143(2) IS BAD IN LAW AND THE SAME IS LIABLE TO BE CANCELLED. I ORDER ACCORDINGLY. 9. AS A RESULT OF THE DECISION RENDERED ABOVE ON TH E PRELIMINARY ISSUE RAISED BY THE ASSESSEE IN ADDITIONAL GROUND NO. 2 C ANCELLING THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECT ION 143(3)/147 BY HOLDING THE SAME TO BE BAD IN LAW, THE ISSUES RAISE D BY THE ASSESSEE IN ADDITIONAL GROUND NO. 1 AS WELL AS IN THE ORIGINAL GROUNDS NO. 1 TO 4 HAVE BECOME INFRUCTUOUS. I, THEREFORE, DO NOT CONSIDER I T NECESSARY TO ADJUDICATE UPON THE SAME. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 26, 2017. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 26 TH DAY OF SEPTEMBER, 2017 COPIES TO : (1) SHRI ALOK MITTAL, PROP. OF MITTAL FINANCIAL SERVICES, 4/25, SUHATTA MALL, CITY CENTRE, DURGAPUR-713 216 (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, DURGAPUR, AAYAKAR BHAWAN, CITY CENTRE, DURGAPUR-713 216 (3) COMMISSIONER OF INCOME TAX (APPEALS), DURGAPU R; (4) COMMISSIONER OF INCOME TAX ,KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.