Shri Kaushal Prakash Singh, Lucknow V. Income Tax Officer-3(2), Lucknow

ITA 539/LKW/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1668 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 03-01-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 29-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Keywords: Reopening of assessment; Principle of natural justice
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW SMC BENCH, LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER ITA NO. 539/LKW/2012 ASSESSMENT YEAR: 2002 - 03 SHRI. KAUSHAL PRAKASH SINGH A - 17/2, INDIRA NAGAR LUCKNOW V. INCOME TAX OFFICER 3(2) LUCKNO W PAN: AHYPS0501P (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 03.01.2013 DATE OF PRONOUNCEMENT: 29.01.2013 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) P ERTAINING TO ASSESSMENT YEAR 2002 - 03. 2 . THIS APPEAL WAS FIXED FOR HEARING ON VARIOUS DATES, BUT IT WAS ADJOURNED AT THE REQUEST OF THE ASSESSEE FOR ONE REASON OR THE OTHER. NOTICE OF HEARING WAS ALSO ISSUED THROUGH REGISTERED A/D FIXING THE APPEAL FOR HEARI NG ON 3.1.2013, BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. SINCE THIS APPEAL WAS ADJOURNED AT A NUMBER OF TIMES, I FIND NO JUSTIFICATION IN FURTHER ADJOURNMENT OF HEARING OF THIS APPEAL. ACCORDINGLY I HEARD THE APPEAL EX - PARTE QUA THE ASSESSEE. 3 . THE ASS ESSEE HAS RAISED VARIOUS GROUNDS WHICH ARE EXTRACTED HEREUNDER: - : - 2 - : 1. BECAUSE THE 'CIT(A)' HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE VALIDITY OF INITIATION OF PROCEEDINGS UNDER SECTION 147 (BY ISSUE OF NOTICE UNDER SECTION 148 DATED 24.2.2006 BY THE AS SESSING OFFICER). 2. BECAUSE ON A DUE CONSIDERATION OF FACTS AND CIRCUMSTANCE OF THE CASE, PARTICULARLY THAT; (A) INITIATION OF PROCEEDINGS IS NOT BASED ON INDEPENDENT APPLICATION OF MIND BY THE ASSESSING OFFICER BUT AT THE BEHEST OF ASSISTANT DIRECTOR OF INCOME - TAX(LNV); (B) T HE 'REASONS RECORDED' WERE MERELY AIMED AT MAKING ROVING AND FISHING ENQUIRIES AND THE ASSESSING OFFICER COULD NOT HAVE PROCEEDED TO ISSUE NOTICE UNDER SECTION 148 SO AS TO CARRY OUT 'VERIFICATION'; (C) IN ANY CASE, REPORT OF THE ASS ISTANT DIRECTOR OF INCOME - TAX (INV.) BEING NOT FORMING PART OF THE 'REASONS RECORDED', THE REASONS RECORDED THEMSELVES ARE VITIATED IN LAW; AND ACCORDINGLY INITIATION OF PROCEEDINGS UNDER SECTION 147 WAS LIABLE TO BE HELD BY THE L D. FIRST APPELLATE AUTHORI TY AS VOID - AB - INITIO. 3. BECAUSE NOTICE UNDER SECTION 148 DATED 24.2.2006 BEING NOT DRAWN, ISSUED AND SERVED IN ACCORDANCE WITH THE PROVISIONS OF LAW AS CONTAINED IN SECTION 282 OF THE ACT READ WITH THE PROVISIONS OF CIVIL PROCEDURE CODE 1908 (AS REFERRED TO SECTION 282 ITSELF) THE ASSESSING OFFICER COULD NOT HAVE BEEN SAID TO HAVE BEEN VALIDLY VESTED WITH THE JURISDICTION TO MAKE ASSESSMENT IN PURSUANCE THEREOF AND ACCORDINGLY THE ASSESSMENT ORDER DATED 28.12.2006 CAPTIONED AS 'ORDER UNDER SECTION 147 /143 (3) OF THE INCOME - TAX ACT' WAS LIABLE TO BE DECLARED AS VOID - AB - INITIO. : - 3 - : 4 BECAUSE THERE WAS NO VALID SERVICE OF NOTICE UNDER SECTION 143(2), AS ENVISAGED IN SECTION 282 OF THE ACT READ WITH RELEVANT PROVISIONS OF CODE OF CIVIL PROCEDURE 1908 AND ANY INFIRM ITY IN THE MATTER OF SERVICE OF NOTICE STRICTLY IN ACCORDANCE WITH THE PROVISIONS OF STATUTE, IS FATAL TO THE VERY SURVIVAL OF THE ASSESSMENT PROCEEDINGS AND THE AUTHORITY OF THE ASSESSING OFFICER TO MAKE ANY ASSESSMENT IN PURSUANCE OF THE SAME, AS IS EVID ENT FROM THE FOLLOWING; (I) 'SHRI ARUN KUMAR RASTOGI, CHARTERED ACCOUNTANT, WAS HOLDING THE POWER OF ATTORNEY ON BEHALF OF THE APPELLANT TO REPRESENT THE MATTERS BEFORE THE ASSESSING OFFICER' THE TEXT OF THE POWER OF ATTORNEY REVEALED UNEQUIVOCALLY THAT SH RI ARUN KUMAR RASTOGI DID NOT HAVE ANY AUTHORITY TO RECEIVE AND ACCEPT SERVICE OF NOTICE UNDER SECTION 143(2). (II) 'THE PURPOSE OF SERVICE OF NOTICE UNDER SECTION 143(2) IS TO ALLOW AN EFFECTIVE OPPORTUNITY TO THE ASSESSEE' THE CORRECT LEGAL POSITION IS THAT IT IS A JURISDICTIONAL NOTICE AND ANY INFIRMITY IN THE MATTER OF ISSUANCE OF NOTICE AND SERVICE THEREOF IS FATAL TO THE VERY SURVIVAL OF PROCEEDINGS. (III) 'IT IS ALSO IMPORTANT TO NOTE THAT NO OBJECTION OR DISPUTE WAS RAISED BEFORE THE ASSESSING OF FICER REGARDING THE SERVICE OF NOTICE OF SHRI ARUN KUMAR RASTOGI' IT WAS NOT SO REQUIRED TO BE DONE, PARTICULARLY IN THE ASSESSMENT YEAR 2002 - 03, AS THE PROVISION OF SECTION 292BB HAS BEEN HELD TO BE PROSPECTIVE IN ITS EFFECT. (IV) SHRI ARUN KUMAR RASTOGI APPEARED TO REPRESENT THE ASSESSEE AND TO MAKE COMPLIANCE IN RESPONSE TO THE NOTICE' THE PROVISIONS OF SECTION 292BB ARE NOT APPLICABLE AS THE ASSESSMENT YEAR INVOLVED HERE IS 2002 - 03. 5. BECAUSE THE 'CIT(A)' HAS ERRED IN LAW AND ON FACTS IN HOLDING THA T THERE WAS NO INFIRMITY IN THE 'ISSUANCE' AND 'SERVICE' OF MANDATORY NOTICE UNDER SECTION 143(2), AND OBSERVATIONS MADE BY : - 4 - : HIM (IN ARRIVING AT SUCH A CONCLUSION) ARE WHOLLY INCONSISTENT WITH THE FACTS AS ARE AVAILABLE ON RECORD AND LAW APPLICABLE THERETO. 6. BECAUSE THE 'CIT(A)' HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT SOURCE OF A CREDIT ENTRY OF RS.19,897 ( AFTER DEDUCTING THE OUTSTATION COLLECTION CHARGES AMOUNTING TO RS.103) IN THE BANK ACCOUNT OF THE APPELLANT, REMAINED UNEXPLAINED AND IN UPHOLDING THE ADDITION OF RS.20,000 TO THE INCOME OF APPELLANT. 7. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 4 . I HAVE CAREFULLY EXAMINED THE ORDER OF THE LD. CIT(A) ON ALL THE GROUNDS RAISED IN THE APP EAL IN THE LIGHT OF REVENUES CONTENTION AND I FIND THAT THE LD. CIT(A) HAS ADJUDICATED ALL THE ISSUES RAISED BEFORE HIM IN DETAIL. 5 . THROUGH GROUNDS NO.1 TO 5, THE ASSESSEE HAS ASSAILED THE VALIDITY OF THE REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE IN COME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). THIS ISSUE WAS EXAMINED BY THE LD. CIT(A) IN PARA 3 OF HIS ORDER IN THE LIGHT OF THE ASSESSEES CONTENTIONS AND HE FINALLY CONCLUDED THAT THE ASSESSING OFFICER HAD A REASONABLE AND CREDIBLE BASIS TO FORM THE BELIEF REGARDING ESCAPEMENT OF INCOME AND THEREFORE INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE ACT BY HIM IS NOT SEEN TO BE ARBITRARY OR IRRATIONAL. HE HAS ALSO OBSERVED THAT THE ASSESSING OFFICER ACTED ON THE BASIS OF DIRECT AND SUBS TANTIAL EVIDENCE. THEREFORE, ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER IS NOT FOUND TO SUFFER FROM ANY LEGAL INFIRMITY. SINCE NONE HAS APPEARED ON BEHALF OF THE ASSESSEE BEFORE THE TRIBUNAL TO QUESTION THE FINDINGS OF THE LD. CIT(A), I DO NOT F IND ANY INFIRMITY IN THE FINDINGS OF THE LD. CIT(A) WITH REGARD TO : - 5 - : THE VALIDITY OF REOPENING OF ASSESSMENT. ACCORDINGLY I CONFIRM THE ORDER OF THE LD. CIT(A) IN THIS REGARD. 6 . WITH REGARD TO GROUND NO.6 RELATING TO ADDITION OF RS.19,897/ - , IT IS NOTICED THA T A CREDIT ENTRY OF RS.19,897/ - ( AFTER DEDUCTING THE OUTSTATION COLLECTION CHARGES OF RS.103) WAS FOUND IN THE ASSESSEES BANK ACCOUNT NO.9788 WITH SYNDICATE BANK. THE ASSESSEE SOUGHT TO EXPLAIN THIS CREDIT FROM HIS CASH FLOW STATEMENT WHICH WAS NOT ACCEP TED BY THE ASSESSING OFFICER AND ADDITION OF R S.20,000/ - WAS MADE. 7 . BEFORE THE LD. CIT(A), THE ASSESSEE WAS AGAIN FAILED TO EXPLAIN AS TO HOW THE CREDIT ENTRY BY CLEARING IN HIS BANK ACCOUNT COULD ARISE OUT OF HIS CASH IN HAND AND THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.20,000/ - . 8 . SIMILAR IS THE POSITION BEFORE ME AS NONE APPEARED TO EXPLAIN AS TO HOW THE CREDIT ENTRY ON ACCOUNT OF CLEARING OF A CHEQUE CAN BE SHOWN IN THE CASH FLOW STATEMENT. I, THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE LD. CI T(A) ON THIS ISSUE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.1.2013. S D/ - [ S UNIL KUMAR Y ADAV ] JUDICIAL MEMBER DATED: 29.1.2013 JJ: 2801 : - 6 - : COPY FORWARDED TO: 1 . APP ELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR