Sudhir Kumar, Meerut V. ITO WARD - 2(5), Meerut

ITA 5436/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9643 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 17-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Assessment record; Reassessment proceedings
• Section: 147; 148; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI C.M. GARG, JUDICIAL MEMBER ITA No.5436/Del/2019 Assessment Year: 2010-11 Sudhir Kumar, C/o S.K. Monga, Advocae, 312-313, Govindpuri, Hardwar (UK). PAN: ASIPK1168R Vs. ITO, Ward-2(5), Meerut. (Appellant) (Respondent) Assessee by : None Revenue by : Shri Anuj Garg, Sr. DR Date of Hearing : 27.09.2022 Date of Pronouncement : 29.09.2022 ORDER This appeal filed by the assessee is directed against the order dated 06.05.2019 of the CIT(A), Meerut, relating to Assessment Year 2010-11. 2. When the case was called for hearing, neither the assessee nor his authorized representative appeared nor any adjournment application has been filed. From the perusal of the appeal records, I also note that the notice issued to the assessee has been returned by the Postal Authorities with a remark ‘lene se inkar.’ Therefore, I safely presume that the notice has been served on the ITA No.5436/Del/2019 2 assessee and I have no alternative, but, proceeding with the adjudication of the appeal ex parte qua the assessee, after hearing the argument of the ld. Sr. DR. 3. Grounds No.1 and 7 of the assessee are of general in nature. First of all, I take ground No.2 of the assessee for adjudication which reads as follows:- “2. That neither notice u/s 148 issued nor served upon the assessee because the order sheet for issuing the notice has not been signed. The order sheet haws not been signed on recording the reasons, meaning thereby, the order sheet before 27.03.2017 upto 07.07.2017 has not been signed. Hence, all the proceedings upto 07.07.2017 are invalid. In this connection, I rely on the case of Shri Pinnamaraju Venkatapathi Raju vs. JCIT (ITAT Vishakapatnam) vide ITA No.132/Vizag/2016” 4. In this ground, it has been contended on behalf of the assessee that neither the notice u/s 148 of the Income-Tax Act, 1961 (for short, ‘the Act’) was issued or served upon the assessee because the order sheet for issuing the notice has not been signed. It has also been contended therein that the order sheet has not been signed on the date of recording of reasons meaning thereby that the order sheets before 27.03.2017 dated 07.07.2017 has not been signed. Reliance has been placed on the order of the ITAT in the case of Shri Pinnamaraju Venkatapathi Raju vs. JCIT (supra). 5. Replying to the above, the ld. Sr. DR strongly supported the validity of the assessment proceedings as well as assessment order dated 20.07.2017 passed u/s 143(3)/147 of the Act. However, in all fairness, the ld. Sr. DR submitted relevant ITA No.5436/Del/2019 3 assessment record and copies of the order sheet from 27.03.2017 to 07.07.2017 and informed the Bench that the ITO has not signed these order sheets which includes recording of reasons and issuance of notice u/s 148 & 142(1) of the Act along with the questionnaire. 6. In the identical facts and circumstances, ITAT, Vishakhapatanam in the case of Shri Pinnamaraju Venkatapathi Raju vs. JCIT (supra) held as follows:- “5. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. In this case, the A.O. has reopened the assessment by issue of notice u/s 148 of the Act. During the reassessment proceedings, the assessee has replied to the notice issued u/s 148 of the Act and requested for supply of the reasons recorded for the issue of notice u/s 148 of the Act. However, the A.O. has not supplied the reasons. As per the Hon'ble Supreme Court decision in the case of GKN Driveshafts (India) Limited Vs. ITO and Others cited (supra), once the notice u/s 148 of the Act is issued, the proper course of action is to file the return and if the assessee so desires to seek the reasons for issue of notice and the A.O. is bound to furnish the reasons within a reasonable time. On receipt of the reasons, the assessee is entitled to file objections to issuance of notice and the A.O. is bound to dispose of the same by passing speaking order. The assessing officer has not followed the above law laid down by the Hon'ble Supreme Court. Non-furnishing of reasons to the assessee is fatal to the reassessment made u/s 147 of the Act. Further, as per the provisions of Income Tax Act, before issuing the notice u/s 148 of the Act, the A.O. is bound to record the reasons for issue of such notice. For ready reference, we reproduce hereunder section 148 of the Act: "Section 148 [Issue of notice where income has escaped assessment. 148 [(1)] Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment ITA No.5436/Del/2019 4 year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: [GKN Driveshafts (India) Limited Vs. ITO and Others that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and e3nding on 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub=- section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case— (a) where a return has been furnished during the period commencing on 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.] [Explanation -- For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section. [(2) The Assessing Officer shall, before issuing any notice under this section record his reasons for doing so.]" ITA No.5436/Del/2019 5 6. In the instant case, on verification of the assessment record, it is noticed that the A.O. typed the reasons but not signed the order sheet, thus there are no reasons recorded for reopening of assessment as required u/s 148 of the Act. The A.O. neither complied with the statutory requirement of recording the reasons for issue of notice nor complied with the law laid down by the Hon'ble Supreme Court in the case of reassessment proceedings. Therefore, the notice issued u/s 148 is bad in law accordingly same is quashed and the consequent assessment order made u/s 147 r.w.s. 143 (3) is annulled and the appeal of the assessee is allowed.” 7. In the present case also, on verification of the assessment record including the order sheets from the date of recording of reasons dated 27.03.2017 to 07.07.2017 clearly reveals that the order sheets by the AO from recording of reasons, issuing of notice u/s 148 of the Act and notices u/s 142(1) dated 25.05.2017 and dated 07.07.2017 are handwritten and there is no signature of the AO thereon. Thus, I safely hold that the AO neither complied with the statutory requirements and issuing notice u/s 148 of the Act nor complied with the law laid down by the Hon’ble Supreme Court in the case of reassessment proceedings. Consequently, I am compelled to hold that the AO did not have valid jurisdiction to initiate reassessment proceedings and to issue notice u/s 148 of the Act to the assessee. Therefore, notice issued u/s 148 of the Act, reassessment proceedings and the impugned reassessment order are bad in law. Accordingly, the same are quashed and the consequent reassessment order made u/s 147 r.w. section 143(3) of the Act is annulled and the appeal of the assessee is allowed on ground No.2. ITA No.5436/Del/2019 6 8. Since, by the earlier part of this order, I have quashed the notice u/s 148 of the Act and have also annulled the impugned reassessment order, therefore, the other grounds of the assessee are not being adjudicated upon. 9. In the result, the appeal filed by the assessee is allowed. The decision was pronounced in the open court on 29.09.2022. Sd/- (C.M. GARG) JUDICIAL MEMBER Dated: 29 th September, 2022. dk Copy forwarded to 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi