Ms. Rachna Gupta, New Delhi V. ITO, New Delhi

ITA 5527/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2658 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 28-05-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 01-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: G S KOHLI
• Keywords: Accommodation entries; Assessment record
• Section: 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.5527/DEL/2012 ASSESSMENT YEAR: 2003-04 RACHNA GUPTA, FLAT NO. 124, PLOT NO. 33, PRINCESS PARK APARTMENT, SECTOR-6, DWARKA, NEW DELHI. PAN NO. AAHPG8657Q VS. ITO, WARD 27(4), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. G.S. KOHLI, CA RESPONDENT BY: SH. BHIM SINGH, SR. DR O R D E R PER S.V. MEHROTRA, A.M. THIS APPEAL, FILED BY THE ASSESSEE, IS DIRECTED A GAINST THE ORDER DATED 18/09/2012 OF CIT(A)-XXIV, NEW DELHI FOR A.Y. 2003-04. 2. BRIEF FACTS OF THE CASE ARE THAT ON THE BASIS OF INFORMATION AVAILABLE WITH THE ASSESSING OFFICER REGARDING ACCOMMODATION ENTRIES BEING TAKEN BY ASSESSEE, HE ISSUED NOTICE U/S 148 ON 30.03.2010, A FTER OBTAINING PRIOR APPROVAL OF ADDL. CIT, RANGE-27, NEW DELHI REQUIRIN G THE ASSESSEE TO FILE RETURN OF INCOME FOR A.Y. 2003-04. HOWEVER, ASSESS EE FAILED TO MAKE ANY COMPLIANCE TO THIS NOTICE AND NO RETURN WAS FILED. THEREAFTER, THE AO HAD ISSUED NOTICES U/S 142(1) ON 09.06.2010, 06.08.2010 AND 14.09.2010. AT ITA NO. 5527/DEL/2012- RACHNA GUPTA 2 THIS JUNCTURE IT IS PERTINENT TO POINT OUT THAT ASS ESSES CLAIM IS THAT IT HAD RECEIVED FIRST NOTICE ON 14.09.2010. THE ASSESSEE FILED A LETTER DATED 22 ND SEPTEMBER, 2010 ENCLOSING THE ACKNOWLEDGEMENT OF SA RAL FORM AND FURTHER STATED THAT THE ASSESSEE WAS NOT HOLDING THE RELEVA NT RECORD FOR THIS ASSESSMENT YEAR AND ALSO STATED THAT INITIATION OF THE PROCEEDINGS AFTER LAPSE OF SIX YEARS WERE UNJUSTIFIED. 3. THE ASSESSING OFFICER HAS OBSERVED AS UNDER: THE ASSESSEE HAS NOT CITED ANY REASON THAT HOW IT IS NOT JUSTIFIED AS PER THE ACT. REPLY IN THIS REGARD WAS SENT TO THE ASSESSEE ON 22/24.11.2010 EXPLAINED THE LEGAL POSITION REGARDING SERVICE OF THE NOTICE AND OBJECT ION RAISED BY THE ASSESSEE WERE HELD INCORRECT AND ASSE SSEE WAS FURTHER GRANTED AN ANOTHER OPPORTUNITY TO APPEA R ON 30.11.2010. ON 30.11.2010 COUNSEL OF THE ASSESSEE APPEARED AND FILED LETTER DATED 30.11.2010 AND REQU ESTED FOR LINKUP THE ORIGINAL RETURN FOR COMPLETION OF TH E ASSESSMENT OR MERITS WHILE RAISING HIS OBJECTION FO R INITIATION OF PROCEEDINGS AND SERVICE OF THE NOTICE WAS AGAIN EMPHASIZED. TO MAKE FURTHER COMPLIANCE HE REQUESTED FOR AN ADJOURNMENT FOR 06.12.2010. HOWEV ER, NONE APPEARED ON 6.12.2010 AND AGAIN A LETTER DATED 14/15.12.2010 WAS SENT TO THE ASSESSEE EXPLAINING T HE LEGAL POSITION AND DISTINCTION BETWEEN SERVICE AND ISSUE OF NOTICE CONCERNING THE REQUIREMENT U/S 148 OF THE ACT. THE RELEVANT PORTION OF THE LETTER IS REPRODUCED HEREUNDER: ITA NO. 5527/DEL/2012- RACHNA GUPTA 3 IN THIS REGARD, THE CONTENT OF YOUR LETTER ARE CON SIDERED AND ACCORDINGLY YOU ARE INFORMED THAT AS PER THE PROVISIONS OF SEC. 148 AND 149 OF THE I.T. ACT THE LEGAL REQUIREMENT IS TO ISSUE THE NOTICE WITHIN THE PRESC RIBED PERIOD AND SERVICE OF NOTICE UNDER THE ACT IS NOT A CONDITION PRECEDENT. THE NOTICE U/S 148 WAS ISSUED TO YOU ON 30.3.2010 WHICH WAS WITHIN THE PRESCRIBED PE RIOD OF LIMITATION AND IT HAS BEEN HELD BY THE HONBLE S UPREME COURT IN THE CASE OF R.K. UPADHAYA VS. SHANA BHAI P . PATEL (1987) 166 ITR 163 (SC) . 3.1 THE AO FINALLY MADE AN ADDITION OF RS. 6,15,000 /-, INTER-ALIA, OBSERVING THAT ASSESSEE HAD NO EXPLANATION TO OFFER . 4. BEFORE LD. CIT(A) THE ASSESSEE HAD ASSAILED THE INITIATION OF PROCEEDINGS UNDER SECTION 148 AND THE CONSEQUENT FR AMING OF THE ASSESSMENT ORDER. IT WAS SUBMITTED THAT SHE RECEIV ED THE FIRST NOTICE DATED 14 TH SEPTEMBER, 2010 WHICH SHE REPLIED BY FILING THE WR ITTEN SUBMISSIONS THROUGH LETTER DATED 22 ND SEPTEMBER, 2010. THE AO, HOWEVER, INFORMED THE ASSESSEE THAT NOTICE U/S 148 WAS ISSUED ON 30 TH MARCH, 2010 WHICH WAS WELL WITHIN THE PERIOD OF SIX YEARS AS STIPULAT ED BY LAW. 4.1 AFTER CONSIDERING THE ASSESSEES SUBMISSIONS, L D. CIT(A) OBSERVED IN PARA 4.2 AS UNDER: 4.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AS WELL AS THE ARGUMENTS GIVEN BY THE AO IN THE ASSESSMENT ORDER. DURING THE APPELLATE ITA NO. 5527/DEL/2012- RACHNA GUPTA 4 PROCEEDINGS, THE ASSESSMENT RECORDS OF THE APPELLAN T WERE CALLED FOR AND WERE PERUSED IN THE PRESENCE OF THE LD. AR OF THE APPELLANT CA, SH. G.S. KOHLI. IT WAS POINTED OUT TO THE LD. AR THAT THE ASSESSING OFFICE R HAD RECORDED HIS REASONS FOR REOPENING THE ASSESSMENT U /S 147 AND ISSUE OF NOTICE U/S 1`48. HE HAD TAKEN THE APPROVAL OF THE APPROPRIATE AUTHORITY AND HAS THERE AFTER ISSUED THE NOTICE U/S 148 DT. 30.03.2010 TO THE APP ELLANT AT HER ADDRESS BE-63, HARI NAGAR, NEW DELHI 110 0 64. THE NOTICE WAS DISPATCHED THROUGH SPEED POST VIDE ED9608709361N DT. 30.03.2010. THE LD. AR WAS INFORMED THAT THE ADDRESS OF THE APPELLANT WAS TAKE N FROM PAN DETAILS. IN RESPONSE, THE APPELLANT GAVE A WRI TTEN SUBMISSION THROUGH THE LD. AR DT. 18.07.2012, WHERE IN HE ACCEPTED THAT THE APPELLANT MIGHT HAVE APPLIED PAN NUMBER GIVING THE ADDRESS OF HER EMPLOYER M/S S.R. FOILS LTD., BE-63, HARI NAGAR, NEW DELHI 110 064. HOWEVER, THIS COMPANY LEFT THE PREMISES W.E.F. 26.04.2004 AND INTIMATED THE REGISTRAR OF COMPANIES ABOUT THE CHANGE OF ADDRESS BY FILING THE PRESCRIBE D FORM NO. 18. IT IS EVIDENT FROM THE LETTER OF THE LD. AR THAT HE HAS NOT DOUBTED THE VERACITY OF THE ADDRESS AS MENTIONED ON NOTICE U/S 148 ISSUED BY THE AO. HE H AS MERELY MENTIONED THAT THERE WAS A CHANGE OF ADDRESS OF THE COMPANY AND THAT THE RETURN OF INCOME HAD BEEN FILED BY THE APPELLANT FROM A DIFFERENT ADDRESS I.E . BK- 22, SHALIMAR BAGH, DELHI 110 062. THUS, IT IS CL EAR THAT NOTICE U/S 148 WAS ISSUED BY THE AO ON 30.03.2 010, I.E. WITHIN THE STIPULATED TIME FRAME PRESCRIBED BY LAW ITA NO. 5527/DEL/2012- RACHNA GUPTA 5 AND IT HAD BEEN CORRECTLY ADDRESSED TO THE APPELLAN T AS PER THE ADDRESS GIVEN BY HER IN PAN DETAILS. THE N OTICE WAS DULY DISPATCHED THROUGH SPEED POST. AFTER CAREFUL CONSIDERATION OF ALL THE FACTS, I AM OF THE OPINION THAT THERE IS NO INFIRMITY IN THE ISSUE OF NOTICE AND IT S SERVICE AND THAT THE ARGUMENT TAKEN BY THE APPELLANT IS DEV OID OF ALL MERIT. MY OPINION GATHERS STRENGTH FROM THE FA CT THAT THERE ARE LETTERS ON RECORD, WRITTEN BY THE LD. AR OF THE APPELLANT DT. 30.11.2010, 21.12.2010 AND 24.12.2010 WHICH CLEARLY INDICATE THAT THE APPELLANT WAS WELL AWARE OF THE FACT THAT HER CASE FOR AY 2003-04 HAD BEEN REOPENED U/S 147 OF THE ACT AND NOTICE U/S 148 HAD BEEN ISSUED TO HER ON 30.03.2010. THIS FACT HAD ALSO BE EN SPECIFICALLY BROUGHT TO THE NOTICE OF THE APPELLANT BY THE AO DT. 15.12.2010 AND 27.12.2010. RELIANCE IS PLAC ED ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF I.M. CONSTRUCTIONS PVT. LTD. VS. CIT IN WP (CIVIL) NO. 8068/2011 DELIVERED ON 27.03.2012 (2012 - TIOL-270-HC-DEL-IT), WHEREIN THE HONBLE COURT HAS HELD THAT THE REQUIREMENTS STIPULATED IN SEC. 149 IS ISSUE OF NOTICE AND NOT SERVICE OF NOTICE, WHIC H WAS THE REQUIREMENT U/S 34 OF THE INCOME TAX ACT, 1922. THE ASSESSMENT PROCEEDINGS ARE STILL PENDING AND HA VE NOT CULMINATED IN PASSING OF ANY ORDER. IN THE MEANWHILE, THE PETITIONER HAS COME TO KNOW ABOUT TH E SAID ASSESSMENT PROCEEDINGS. THE ASSESSEE CAN BE TREATED AS SERVED WITH THE NOTICE U/S 148, WHICH WAS EARLIER ISSUED AT THE ADDRESS MENTIONED IN THE RETU RN. THE ASSESSEE CAN NOW FILE A RETURN OF INCOME PURSUA NT ITA NO. 5527/DEL/2012- RACHNA GUPTA 6 TO THE SAID NOTICE AND THE ASSESSMENT PROCEEDINGS C AN CONTINUE. IN THE INSTANT CASE, THE FACT ARE ALMOST SIMILAR. NOTICE U/S 148 WAS ISSUED WITHIN TIME. THE APPELLANT WAS WELL AWARE THAT THE CASE WAS REOPENED AND THE NOTICE U/S 148 HAD BEEN ISSUED. THE SAID NOTICE WAS ISSUED AT THE ADDRESS OF THE APPELLANT MENTIONED IN PAN SINCE, TH E ORIGINAL RETURN FOR AY 2003-04 WAS NOT TRACEABLE. THE ADDRESS IN PAN WAS CORRECTLY MENTIONED IN THE SAID NOTICE. THIS WAS NOT DENIED BY THE APPELLANT. THU S, TECHNICALLY, THE APPELLANT CAN BE TREATED AS SERVE D WITH THE NOTICE U/S 148 SINCE, T HE PROCEEDINGS OF ASSESSMENT WERE STILL PENDING. UNDER THESE CIRCUMSTANCES, I HOLD THAT THE REOPENING OF ASSESSM ENT WAS VALID AND THE NOTICE U/S 148 WAS VALIDLY SERVED ON THE APPELLANT. THE TECHNICAL OBJECTION TAKEN BY TH E LD. AR IS THEREFORE, REJECTED AND DISMISSED. THEREFORE, HE REJECTED THE ASSESSEES CONTENTIONS. 5. LD. COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 1 OF ASSESSMENT ORDER TO DEMONSTRATE THAT FIRST NOTICE RECEIVED BY ASSESS EE WAS DATED 14 TH SEPTEMBER, 2010 FOR 22 ND SEPTEMBER, 2010. HE POINTED OUT THAT THE NOTICES DATED 9 TH JUNE, 2010 AND 6 TH AUGUST, 2010 WERE NOT RECEIVED BY ASSESSEE AND, THEREFORE, NO COMPLIANCE WAS MADE. H E REFERRED TO PARA 4.2 OF LD. CIT(A)S ORDER, REPRODUCED EARLIER, AND POINTED OUT THAT NOTICE U/S 148 DATED 30 TH MARCH, 2010 WAS ISSUED AT BE-63, HARI NAGAR, NEW D ELHI 110 064 AT THE ADDRESS GIVEN IN THE PAN CARD. HE S UBMITTED THAT THE ITA NO. 5527/DEL/2012- RACHNA GUPTA 7 ADDRESS IN PAN CARD WAS HER EMPLOYER M/S S.R. FOILS LTD. HE FURTHER POINTED OUT THAT THIS COMPANY LEFT THE PREMISES W.E .F. 26 TH APRIL, 2004 AND INTIMATED THE REGISTRAR OF THE COMPANIES ABOUT THE CHANGE OF ADDRESS BY FILING THE PRESCRIBED FORM NO. 18. 5.1 LD. COUNSEL FURTHER REFERRED TO THE COPY OF RET URN FILED BY THE ASSESSEE IN FORM NO. 2D (SARAL) FOR A.Y. 2003-04 CO NTAINED AT PAGE 6 OF PAPER BOOK. IN THIS RETURN ADDRESS GIVEN WAS BK-22 , SHALIMAR BAGH, DELHI. HE REFERRED TO PAGE 2 OF THE REPLY FILED TO NOTICE DT. 14 TH SEPTEMBER, 2010 U/S 142(1) TO POINT OUT THAT THE RETURN WAS FILED O N 19 TH SEPTEMBER, 2003 I.E. MUCH PRIOR TO THE DATE OF ISSUE OF NOTICE U/S 148. HE FURTHER REFERRED TO THE ACKNOWLEDGEMENT OF RETURNS FOR ASSESSMENT YEARS 200 4-05 AND 2005-06 TO DEMONSTRATE THAT THE ADDRESS OF SHALIMAR BAGH WAS G IVEN IN THE RETURNS AND, THUS, WAS AVAILABLE WITH THE DEPARTMENT MUCH B EFORE THE ISSUANCE OF NOTICE U/S 148. 5.2 LD. COUNSEL SUBMITTED THAT CIT(A) HAD ASKED FOR THE RECORD FROM WHERE IT WAS FOUND THAT NOTICE DATED 30 TH MARCH, 2010 U/S 148 WAS ISSUED AT THE ADDRESS BE-63, HARI NAGAR, NEW DELHI AFTER T AKING FROM WEBSITE THE DETAILS OF PAN AND THE DWARKAS ADDRESS WAS FOUND B Y OBTAINING THE CANARA BANK STATEMENT IN SEPTEMBER, 2010. LD. COUN SEL FURTHER REFERRED TO COPY OF RETURN FOR A.Y. 2010-11 FILED ON 24 TH JANUARY, 2011 AND A.Y. 2011-12 FILED ON 29 TH SEPTEMBER, 2011, WHEREIN THE ADDRESS OF ASSESSEE ITA NO. 5527/DEL/2012- RACHNA GUPTA 8 WAS GIVEN AS FLAT NO. 124, PLOT NO. 33, PRINCESS PA RK APARTMENT. LD. COUNSEL FURTHER REFERRED TO PAGE 9 OF PAPER BOOK, W HEREIN THE COPY OF FORM NO. 18 IS CONTAINED TO DEMONSTRATE THAT W.E.F. 26 TH APRIL, 2004 THE OFFICE OF S.R. FOILS LTD. HAD CHANGED FROM BE-63, HARI NAGAR, NEW DELHI TO 2 ND FLOOR, VARDHANA PLAZA, J BLOCK, COMMUNITY CENTRE, R AJOURI GARDEN, NEW DELHI. HE, THEREFORE, SUBMITTED THAT AO HAD ISSUED NOTICE AT WRONG ADDRESS. LD. COUNSEL RELIED ON THE DECISION OF HON BLE DELHI HIGH COURT IN CIT VS. ESHAAN HOLDING (P) LTD., [2012] 344 ITR 541 (DEL.). 5.3 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. IT IS NOT DISPUTED BY THE DEPARTMENT THAT NOTICE DATED 30 TH MARCH, 2010 U/S 148 WAS ISSUED AT BE-63, HARI NAGA R, NEW DELHI ADDRESS. FROM THE COPY OF RETURNS FILED FOR ASSESSMENT YEARS 2003-04, 2004-05 AND 2005-06 PRIOR TO 30 TH MARCH, 2010, IT IS EVIDENT THAT THE ADDRESS OF ASESSEE WAS BK-22, SHALIMAR BAGH, DE LHI 110 052 WHICH WAS AVAILABLE WITH THE DEPARTMENT AND, THEREFORE, A DMITTEDLY THE NOTICE WAS ISSUED AT WRONG ADDRESS. SIX YEAR PERIOD FROM THE END OF THE ASSESSMENT YEAR EXPIRED ON 31 ST MARCH, 2010. THEREFORE, IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ESHAAN HOLDING PVT. LTD., IT CANNOT BE SAID THAT VALID NOTICE WAS ISSUE D U/S 148 TO ASSESSEE. IN THIS CASE IT HAS BEEN HELD AS UNDER: THE FIRST NOTICE ISSUED ON JANUARY 29, 2004, BY S PEED- POST WAS SAID TO HAVE BEEN SERVED AT THE OLD ADDRES S AT ITA NO. 5527/DEL/2012- RACHNA GUPTA 9 EAST OF KAILASH. THERE WAS NO PROOF OF SERVICE ON RECORD. EVEN OTHERWISE, THIS WAS NOT VALID SERVICE BECAUSE THE ASSESSEE HAD ALREADY FILED ITS RETURN O N NOVEMBER 28, 2003, AND IN THIS RETURN THE ADDRESS S HOWN WAS PANCHSHEEL PARK. THUS, THE RECORD OF THE DEPARTMENT ALREADY CONTAINED THE NEW ADDRESS OF THE ASSESSEE. BEFORE ISSUING NOTICE U/S 148, IT WAS EX PECTED OF THE ASSESSING OFFICER TO HAVE CHECKED UP IF THER E WAS ANY CHANGE OF ADDRESS, BECAUSE VALID SERVICE OF A N OTICE OF REOPENING THE ASSESSMENT IS A JURISDICTIONAL MAT TER AND THIS IS A CONDITION PRECEDENT FOR A VALID REASSESSMENT. 5.4 RESPECTFULLY, FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT, WE SET ASIDE THE ORDER OF LD. CIT(A) HOLDING THAT INIT IATION OF PROCEEDINGS U/S 148 WAS NOT LEGAL AND, THEREFORE, CONSEQUENT ASSESS MENT ORDER FRAMED BY AO IS QUASHED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/07/2013 SD/- SD/- (R.P. TOLANI) JUDICIAL MEMBER (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 05/07/2013 *KAVITA ITA NO. 5527/DEL/2012- RACHNA GUPTA 10 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR