Madan Gopal Gupta, New Delhi V. ACIT, Circle-58(1), New Delhi

ITA 5928/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2836 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 18-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K TIWARI
• Keywords: Opportunity of being heard; Principle of natural justice; Period of limitation; Question of law; Accommodation entries; Time period of passing order; Condonation of delay; Reassessment proceedings
• Section: 143(3); 142(1); 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 5928/DEL/2017 A.Y. : 2008-09 MADAN GOPAL GUPTA, E-49/204, 2 ND FLOOR, LAXMI NAGAR, NEW DELHI 110 092 (PAN: AHUPG5049A) VS. ACIT, CIRCLE 58(1), VIKAS BHAWAN, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ANIL JAIN, CA DEPARTMENT BY : SH. V.K. TIWARI, SR. DR ORDER ASSESSEE HAS FILED THIS APPEAL AGAINST THE IMPUGNE D ORDER DATED 02.6.2017 PASSED BY THE LD. CIT(A)-19, NEW DELHI RE LEVANT TO ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD. CIT(A) HAS FAILED TO APPRE CIATE THAT INITIATION OF REASSESSMENT PROCEEDING AND NOTICE U/ S. 147 R.W.S. 148 IS ILLEGAL, BAD IN LAW, WITHOUT JURISDIC TION AND TIME BARRED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW THE LD. CIT(A) HAS FAILED TO APPR ECIATE THAT IMPUGNED ORDER PASSED U/S. 147/143(3) OF THE I.T. 2 ACT, IS ILLEGAL, BAD IN LAW, WITHOUT JURISDICTION A ND CONTRARY TO THE FACTS. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD. CIT(A) HAS FAILED TO APPRE CIATE THAT ASSESSMENT ORDER PASSED BY THE AO IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND HAS BEEN PASSED W ITHOUT REASONABLE OPPORTUNITY OF BEING HEARD. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF THE LAW, THE LD. CIT(A) HAS ERRED IN SUSTAINING AN ADDITION OF RS. 3,44,418/- AS COMMISS ION INCOME BY WAY OF APPLYING RATE OF 1.25% ON THE GROS S AMOUNT OF ALLEGED ACCOMMODATION ENTRIES. 5. THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO ITSE LF THE RIGHT TO ADD, ALTER AMEND, VARY, MODIFY AND / OR W ITHDRAW AND GROUND(S) OF APPEAL AT OR BEFORE THE TIME OF H EARING. 2. IN THIS CASE THERE IS A DELAY OF 20 DAYS IN FILI NG THE APPEAL BEFORE THE TRIBUNAL. IN THIS REGARD, THE ASSESSEE HAS FILE D AN APPLICATION DATED 14.9.2017 REQUESTING FOR CONDONATION OF DELAY IN F ILING THE APPEAL. AFTER PERUSING THE AFORESAID APPLICATION DATED 14.9.2017, I AM OF THE CONSIDERED VIEW THAT THERE WAS NO DELIBERATE DELAY ON THE PART OF THE ASSESSEE AND ASSESSEE HAS SUFFICIENT REASONS FOR CA USING THE DELAY IN FILING THE APPEAL, HENCE, THE DELAY OF 20 DAYS IS C ONDONED. 3 3. THE BRIEF FACTS OF THE CASE ARE THAT BASED ON T HE EVIDENCES GATHERED DURING SURVEY AND ASSESSMENT PROCEEDINGS F OR AY 2009-10 AND NOTICE U/S. 148 OF THE I.T. ACT, 1961 WAS ISSUED ON 4.9.2014. NO RESPONSE WAS RECEIVED. NOTICE U/S. 142(1) OF THE AC T WAS ISSUED ON 19.10.2015. NO RESPONSE WAS RECEIVED. NOTICE U/S. 1 42(1) WAS ISSUED ON 19.10.2015. IN RESPSNOE TO THE NOTICE A LETTER WAS RECEIVED IN DAK ON 26.1.2015 REQUESTING FOR PROCEEDINGS UNDER WHICH TH E NOTICE HAD BEEN ISSUED. VIDE LETTER DATED 29.10.2015 THE INFORMATIO N REGARDING PROCEEDINGS U/S. 147 OF THE ACT WAS PROVIDED ALONGW ITH COPY OF NOTICE U/S. 148 OF THE ACT AND REQUESTED FOR REASONS FOR R EOPENING OF THE CASE. THE ASSESSMENT IN THIS CASE WAS MADE AT TOTAL INCO ME OF RS. 9,86,010/- AGAINST THE RETURNED INCOME OF RS. 4,34,943/-. A SU RVEY UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFER RED AS THE ACT) WAS CONDUCTED AT THE PREMISES E-30/106, 1 ST FLOOR, JAWAHAR PARK, LAXMI NAGAR, DELHI. THE OWNER OF THAT PARTICULAR PREMISE SH. MADAN GOPAL GUPTA, ADMITTED THAT HE WAS ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. THE MATERIAL FOUND DURING TH E COURSE OF SURVEY SHOWED THAT THERE WERE SEVERAL FIRMS WHICH WERE PRO VIDING ACCOMMODATION ENTRIES TO DIFFERENT PERSONS. THE LIS T OF PERSONS AND FIRMS ARE PROVIDED IN ANNEXURE TO THE ASSESSMENT ORDER. T REATING THE ASSESSEE TO BE AN ENTRY PROVIDER, A RATE OF 2% ON THE GROSS AMOUNT OF ACCOMMODATION ENTRIES WAS APPLIED. THE ADDITION WAS MADE TO THE TUNE OF RS. 5,51,069/-. 4 4. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 23.3.2 016, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 02.6.2017 HAS PARTLY ALLOWED THE APPEAL. 5. AGAINST THE IMPUGNED ORDER DATED 02.6.2017, ASS ESSEE HAS FILED THE APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE DREW MY ATTENTION TOWARDS PAGE NO.1-4 OF THE PAPER BOOK WHI CH ARE THE COPY OF NOTICE UNDER SETION 142(1) OF THE ACT AY 2008-09 DA TED 19.10.2015 ISSUED BY THE AO; COPY OF REPLY OF NOTICE U/S. 142( 1) OF THE ACT AY 2008- 09 VIDE LETTER DATED 27.10.2015; COPY OF LETTER ISS UED BY THE ACIT DATED 29.10.2015 AND COPY OF REPLY FILED VIDE LETTER DATE D 4.11.2015 ALONGWITH THE COPY OF THE ITR AND COMPUTATION OF INCOME AY 20 08-09 AND STATED THAT NO NOTICE U/S. 148 OF THE ACT HAS BEEN RECEIVE D BY THE ASSESSEE, BECAUSE THE ADDRESS MENTIONED ON THE NOTICES IS WR ONG, HOWEVER, THE RIGHT ADDRESS OF THE ASSESSEE WAS MENTIONED IN THE INCOME TAX RETURN FOR AY 2008-09 AND NO ATTEMPT WAS MADE TO SERVE THE ASSESSEE AT THE CORRECT ADDRESS. HENCE, THE REASSESSMENT PROCEEDING S AND NOTICE U/S. 147 R.W.S. 148 IS ILLEGAL, BAD IN LAW, WITHOUT JURI SDICTION AND TIME BARRED. IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE DE CISIONS OF THE HONBLE HIGH COURT IN THE CASE OF CIT VS. LUNAR DIAMONDS L TD. 281 ITR 1 & CIT ITA NO. 62 OF 2015 VS MASCOMPTEL INDIA LTD. 345 IT R 58 348 ITR 58 ITA NO. 1 OF 2012. 5 7. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS AVAILABLE WITH ME ESPECIALLY THE ORDERS OF THE REVENUE AUTHOR ITIES. AFTER PERUSING THE RECORDS, I FIND CONSIDERABLE COGENCY IN THE ASS ESSEES COUNSEL CONTENTION THAT THE NOTICE U/S. 148 OF THE ACT WAS NOT RECEIVED BY THE ASSESSEE BUT ONLY NOTICE AND THE SAME WAS SENT ON T HE WRONG ADDRESS AND NO ATTEMPT WAS MADE TO SERVE THE ASSESSEE AT TH E CORRECT ADDRESS. HOWEVER, THE CORRECT ADDRESS WAS MENTIONED IN THE I NCOME TAX RETURN, WHICH WAS NOT MENTIONED WHILE SENDING THE NOTICE U/ S. 148 OF THE ACT, AS A RESULT THEREOF, THE REASSESSMENT PROCEEDINGS AND NOTICE U/S. 147 R.W.S. 148 IS ILLEGAL, BAD IN LAW, WITHOUT JURISDICTION AN D TIME BARRED, HENCE, I QUASH THE REASSESSMENT PROCEEDINGS BY RESPECTFULLY FOLLOWING THE BELOW MENTIONED CASE LAWS:- - CIT VS. LUNAR DIAMONDS LTD. 281 ITR 1 & WHEREIN THE HONBLE DELHI HIGH COURT HAS OBSERVED THE FOLLOWING : 16. WE MAY ALSO POINT OUT THAT THERE APPEARS TO BE SOME DOUBT WHETHER THE NOTICE WAS AT ALL SENT TO THE ASSESSEE BECAUSE, AS OBSERVED BY THE CIT(A), THE RECEIPT SHOWING THAT AN ENVELOPE WAS SENT BY REGISTERED POST MERELY CONTAINED THE 6 NAME OF THE ASSESSEE WITHOUT ITS ADDRESS. CONSEQUENTLY, IT IS QUITE POSSIBLE THAT THE NOTICE MAY HAVE BEEN SENT TO THE ASSESSEE AT SOME WRONG OR EVEN SOME INCOMPLETE ADDRESS. HOWEVER, IT IS NOT NECESSARY FOR US TO GO INTO THIS QUESTION AT ALL BECAUSE THE ASSESSEE HAD FILED AN AFFIDAVIT STATING THAT AN AFFIDAVIT STATING THAT IT HAD NOT RECEIVED THE NOTICE AND THE TRIBUNAL RIGHTLY HELD THAT UNDER THESE CIRCUMSTANCES, THE BURDEN WAS UPON THE APPELLANT TO PROVE THAT NOTICE WAS SERVED UPON THE ASSESSEE WITHIN THE PRESCRIBED TIME. THE APPELLANT HAD FAILED TO PROVE ITS CASE IN THIS REGARD. 17. WE ARE OF THE VIEW THAT THE APPEAL DOES NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW WHICH REQUIRES OUR DECISION. 18. DISMISSED. - CIT ITA NO. 62 OF 2015 VS MASCOMPTEL INDIA LTD. 345 ITR 58 348 ITR 58 ITA NO. 1 OF 2012 WHEREIN THE HONBLE DELHI HIGH COURT HAS OBSERVED THE FOLLOWING : 7 IN THE PRESENT CASE, THE AO HAD ISSUED A NOTICE UNDER SECTION 143(2) DATED OCTOBER 11, 2007, TO THE RESPONDENT- ASSESSEE. THE SAID NOTICE WAS ADDRESSED AT 44, REJENDRA BHAWAN, RAJENDRA PLACE, NEW DELHI. THE NOTICE COULD NOT BE SERVED AND WAS RECEIVED BACK WITH THE REMARK OF THE POSTAL AUTHORITY THAT NO SUCH PERSON EXISTS AT THE ADDRESS MENTIONED. AN INSPECTOR WAS DEPUTED TO SERVE THE NOTICE PERSONALLY BUT HE ALSO REPORTED THAT THE COMPANY WAS NOT AVAILABLE AT THE ADDRESS. THE AO, THEREAFTER, SERVED THE NOTICE BY AFFIXTURE. DATE OF NOTICE OF THE AFFIXTURE, IS, HOWEVER, NOT STATED IN THE ASSESSMENT ORDER. THE ASSESSMENT WAS MADE EX PARTE /BEST JUDGMENT ASSESSMENT ORDER WAS PASSED. THE CIT(A) AND THE TRIBUNAL HAVE HELD THAT THE AFRORESAID SERVICE BY THE AFFIXTURE WAS NOT VALID. THE FINDINGS OF THE CIT(A) AND THE TRIBUNAL ARE THAT THE ASSESSEE HAD MENTIONED A DIFFERENT ADDRESS IN THE RETURN OF INCOME TAX FILED FOR THE ASSESSMENT YEAR IN QUESTION. IN THE RETURN OF INCOME TAX THE 8 ADDRESS MENTIONED WAS 1-GF, AGCR ENCLAVE, KARKARDOOMA, DELHI. THEY HAVE HELD THAT THE ASSESSEE WAS EARLIER FUNCTIONING FROM 44, RAJENDRA BHAWAN, RAJENDRA PLACE, NEW DELHI, AND HAD SHIFTED FROM THE SAID ADDRESS IN 2001. IT HAS ALSO COME ON RECORD THAT THE TDS OFFICER (WHO WAS ALSO THE AO) HAD ISSUED NOTICE DATED OCTOBER, 1, 2007, AT I-GF, AGCR ENCLAVE, KARKARDOOMA, DELHI. THE SAID ADDRESS WAS ALSO MENTIONED IN THE BALANCE SHEET, PROFIT AND LOSS ACCOUNT, TAX AUDIT REPORT AS WELL AS THE ASSESSMENT ORDER UNDER SECTION 143(3) DATED FEBRUARY, 30, 2007, FOR THE ASSESSMENT YEAR 2005-06, I.E., THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. THE AFORESAID FACTS SPEAKS FOR THEMSELVES. NO ATTEMPT WAS MADE TO SERVE THE RESPONDENT-ASSESSEE AT THE CORRECT ADDRESS WHICH WAS AVAILABLE WITH THE DEPARTMENT AND IN FACT STATED IN THE RETURN OF THE INCOME FOR THE ASSESSMENT YEAR 2006-07. SUBSEQUENT ATTEMPT TO SERVE ANOTHER NOTICE UNDER SECTION 143(2) AT 1-GF, AGCR 9 ENCLAVE, KARKARDOOMA, DELHI, IN NOVEMBER, 2008, LONG AFTER THE EXPIRY OF THE LIMITATION PERIOD PRESCRIBED BY THE PROVISO, CANNOT HELP THE REVENUE. THE APPEAL IS DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 21/03/2018. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 21/03/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT ASSISTANT REGISTRAR, ITAT, DELHI BENCHES