ABHISHEK ACHARYA, MUMBAI V. ITO WARD 16(1)(1) ERSTWHILE JURISDICTION OF ACIT, CIRCLE 11(1), MUMBAI

ITA 5960/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3795 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2002-2003
• Appeal Filed On: 16-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Keywords: Invalid notice; Assessment record; Condonation of delay; TDS
• Section: 143(3); 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.5960/M/2018 ASSESSMENT YEAR: 2002-03 SHRI ABHISHEK ACHARYA, A/13, KRISHNA KUNJ, 552, KHAR PALI ROAD TPS- 3, 8 TH ROAD, KHAR WEST, MUMBAI 400 052 PAN: ACYPA 2833R VS. ITO, WARD 16(1)(1), [ERSTWHILE JURISDICTION OF ACIT, CIRCLE 11(1)], MUMBAI (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI JITENDRA SANGHAVI, A.R. SHRI AMIT KHATIWALA, A.R. REVENUE BY : SHRI R. BHOOPATHI, D.R. DATE OF HEARING : 16.09.2019 DATE OF PRONOUNCEMENT : 31.10.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 21.08.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2002-03. 2. THE ONLY ISSUE RAISED IN GROUND NO.2 & 3 IS AGAI NST THE NON SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT O N THE ASSESSEE AND CHALLENGING THE JURISDICTION OF THE AO TO FRAME ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THE ASSESSEE HAS CHALLENGED THE ORDER OF LD. CIT(A) FOR NOT QUASHING THE ASSESS MENT ORDER PASSED UNDER SECTION 143(3) ON THE GROUND THAT THER E HAS BEEN NO SERVICE OF NOTICE UNDER SECTION 143(2) OF THE AC T. ITA NO.5960/M/2018 SHRI ABHISHEK ACHARYA 2 3. THE FACTS IN BRIEF ARE THAT THE NOTICE UNDER SEC TION 143(2) OF THE ACT WAS ISSUED AND SENT ON THE ADDRESS 710, EVE REST, J.P. ROAD, ANDHERI (WEST), MUMBAI ON 29.10.2003. HOWEVE R, THE SAID NOTICE WAS RETURNED UNSERVED. THE ASSESSEE, I N THE RETURN OF INCOME FILED, HAS STATED THE ADDRESS AS E-202, S ERENITY OF NEW LINK ROAD, OSHIWARA, ANDHERI (WEST), MUMBAI 400 053 AND THUS THE NOTICE HAS BEEN SENT ON THE WRONG ADDRESS . THEREAFTER, NO ATTEMPT WAS MADE BY THE AO TO SEND T HE NOTICE ON THE CORRECT ADDRESS AND FINALLY THE ASSESSMENT U NDER SECTION 143(3) OF THE ACT WAS FRAMED VIDE ORDER DATED 31.03 .2005. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DID NOT ADJUDICATE THIS GROUND OF APPEAL AND DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE ON ACCOUNT OF NON CONDONATION OF DELAY IN FILING THE APPEAL. THE LEARNED CIT(A) HAS DISMISSED THE APPEAL OF THE APPELLATE BY CONCLUDING THAT DUE TO PURELY CALL OUS AND NEGLIGENT ATTITUDE OF THE APPELLANT THERE IS INEXPL ICABLE AND INORDINATE DELAY OF MORE THAN 12 AND A HALF YEARS I N FILING THE APPEAL AND THEREFORE IT IS NOT A FIT CASE TO CONDON E THE DELAY. 5. AT THE OUTSET, THE LD. A.R. SUBMITTED BEFORE THE BENCH THAT THE ASSESSMENT HAS BEEN FRAMED BY THE AO WITHOUT SE RVING THE MANDATORY NOTICE UNDER SECTION 143(2) OF THE ACT ON THE ASSESSEE DESPITE THE FACT THAT THE RETURN AS FILED WAS WITH THE CORRECT ADDRESS WHEREAS THE NOTICE WAS SENT ON A WR ONG ADDRESS. THE LD. A.R. STATED THAT IN RESPONSE TO RTI INFORMA TION SOUGHT BY THE ASSESSEE, THE AO HAS RESPONDED THAT THE NOTI CE UNDER SECTION 143(2) WAS SENT ON THE ADDRESS AT 710, EVER EST, J.P. ROAD, VERSOVA, ANDHERI (WEST), MUMBAI WHEREAS THE C ORRECT WAS ITA NO.5960/M/2018 SHRI ABHISHEK ACHARYA 3 E-202,, SERENITY , OFF NEW LIND ROAD, OSHIWARA , AN DHERI (WEST), MUMBAI. THE LD AO HAS TAKEN THIS ADDRESS FROM FORM 16A, A TDS CERTIFICATE ISSUED TO THE ASSESSEE BY THIRD PAR TY. THUS THE LD. A.R. SUBMITTED THAT THIS IS UNDISPUTED THAT NOT ICE HAS NOT BEEN SERVED ON THE ASSESSEE. DURING THE COURSE OF PROCEEDINGS BEFORE THE TRIBUNAL, THE AR DREW OUR ATTENTION TO T HE RTL REPLY RECEIVED BY THE APPELLANT FROM THE ASSESSING OFFICE R WHICH IS EXTRACTED IS AS UNDER: - SR.NO INFORMATION REQUIRED REPLY 8(II) WAS THE ASSESSMENT ORDER U/S. 143(3) DATED 31.3.2005 DISPATCHED AT THE ADDRESS MENTIONED AT SR.NO.7? IF YES, WHETHER THE SAME IS DELIVERED OR RETURNED UNSERVED? IF SERVED, PROVIDE COPY OF THE ACKNOWLEDGMENT OF SERVICE. YES, THE ASSESSMENT ORDER WAS DESPATCHED AT THE ADDRESS MENTIONED AT SR.NO.7 AND IT WAS RETUNED UNSERVED. THE LD AR SUBMITTED THAT IT IS VERY CLEAR FROM THE ASSESSING OFFICER'S RESPONSE TO THE QUERY RAISED ABOUT THE AD DRESS AT WHICH THE ASSESSMENT ORDER WAS DISPATCHED WHEREIN H E HAS ACKNOWLEDGED THAT THE ASSESSMENT ORDER WAS DISPATCH ED TO THE ADDRESS WHICH WAS NOT THE APPELLANT'S ADDRESS AND ALSO THAT ADDRESS WAS NOT MENTIONED ON THE PHYSICAL RETURN OF INCOME FILED BY THE APPELLANT FOR THE RELEVANT ASSESSMENT YEAR. IN FACT, IT WAS ACCEPTED BY THE ASSESSING OFFICER THAT THE ASS ESSMENT ORDER WAS DISPATCHED TO THE ADDRESS MENTIONED IN FO RM 16A ISSUED BY M/S. MUDRA COMMUNICATIONS LTD. DATED 10.7 .2001. ITA NO.5960/M/2018 SHRI ABHISHEK ACHARYA 4 THE ASSESSING OFFICER HAS FURTHER CONFIRMED THAT TH E ASSESSMENT ORDER WAS RETURNED UNSERVED. IT CAN ALSO BE SEEN FR OM THE PAPER BOOK FILED BY THE ASSESSEE BEFORE THE TRIBUNAL THAT THE APPELLANT HAS FILED 9 LETTERS BEFORE THE ASSESSING OFFICER FR OM THE PERIOD 17.4.2006 TO 22.10.2018 WITH RESPECT TO OUTSTANDING DEMAND RAISED FOR THE CURRENT ASSESSMENT YEAR EXPRESSLY PO INTING OUT THAT THE APPELLANT HAS NOT RECEIVED ANY ASSESSMENT ORDER FOR THE RELEVANT YEAR. THE LD AR OBJECTED TO THE OBSERVATIO N OF THE LD CIT(A) IN PARA 5 OF HIS ORDER THAT THE APPELLANT HA S MENTIONED DATE OF SERVICE OF ORDER / NOTICE OF DEMAND IN FORM NO.35 AS 11.10.2017 WHICH WAS INCORRECT. THE LD COUNSEL ALSO CONTROVERTED THE OBSERVATIONS OF THE LD CIT(A) T HAT THE APPELLANT HAS OBTAINED TRUE COPY OF THE NOTICE OF D EMAND AND TRUE COPY OF ASSESSMENT ORDER ETC. WHICH WAS SIGNED BY THE ASSESSING OFFICER ON 29.9.2017 AND THAT THE APPELL ANT HAS TRIED TO PRESENT A PICTURE AS IF THE APPEAL HAS BEEN FILE D WITHIN DUE TIME BY MENTIONING THE DATE OF SERVICE OF ORDER / N OTICE OF DEMAND AS 11.10.2017 AND THE DATE OF FILING OF THE APPEAL BEING 9.11.2017 AND THEREFORE IN TIME. THE LD AR ALSO REF ERRED TO THE CIT(A) HARSH REMARKS THAT THE APPELLANT HAS ONLY T RIED TO HOODWINK THE APPELLATE PROCEDURE WITHOUT ANY VALID REASONS. THE LD AR SUBMITTED THAT THE TRUE COPY OF THE ASSE SSMENT ORDER WAS CERTIFIED ON 29.9.2017 AND WAS DISPATCHED ON 9 .10.2017 AND SERVED TO THE APPELLANT ON 12.10.2017 AS IS CLE AR FROM THE RTI REPLY GIVEN BY THE AO WHICH IS EXTRACTED AS U NDER: SR.NO INFORMATION REQUIRED REPLY 9 ON WHICH DATE THE TRUE COPY OF THE ASSESSMENT ORDER CERTIFIED BY ITO 09.10.2017. SERVED ON YOU ON 12.10.2017. (COPY OF POSTAL ITA NO.5960/M/2018 SHRI ABHISHEK ACHARYA 5 WARD 16(1)(1) ON 29.9.2017 WAS DESPATCHED? ON WHICH DATE THE SAME WAS SERVED ON ME? KINDLY PROVIDE PROOF OF THE DELIVERY. ACKNOWLEDGEMENT ENCLOSED) THE LD. AR CONTENDED THAT IT IS VERY CLEAR THAT ALL THE RELEVANT DETAILS WERE AVAILABLE IN THE FILE OF ASSE SSING OFFICER WITH RESPECT TO THE MATTER ON HAND AND THE CIT(A), INSTEAD OF CALLING FOR THE RECORDS FROM ASSESSING OFFICER TO V ERIFY THE FACTS OF THE CASE AND THE CLAIM OF THE APPELLANT, HAS CHOSE N TO MAKE UNDUE HARSH COMMENTS ON THE ATTITUDE OF THE APPELLA NT AND ALSO TO ALLEGE THAT THE APPELLANT HAS TRIED TO HOODWINK THE APPELLATE PROCEDURE WITHOUT ANY VALID REASONS. SUCH OBSERVATI ONS AND COMMENTS BY THE CIT(A) IN HIS ORDER WERE TOTALLY UN WARRANTED AND UNCALLED FOR. THE LD AR ARGUED THAT IT QUITE A PPARENT FROM THE ASSESSMENT RECORDS AS BROUGHT TO FORTH BY THE RTI QUERIES RAISED BY THE APPELLANT THAT THE ORIGINAL ASSESSME NT ORDER U/S.143(3) DATED 31.3.2005 WAS NOT SERVED ON THE AP PELLANT AND THE SAME WAS DISPATCHED TO A WRONG ADDRESS. FURTHER , THE TRUE COPY OF THE ASSESSMENT ORDER CERTIFIED BY THE ITO, WARD 16(1)(1) ON 29.9.2017 WAS DISPATCHED ON 9.10.2017 AND RECEIV ED BY THE APPELLANT FIRST TIME ON 12.10.2017. THE APPELLANT F ILED AN APPEAL AGAINST THE SAID ORDER BEFORE THE C!T{A) ON 9.11.20 17 WHICH IS WITHIN THE TIME LIMIT PRESCRIBED FOR FILING THE APP EAL. THE CIT(A) HAS THEREFORE WRONGLY DISMISSED THE APPEAL OF THE A PPELLANT BY HOLDING THE SAME AS FILED INEXPLICABLY AND INORDINA TELY DELAYED. COMING TO THE CORE ISSUE IN THE APPEAL, THE LD AR S TATED THAT THE APPELLANT HAS CHALLENGED THE LEGALITY OF THE ASSES SMENT ON THE GROUND THAT THE NOTICE ISSUED U/S. 143(2) OF THE ACT WAS NOT ITA NO.5960/M/2018 SHRI ABHISHEK ACHARYA 6 SERVED ON THE APPELLANT AS IT DISPATCHED AT WRONG A DDRESS. THE ASSESSING OFFICER IN HIS REPLY TO RTI QUERY HAS CON FIRMED THE NON-SERVICE OF NOTICE. FINALLY THE LD AR PRAYED BEF ORE THE BENCH THAT THE ASSESSMENT ORDER BEING NULLITY MAY KINDLY BE QUASHED AS THE NON SERVICE OF NOTICE GOES TO THE ROOTS O F THE ASSESSMENT AND IS NOT A CURABLE DEFECT AT ALL. IN DEFENCE OF HIS ARGUMENTS, THE LD. A.R. RELIED ON A SERIES OF DECISIONS NAMELY ; 1. ACIT V GENO PHARMACEUTICALS LTD. (BOMBAY HIGH COURT) 32 TAXMANN.COM 162 2. CIT V ABACUS DISTRIBUTION SYSTEMS (INDIA) (P.) LTD. (BOMBAY HIGH COURT) 78 TAXMANN.COM 321 3. HARJEET SURAJPRAKASH GIROTRA V UNION OF INDIA & ORS. WRIT PETITION NO.51 3 OF 201 9 4. SHRI PRAKASH RAMJI GAVALI V ITO {MUMBAI TRIBUNAL) ITANO.1492/MUM/2012 5. SURESH KUMAR SHEETLANI V ITO (ALLAHABAD HIGH COURT) 96 TAXMANN.COM 401 6. VEENA DEVI KARNANI V ITO (DELHI HIGH COURT) 102 TAXMANN.COM 470 7. ACIT V HOTEL BLUE MOON (SC) 188TAXMAN 113 8. SHRI RAMESH SALECHA HUF V ITO (MUMBAI TRIBUNAL) ITANO.3312/MUM/2015 9. CIT VS LAXMAN DAS KHANDELWAL (2019) 108 TAXMANN.COM 183(SC) 6. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE O RDER OF AUTHORITIES BELOW BY SUBMITTING THAT NOTICE HAS PRO PERLY BEEN ISSUED BUT SENT ON AN ADDRESS WHICH WAS DIFFERENT T HAN THE ADDRESS MENTIONED ON THE INCOME TAX RETURN. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE UNDISPUTED FACTS ARE TH AT THE NOTICE UNDER SECTION 143(2) WAS NOT SERVED ON THE ASSESSEE AS IS APPARENT FROM THE REPLY OF THE AO IN RESPONSE TO TH E RTI APPLICATION DATED 05.10.2018, WE OBSERVE FROM THE P ERUSAL OF THE SAID APPLICATION THAT THE NOTICE HAS NOT BEEN S ERVED ON THE ITA NO.5960/M/2018 SHRI ABHISHEK ACHARYA 7 ASSESSEE. IN OUR OPINION, THE NON SERVICE OF NOTIC E IS FACTUAL AND SEROUS DEFECTS IN THE FRAMING OF THE ASSESSMENT AND RENDERS THE ASSESSMENT PROCEEDINGS AS WELL AS THE CONSEQUENT AS SESSMENT ORDER AS NULL AND VOID. THE LD CIT(A) INSTEAD OF F INDING THE TRUTH CHOSE TO DISMISS THE APPEAL EVEN WITHOUT VERIFYING THE FACTS FROM ASSESSMENT RECORDS. IN THE PRESENT CASE BEFORE US T HE AO ADMITTED TO HAVE NOT SERVED THE NOTICE UNDER SECTIO N 143(2) ON THE ASSESSEE AND IN SUCH A SCENARIO WE ARE LEFT WIT H NO OPTION EXCEPT TO QUASH THE ASSESSMENT ORDER. THE CASE OF T HE ASSESSEE IS SUPPORTED BY A SERIES OF DECISIONS AS STATED HER EINABOVE. IN THE CASE OF CIT VS. ABACUS DISTRIBUTION SYSTEMS (IN DIA) (P.) LTD. (SUPRA) THE HONBLE BOMBAY HIGH COURT HAS HELD THAT WHERE THE NOTICE UNDER SECTION 143(2) HAS NOT BEEN SERVED AT THE CORRECT ADDRESS THEN THE ASSESSMENT PROCEEDINGS CONCLUDED O N THE BASIS OF INVALID NOTICE IS VOID. SIMILARLY, IN THE CASE OF CIT VS. LAXMAN DAS KHANDELWAL (2019) 108 TAXMANN.COM 183 (S C) THE HONBLE APEX COURT HAS HELD THAT NO NOTICE UNDER SE CTION 143(2) WAS EVER ISSUED BY THE DEPARTMENT, THEREFORE, IN TH E LIGHT OF JUDGEMENT REFERRED TO ABOVE THE ASSESSMENT PROCEEDI NGS SANS SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT A RE INVALID AND ACCORDINGLY QUASHED. 8. BEFORE PARTING WE WOULD LIKE TO MAKE MENTION OF THE RECENT JUDGEMENT OF THE HONBLE APEX COURT PCIT VS M/S I-VEN INTERACTIVE LTD CIVIL APPEAL NO. 8132 OF 2019(ARISI NG OUT OF SLP (C) NO.3530/2019 ORDER DATED 18.10.2019,WHEREIN IT WAS HELD THAT WHERE MERE MENTIONING THE NEW ADDRESS IN THE RETURN OF INCOME WITHOUT SPECIFICALLY INTIMATING THE ASSESSIN G OFFICER QUA CHANGE OF ADDRESS AND WITHOUT GETTING THE PAN DATAB ASE CHANGED, IS NOT ENOUGH AND SUFFICIENT. THE HON'BLE APEX COURT ITA NO.5960/M/2018 SHRI ABHISHEK ACHARYA 8 HAS HELD THAT IN ABSENCE OF ANY SPECIFIC INTIMATION TO THE ASSESSING OFFICER QUA CHANGE OF ADDRESS OR CHANGE O F NAME OF THE ASSESSEE, THE AO IS JUSTIFIED IN SENDING THE NOTICE UNDER SECTION 143(2) AT THE AVAILABLE ADDRESS MENTIONED IN THE PA N DATABASE OF THE ASSESSEE, ESPECIALLY WHEN THE RETURN HAS BEE N FILED UNDER E-MODULE SCHEME. THE SAID DECISION WAS RENDERED IN THE CONTEXT OF MATTER THAT SELECTION OF THE CASE GENERA TED UNDER AUTOMATED SYSTEM OF THE DEPARTMENT WHICH PICKS UP A DDRESS OF THE ASSESSEE FROM THE DATABASE OF THE PAN AND THE C HANGE OF ADDRESS IN THE PAN DATABASE IS THEREFORE MUST. THE SAID DECISION OF THE HONBLE APEX COURT IS NOT APPLICABL E TO THE PRESENT FACTS, AS IN THE INSTANT CASE THERE WAS NO PAN DATA BASE AND THERE WAS NO E-FILING AT THAT TIME AND SCRUTINY USED TO BE FIXED MANUALLY AND NOT ON AUTOMATED SYSTEM AND THUS THE NOTICE UNDER SECTION 143(2) USED TO BE ISSUED ON TH E BASIS OF THE RECORDS BEFORE THE AO. 9. SINCE THE APPEAL OF THE ASSESSEE IS ALLOWED ON T HIS LEGAL ISSUE, OTHER GROUNDS RAISED BY THE ASSESSEE NEED NO T TO BE ADJUDICATED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.2019. SD/- SD/- (VIKAS AWASTHY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 31.10.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT ITA NO.5960/M/2018 SHRI ABHISHEK ACHARYA 9 THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.