ITO, New Delhi V. M/s. Meerut Credit & Leasing Pvt. Ltd., New Delhi

ITA 609/DEL/2014

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 5927 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 18-05-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 03-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RASHMITA
• Keywords: Reopening of assessment; Unexplained cash credit
• Section: 147; 148; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO. 609 609 609 609 /DEL/201 /DEL/201 /DEL/201 /DEL/201 4 44 4 A.Y. : 20 A.Y. : 20 A.Y. : 20 A.Y. : 20 03 0303 03 - -- - 04 0404 04 ITO, WARD 6(3), ROOM NO. 304, C.R. BUILDING, NEW DELHI VS. M/S MEERUT CREDIT & LEASING PVT. LTD. C-108, ABC COMPLEX, VEER SARVARKAR BLOCK, SHAKARPUR, DELHI 11 092 (PAN: AAACM6570C) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : MS. RASHMITA, SR. DR ASSESSEE BY : SH. PRAMOD JAIN, CA & SH. MUKUL GUPTA, ADV. DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 2 22 26 66 6.09.2018 .09.2018 .09.2018 .09.2018 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 0 00 03 33 3- -- -1 11 10 00 0- -- -201 201 201 2018 88 8 ORDER ORDER ORDER ORDER PER PER PER PER K. K.K. K. NARASIMHA NARASIMHA NARASIMHA NARASIMHA CHARY, J.M. CHARY, J.M. CHARY, J.M. CHARY, J.M. THIS IS AN APPEAL BY THE REVENUE CHALLENGING THE O RDER DATED 25.11.2013 IN APPEAL NO. 200/10-11 FOR ASSES SMENT YEAR 2003-04 PASSED BY THE LD. COMMISSIONER OF INCOME TA X 2 (APPEALS)-IX, NEW DELHI (IN SHORT LD. CIT(A)), O N THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE LEARNED CIT (APPEALS) IS ERRON EOUS AND CONTRARY TO FACTS AND LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD, CIT(A) ERRED IN HOLDING THAT THERE IS NO EV IDENCE REGARDING SERVICE OF NOTICE U/S 148 DESPITE THE FAC T THAT COPY OF SPEED POST RECEIPT DATED 31.03.2010 WAS AVA ILABLE IN THE ASSESSMENT FOLDER, WHICH WAS EXAMINED BY THE LD. CIT (A) AND A COPY WAS ALSO FORWARDED TO THE CIT(A) VID E LETTER DATED 01.05.2013 OF THE ADDL.CIT RANGE 6, DELHI. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THERE IS NO EV IDENCE REGARDING SERVICE OF NOTICE U/S 148 BY COMPLETELY I GNORING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS YAMU INDUSTRIES LTD [2008] 167 TAXMAN 67 (DE LHI) WHEREIN IT WAS HELD THAT IF THE NOTICE SENT THROUGH REGISTERED POST DID NOT COME BACK UNSERVED THAN THE PRESUMPTIO N IS THAT IT WAS VALIDLY SERVED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE NOTICE U/S 148 WAS SENT TO THE ADDRESS MENTIONED BY THE ASSESS EE ITSELF WHILE APPLYING FOR PAN AND IT WAS THE RESPONSIBILIT Y OF THE ASSESSEE TO GET THE ADDRESS UPDATED IN PAN DATABASE BY APPLYING BEFORE THE DEPARTMENT THROUGH AGENCIES (NS DL/ UTITSL), APPOINTED BY THE DEPARTMENT TO HANDLE PAN APPLICATIONS, ALONGWITH THE PROOF OF THE NEW ADDRES S, AS PER THE REQUIREMENT OF SECTION 139A OF THE INCOME TAX A CT READ WITH RULE 114 OF THE INCOME TAX RULES, WHICH THE AS SESSEE HAD NOT BOTHERED TO DO, THUS THE ASSESSEE CANNOT NO W TAKE THE BENEFIT OF ITS OWN MISTAKE OF NOT UPDATING THE ADDRESS. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDEN CE 3 DESPITE THE FACT THAT NONE OF THE CONDITIONS MENTIO NED IN RULE 46A HAVE BEEN MET. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 68,17,050/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINE D SHARE APPLICATION MONEY FROM AN ENTRY OPERATOR / UNEXPLAINED CREDIT ENTRIES IN BANK ACCOUNT, COMPLET ELY IGNORING THE FINDINGS GIVEN BY THE HONBLE DELHI HI GH COURT IN CASE LIKE CIT V N NOVA PROMOTERS 342 ITR 169, CI T V NR PORTFOLIO [2013]29 TAXMANN.COM 291 (DELHI), CIT V N TARIKA PROPERTIES (ITA NO. 2080/2010 DATED 28.11.2013) ETC WHEREIN THE HONBLE DELHI HIGH COURT HAS CLEARLY HE LD THAT REOPENING OF ASSESSMENT IS JUSTIFIED IN CASE OF INF ORMATION RECEIVED FROM THE INVESTIGATION WING AND THE ONUS I S ON THE ASSESSEE TO ESTABLISH IDENTITY & CREDITWORTHINESS O F CREDITORS AND GENUINENESS OF TRANSACTIONS. 7. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 8. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR TO FORGO ANY GROUNDS OF THE APPEAL EITHER BEFO RE OR AT THE TIME OF THE HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 31.3.2014 FOR THE ASSESSMENT YEAR 2003-04 DECLARING NIL INCOME AND IT WAS PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 22.3.2010 FOR REASSESSMENT AND SINCE THERE WAS NO RESPONSE FR OM THE ASSESSEE, AO COMPLETED THE ASSESSMENT U/S. 144 OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 8.12.2010 MAKING AN ADDITION OF RS. 68,17,050/-. 4 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT( A) CONTENDING THAT THE ASSUMPTION OF JURISDICTION BY THE AO U/S. 147 OF THE ACT WAS WITHOUT SERVING THE NOTICE U/S. 148 OF THE ACT IS BAD IN LAW. FURTHER ASSESSEE CONTENDED THAT THE ADDITI ON MADE BY THE AO ON IMAGINARY GROUNDS AND THE SHARE APPLICATION M ONEY OF RS. 6817050/- WAS RECEIVED THROUGH PROPER BANKING CHANN ELS; THE IDENTITY OF THE SHARE APPLICANTS WAS PROVED BEYOND REASONABLE DOUBT. LD. CIT(A) CONSIDERED THE CASE AT LENGTH A ND RECORDED THAT THERE IS NO EVIDENCE REGARDING THE SERVICE OF NOTIC E IN AS MUCH AS THE AO DID NOT ISSUE THE NOTICE U/S. 148 OF THE ACT AT THE LATEST ADDRESS OF THE ASSESSEE GIVEN IN THE RETURN OF INCO ME AND WHILE FOLLOWING THE PRECEDENCE, LD. CIT(A) HELD THAT THE ASSUMPTION OF JURISDICTION BY THE AO TO REOPEN THE ASSESSMENT WA S BAD IN LAW. ON MERITS ALSO LD. CIT(A) GRANTED RELIEF TO THE ASS ESSEE BY DELETING THE ADDITION OF RS. 68,17,050/-. REVENUE IS, THERE FORE, BEFORE US IN THIS APPEAL. 4. IT IS THE ARGUMENT OF THE LD. DR THAT AS IS EVID ENT BY THE COPY OF THE NOTICE DATED 22.3.2010 WHICH THE RECEIPT DAT ED 31.3.2010, THERE IS PROPER SERVICE OF NOTICE ON THE ASSESSE E AT ITS MAUJPUR, YAMUNA VIHAR, DELHI ADDRESS. AS STATED, THERE IS SUFFICIENT COMPLIANCE OF LAW, BUT THE LD. CIT(A) IGNORED THE S AME. PER CONTRA, THE AR BROUGHT TO OUR NOTICE THE REMAND REPORT OF T HE LD. AO AT PAGE NO. 40-41 OF THE PAPER BOOK WHEREIN IT WAS STA TED THAT THE NOTICE WAS SENT TO THE ADDRESS OF 304, MAYUR VIHAR, PHASE-2, DELHI 5 ADDRESS, SINCE THE ASSESSEE ITSELF ADMITTED SUCH AD DRESS. ON THIS HE SUBMITTED IN THE REMAND REPORT, THE AO ADMITTED TO HAVE SENT THE NOTICE TO MAYUR VIHAR ADDRESS AS SUCH IT CANNOT BE STATED THAT NOTICE WAS SENT TO MAUJPUR, YAMUNA VIHAR ADDRESS. HE FURTHER INVITED OUR ATTENTION TO PAGE NO. 22-31 OF THE PAPE R BOOK WHICH CONTAINS THE ITR ACKNOWLEDGEMENT FOR AY 2002-03 TO 2012-13 WHEREIN THE ADDRESS OF THE ASSESSEE IS CLEARLY SHOW N AS MAUJPUR, YAMUNA VIHAR. 5. WE HAVE CAREFULLY GONE THROUGH THE RECORD ON THI S ASPECT AS IS SUBMITTED BY THE AR AND HAS OBSERVED BY THE LD. CIT(A), IT SEEMS THAT TWO NOTICE U/S. 148 OF THE ACT WERE PREPARED F OR TWO ADDRESS NAMELY 304-C, MAYUR VIHAR, PHASE-2, DELHI AND A-31/ 131, MATA MANDIR, GALI NO. 5, MAUJPUR, YAMUNA VIHAR, DELHI. THE ITR ACKNOWLEDGEMENT CLEARLY SHOWS THAT RIGHT FROM THE A SSESSMENT YEAR 2002-03 THE AO CLEARLY MENTIONED THAT NOTICE U/S. 1 48 OF THE ACT WAS ISSUED TO THE ADDRESS AT MAYUR VIHAR, PHASE-2, DELHI ONLY. IT IS, THEREFORE, CLEAR THAT THOUGH THE DR PRODUCED THE CO PY OF THE NOTICE THAT WAS ADDRESSED TO THE ASSESSEE AT MAUJPUR, YAMU NA VIHAR, DELHI, ACTUALLY, THE NOTICE WAS SENT TO SUCH ADDRES S, BUT IT WAS SENT TO MAYUR VIHAR, PHASE-2 DELHI ADDRESS ONLY, WHICH I S NOT THE PROPER AND CORRECT ADDRESS OF THE ASSESSEE. 6. IN SUCH A CASE, WE ARE UNABLE TO UNDERSTAND HOW THE OBSERVATION OF THE LD. CIT(A) IS WRONG THAT THE NOT ICE WAS NOT SENT TO LATEST ADDRESS OF THE ASSESSEE GIVEN IN THE RET URN OF INCOME AND 6 CONSEQUENTLY, THERE IS NO PROPER SERVICE OF NOTICE U/S. 148 OF THE ACT IN THIS CASE. LD. CIT(A) FOLLOWED THE BINDING PREC EDENTS WHILE REACHING THE CONCLUSION THAT THERE IS NO VALID NOTI CE OF SERVICE IN THIS CASE. WE, THEREFORE, FIND THAT THE DECISIONS OF HO NBLE DELHI HIGH COURT IN THE CASE OF CIT VS. LUNAR DIAMONDS LTD. 281 ITR 1, CIT VS. HOTLINE INTERNATIONAL PVT. LTD., CIT (CENTRAL)-1 VS . CHETAN GUPTA ITA NO. 1891/DEL/2012 DATED 15.9.2015, AND CIT VS. ESHA AN HOLDING P. LTD. (2012) 344 ITR 541 (DEL.) ARE APPLICABLE T O THE FACTS OF THE CASE FOR THE PRINCIPLE THAT BEFORE ISSUE THE NOTICE U/S. 148 OF THE ACT, IT IS EXPECTED OF THE AO TO HAVE CHECKED UP IF THERE IS ANY CHANGE OF ADDRESS BECAUSE VALID SERVICE OF NOTICE OF REOPENING THE ASSESSMENT IS A JURISDICTIONAL MATTER AND THIS IS A CONDITION PRECEDENT FOR A VALID REASSESSMENT. FURTHER, THOUGH THE CORRECT ADDRESS OF THE ASSESSEE HAS BEEN CONSTANTLY MENTION ED IN THE RETURN OF INCOME QUITE FOR A LONG TIME. HOWEVER, NOTICE WA S NOT SENT TO SUCH ADDRESS, AS A RESULT OF WHICH REASSESSMENT PRO CEEDINGS AND NOTICE U/S. 148 READ WITH SECTION 147 IS ILLEGAL, B AD IN LAW AND WITHOUT JURISDICTION. 7. ON A CAREFUL CONSIDERATION OF THE MATTER IN LIGH T OF THE DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT AS RELIED UPON BY THE AR, WE ARE OF THE CONSIDERED OPINION THAT THE F INDING OF THE LD. CIT(A) VIDE PARAGRAPH NO. 4.2.4 TO 4.8 DID NOT SUFF ER ANY ILLEGALITY OR IRREGULARITY AND THEY ARE FIRMLY ENTRENCHED INTO THE FACTS AND RECORD AS SUCH WHILE RESPECTFULLY FOLLOWING THE RAT IO OF THE DECISIONS 7 OF THE JURISDICTIONAL HIGH COURT, WE HOLD THAT THE ASSUMPTION OF JURISDICTION U/S. 147 BY THE AO IS WITHOUT PROPER S ERVICE OF NOTICE AND NOTICE U/S. 148 OF THE ACT IS BAD IN LAW AND RE ASSESSMENT PROCEEDINGS ARE CONSEQUENTLY LIABLE TO BE QUASHED. WE ACCORDINGLY, QUASH THE SAME AND CONFIRM THE FINDING OF THE LD. CIT(A). SINCE WE HAVE QUASHED THE REASSESSMENT PROC EEDINGS ON THE LEGAL GROUND, WE ARE NOT ADJUDICATING THE ISSUE S ON THE MERITS OF THE CASE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/10/2018. S SS SD DD D/ // /- -- - S SS SD DD D/ // /- -- - [ [[ [G.D. AGRAWAL] G.D. AGRAWAL] G.D. AGRAWAL] G.D. AGRAWAL] [ [[ [K. K.K. K. NARASIMHA NARASIMHA NARASIMHA NARASIMHA CHARY] CHARY] CHARY] CHARY] PRESIDENT PRESIDENT PRESIDENT PRESIDENT JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 03/10/2018 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY COPY COPY COPY FORWARDED TO: FORWARDED TO: FORWARDED TO: FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY 8 BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES