Ashish Sharma, Amritsar V. Income Tax Officer Ward 5(1), Amritsar

ITA 63/ASR/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2544 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-04-2024
• Assessment Year: 2010-2011
• Appeal Filed On: 13-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVINDER PAL SINGH
• Keywords: Salary income; Opportunity of cross examination; Assessment record
• Section: 147; 148; 144; 143(3); 142(1); 250; 292BB; 143(2); 139(1); 113; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DAS GUPTA, JUDICIAL MEMBER I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 Ashish Sharma House No. 201, Kamla Avenue, PGC Road, Amritsar. [PAN: BLLPS2943D] (Appellant) Vs. ITO, Ward 5(1), Amritsar. (Respondent) Appellant by Sh. Rohit Kapoor, CA. & Sh. V.S. Aggarwal, ITP Respondent by Sh. Davinder Pal Singh, Sr. DR Date of Hearing 16.04.2024 Date of Pronouncement 03.05.2024 ORDER Per: Udayan Das Gupta, JM: The instant appeal is directed against the order of the CIT (A) NFAC passed u/s 250 of the Income Tax Act 61, dated 30/10/2023, for the Assessment year 2010-11, which has arisen out of the order of the AO dated 27/09/2017 passed u/s 143/147 of the Act, for A.Y. 2010-11. I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 2 2. It is seen that the appeal is time barred by 47 days. The assessee has filed an application for condonation of delay, along with an affidavit executed by Mr. Amit Goenka, Advocate, stating that sudden medical problems in his family, prevented him from attending to his client’s appeal and it prevented him from handing over the requisite appeal papers to his senior counsel, who eventually prepared and filed this appeal, belated by 47 days. The delay being unintentional, the assessee prays for condonation of the delay and prays for taking up the appeal on merits. Therefore, considering the grounds contained in the condonation application and the affidavit of the Advocate, the delay of 47 days is condoned and appeal is admitted to be heard on merits. 3. The assessee has taken the following grounds: 1. On the facts and circumstances of the case, the Ld. CIT(A) vide order u/s 250(6) dated 30.10.2023 has erred in confirming the addition to the tune of Rs. 2111480/- made by the learned AO on account of cash deposited in bank account. 2. That the order passed u/s 250(6) of the Income Tax Act, is bad in law as the same has been disposed off without examining the merits of the case and ignoring the evidences on record that the bank account was misused by Balwinder Singh, ex- employee of Axis Bank. 3. That the CIT(A) has erred in confirming the addition of Rs. 2111480/- on account of cash deposited in bank account I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 3 without giving the opportunity of cross examination of the bank manager Sh. Sukhwinder Singh (Dy. Manager, Axis Bank). 4. The Ld. CIT(A) had ignored the facts that the vouchers in respect of debit entries were not confronted to the assessee by the AO in spite of specific request made during assessment proceedings. That the CIT(A) has failed to appreciate that the assessee has specifically denied the signatures in respect of only 1 debit entry of Rs. 457000 dated 14.12.2009 on the basis of which the addition made by the AO and confirmed by the CIT(A). 5. That the CIT(A) has erred in not appreciating that the transactions in the bank account were denied by the assessee and had ignored the multiple complaints field to various agencies against the bank employee. That the CIT(A) has erred in not analysing the outcome of agencies to whom the complaints were filed at the time of assessment proceedings. 6. That the CIT(A) has erred in confirming the addition made by the AO without carrying out further investigation [u/s section 250(4)] and without adjudicating on merits. 7. That the assessment framed u/s 147 is bad in law as the jurisdictional notice u/s 143(2) was not issued by the AO. 8. That the assessment framed u/s 147 is bad in law as the assessment u/s 147 was completed by the non-jurisdictional AO, Amritsar. I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 4 9. That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off.”. 4. Brief facts of the case is that, cash has been deposited in the Axis Bank A/c No: 90902004044235, (opened in the name of the assessee, Mr Ashis Sharma), on various dates throughout the F.Y. 2009-10, amounting to Rs.21,11,480/- (as per details contained in page – 4 of the assessment order). I. No return of Income has been filed by the assessee u/s 139(1) of the Act 61, in normal course. II. Assessment proceedings was reopened by the AO, vide issue of a notice u/s 148 of the Act 61, dated 30/03/2017, after obtaining necessary approval from appropriate authorities. III. In response to notice u/s 148 dated 30/03/2017, the assessee submitted his return on 29/07/2017, disclosing total income from salary and insurance commission, at Rs. 1,89,231/-. IV. In course of assessment proceedings the assessee Mr. Ashis Sharma, personally appeared and made representations and furnished documents , in support of his return . I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 5 5. The assessment was finally completed by the AO on a total Income of Rs. 23,00,710/- on 27.09.2017. 1) The matter was carried in first appeal before the CIT (A) NFAC, and in course of the appellate proceedings , before the first appellate authority, it is seen that the appellant has not filed any submission before the CIT ( A ) on merits , on the grounds contained in the memorandum of appeal , but has filed a response on 12/09/2019, asking for the appeal to be adjourned , because the appellant would like to examine the assessment records, and thereafter, shall file the written submissions to the appeal. (Application for examination of case records has already been filed before the AO on 09 th April,2019 and the opportunity of examination is not yet granted). 2) The appeal hearing was refixed before the CIT (A) on 13 th June, 2023, where the assessee has requested for further adjournment because examination of case records has not been allowed by the AO, and without the inspection of case records (assessment records) it is not possible to file submission in appeal. (Application for inspection of file, assessment records and copy of order sheet has been filed for the second time, before the AO on 24 th April, 2023, along with coping fees challan of Rs.200/-, I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 6 but till the date of hearing on 13 th June, 2023, the same is not yet granted by the AO.) 3) Subsequently, the matter was re-fixed for hearing before the CIT(A) on 5 th October, 2023 and lastly on 19 th October, 2023, and the assessee filed the same reply, that inspection of assessment records and certified copy of order sheet not yet granted by AO and as such written submissions cannot be filed. 4) Eventually, in absence of any submission on merits by the assessee, the first appellate authority dismissed the appeal sustaining the additions by the AO., vide order dated 30/10/2023, against which this appeal has been filed before the Tribunal. 5) Though the assessee has preferred nine grounds of appeal in his memorandum of appeal, the Ld. AR, prayed before the Bench, to take up ground number – 7, first of all, because the same is a legal ground where the assessee has challenged the issue of statutory notice u/s 143(2) of the Act 61 , and since it goes to the root of the matter the same needs to be adjudicated upon . 6. Ground No. – 7 is reproduced as under: “7. That the assessment framed u/s 147 is bad in law as the jurisdictional notice u/s 143(2) was not issued by the AO.” I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 7 7. Though this ground has not been specifically agitated before the first appellate authority, this ground being a legal issue, the assessee is permitted to take up this ground for the first time before the Tribunal. 8. The Ld. A/R submitted that the assessee (appellant) has filed his return in response to notice u/s 148, on 29 th July, 2017, before the AO, but the AO has never issued the statutory notice u/s 143(2), which is the requirement for assumption of jurisdiction. In course of assessment proceedings a copy of the said return was also handed over to the AO, but even then also the AO never issued the statutory notice u/s 143(2), and proceeded with the assessment on the basis of a notice u/s 142(1) along with questionnaire. He pointed out that even in the entire body of the assessment order, the fact of issue of notice u/s 143(2) is not mentioned. 8.1) He further pointed out, that in order to ascertain the fact of the matter , assessee and his A/ R , has repeatedly visited the office of the AO , in pursuance of the assessment records but to no avail and he has filed a short paper book before the Bench , containing copies of letters filed before the department on 9 th April, 2019 , on 24 th April, 2023, 23 rd October, 2023 and again on 2 nd January, 2024 , asking for permission of inspection of assessment records, certified copies of order sheets , copy of 143(2) notice if at all issued and existing in records , copy of recorded reasons for issue of notice u/s 148 , copies of information obtained from the bank I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 8 manager and other documents. Requisite Government fees for obtaining certified copy are also paid and challans are on record. But unfortunately, the same has not been issued till the date of hearing before the Tribunal. 8.2 He further drew the attention of the Bench, to the finding of the AO (in page – 2 of the assessment order), where the AO has categorically stated as follows: “Vide this notice, the assessee was required to file his return of income for the assessment year 2010-11 within 30 days from the receipt of this notice. In response to notice u/s 148 of the Act, the assessee filed copy of return of income for the assessment year 2010-11 declaring an income of Rs.1,89,231/- .” 9. Thereafter, he further drew the attention of the Bench, to the CIT(A) order, where the appellate authority has given a finding, (contained in page no 8 para 4. 1) which is reproduced as under: “In response to notice, appellant filed his return of income declaring total income at Rs.1,89,231/-. The reassessment proceedings were conducted by passing order u/s 143/147 dated 29.09.2017 and determining total income at Rs.23,00,710/-.” I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 9 9.1 He further stated that since it is clear from the facts that a return has been submitted in response to the notice u/s l48, of the Act 61, and the said return has been considered by the AO in framing the assessment u/s 143(3) / 147 of the Act 61, the nonissue of the statutory notice ,u/s 143(2), invalidates the entire proceedings and the said defect is incurable defect and also beyond the scope of section 292BB of the Act 61, and he prays before the Bench to quash the assessment, which is void ab initio. In support of his contention, he relies upon the judgment of the Hon’ble Supreme Court in the case of, Commissioner of Income Tax vs Laxman Das Khandelwal, 13 August, 2019 (AIR 2019 SUPREME COURT 3926, [2019], 108 taxmann.com 183(SC ), and also on the judgment of the Hon’ble Supreme Court in the case of ACIT vs Hotel Blue Moon [2010] 188 Taxman 113 ( SC ) CIVIL APPEAL NO. 1198 OF 2010 (Arising out of SLP(C) No. 22973 of 2007). He also referred to the judgment of the coordinate bench in the case of Punnu Synthetics Private Limited vs ITO, ITA No 35/Asr/2023, dated 14/06/2023, where the same issue has been decided by the Bench in favour of the assessee, the relevant portion is reproduced as follows: I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 10 “8. We heard the rival submission and considered the documents available in the record. From departmental assessment folder, it is clear that the department was not able to find any notice u/s 143(2) initiating the assessment proceeding. The Id AR also placed the online record before the bench but there is no trace of the notice U/s 143(2) of the Act. The Without issuance of notice u/s 143(2) is caused the assessment bad in law. We respectfully relied on the order of the Hon’ble Apex Court in the case of Hotel Blue Moon (supra) and Laxman Das Khandelwal (supra). 8.1. In view of the above, we conclude that there was no issuance of the valid statutory notice under section 143(2) of the Act within the prescribed time. The Id. DR has also not brought anything on record contrary to the arguments advanced by the Id. AR for the assessee. Thus, in the absence of the valid statutory notice, the assessment framed under section 144 of the Act is not sustainable. Hence, the ground raised by the assessee is allowed. Accordingly, the impugned assessment year 2017-18 is bad in law and liable to be quashed. The addition amount of Rs.4,87,83,498/- is deleted.” 10. On the other hand the Ld. DR, in course of the proceedings before the Tribunal, could not controvert the submission of the appellant, regarding non-issue I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 11 of notice u/s 143(2), and he has also expressed his inability to produce the assessment records. He relied on the order of the CIT(A). 11. We have heard both the rival submissions and considered the materials on record. We find that the assessee has repeatedly applied for inspection of case records, for obtaining certified copies of order sheets, and for obtaining copies of notice u/s 143(2), if the same at all exists in the files of the assessing officer, and has even paid the requisite fees by way of challan, but the same has not been allowed by the AO. The Ld. DR, could not confirm whether the statutory notice u/s 143(2) of the Act 61, has been issued or not in absence of assessment records in his custody. He has also expressed his inability to produce the same and he has also not brought anything on record contrary to the arguments advanced by the Ld. AR. 12. Under such circumstances we hold that the AO has not issued the statutory notice u/s 143(2) of the Act 61, in response to return filed u/s 148 of the Act 61. It is not a case that notice u/s 143(2) has been issued, and not served upon the assessee, but it is a case where the notice u/s 143(2) has never been issued at all, for assumption of jurisdiction, and the non-issue of the statutory notice u/s 143(2) is an incurable defect which cannot be cured, because the basic foundation of the assessment proceedings is bad in law. 13. As this appeal has been decided on the ground of jurisdiction in the assessment for non-issuance of notice U/s 143(2) so the Ground no-7 is fully I.T.A. No.63/Asr/2024 Assessment Year: 2010-11 12 allowed in favour of the assessee. We are not dealing with the merits of the additions and the issue involved in other grounds. 14. In the result, the appeal of the assessee bearing ITA No.63/Asr/2024 is allowed. Order pronounced in the open court on 03.05.2024 Sd/- Sd/- (Dr. M. L. Meena) (Udayan Das Gupta) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order