Ms. Deepika Chopra, New Delhi V. ITO, New Delhi

ITA 6751/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7852 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 22-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 26-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAYAM GPTRI
• Keywords: Principle of natural justice; Peak credit; Validity of assessment
• Section: 142(1); 6; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI L.P. SAHU ITA NO S . 6 75 1 & 6752 /DEL/201 3 ASSESSMENT YEAR: 200 5 - 0 6 MS. DEEPIKA CHOPRA, VS. ITO, 16/34, TILAK NAGAR, WARD - 25(4), NEW DELHI. NEW DELHI. (PAN: B A OPC9839C ) (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI MANOJ GUPTA, CA DEPARTM ENT BY: SHRI SHRAYAM GPTRI , SR. DR DATE OF HEARING : 22 . 0 2 .201 6 DATE OF PRONOUNCEMENT: 03 : 0 5 .201 6 ORDER PER I.C. SUDHIR : JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED SUSTAINING OF ADDITIONS BY THE LEARNED CIT(APPEALS) ON THE FOLLOWING GROUNDS: GROU NDS IN ITA 6752 : 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY THE LEARNED CIT(APPEALS) - XVII, NEW DELHI HEREINAFTER REFERRED AS CIT(A), BEING PERVERSE, SELF CONTRADICTORY AND AGAINST THE PROVISIONS OF INCOME - TAX ACT, 1961 , ACT, AND VOID - AB - INITIO AND HENCE IS LIABLE TO SET ASIDE. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) UPHOLDING ASSESSMENT ORDER ADMITTEDLY ASSESSING INCOME IN THE HANDS OF MINOR BY INVOKING PROVISIONS OF SECTION 6 4(1A) OF ACT IN SELF CONTRADICTION OF DECLINING CONTENTIN OF 2 APPELLANT OF HAVING EARNED INCOME OUT OF HER SKILL, IS CONTRARY TO PROVISIONS OF ACT. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THE AC TION OF LEARNED ASSESSING OFFICER OF PASSING ASSESSMENT ORDER UNDER SEC. 144 OF ACT BY GIVING GO BYE TO THE CONTENTIONS RAISED BY APPELLANT AND ORDER PASSED BY LEARNED CIT(APPEALS) QUASHING PENALTY LEVIED UNDER SEC. 271(1)(B) OF ACT. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) ERRED IN NOT ACCEPTING EXPLANATION FOR THE SOURCE OF CREDIT/PEAK CREDIT IN THE BANK ACCOUNT AND REJECTED EXPLANATION ON EXTRANEOUS REASONS. 2. IN OTHER APPEAL I.E. ITA NO. 6752/DEL/2013, THE A SSESSEE HAS QUESTIONED SUSTAINING OF PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT ON THE FOLLOWING GROUNDS: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY THE LEARNED CIT(APPEALS) - XVII, NEW DELHI HEREINAFTER REFERRED AS CIT(A), UPHOLDING LEVYING OF PENALTY UNDER SEC. 271(1)(C) IS BAD IN LAW AND VOID - AB - INITIO. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING PENALTY BASED UPON ASSESSMENT ORDER, ON A MINOR, PASSED UN DER SEC. 144 OF ACT WHICH ITSELF IS NON - EST. 3 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING ORDER LEVYING PENALTY UNDER SEC. 271(1)(C) OF ACT IN ABSENCE OF FILING OF RETURN OF INCOME U/S. 139(1) OF AC T BECAUSE APPELLANT WAS STATUTORILY NOT REQUIRED TO FILE HER RETURN OF INCOME. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) IGNORED THE FACT THAT PRE - REQUISITE OF LEVYING PENALTY ORDER UNDER SEC. 271(1)(C) OF ACT WERE NOT FULFILLED BY LD. ASSESSING OFFICER. 5. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING ORDER LEVYING PENALTY UNDER SEC. 271(1)(C) OF ACT FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICUL ARS BASED ON DISMISSAL OF APPEAL FILED BY APPELLANT AGAINST ORDER PASSED UNDER SEC. 144 OF ACT. 6. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING LEVY OF PENALTY ORDER IN CONTRAVENTION TO SETTLE PRINCIPL ES OF NATURAL JUSTICE. 3. IN THE ABOVE APPEALS, THE APPELLANT - ASSESSEE HAS RAISED TWO BASIC ISSUES BESIDES QUESTIONING THE FIRST APPELLATE ORDER ON SEVERAL GROUNDS AS REPRODUCED HEREINABOVE. THESE BASIC ISSUES ARE VIOLATION OF PRINCIPLES OF NATURAL JUSTI CE BY THE ASSESSING OFFICER IN FRAMING THE ASSESSMENT UNDER SECTION 144 OF THE ACT AND FRAMING OF THE SAID ASSESSMENT AGAINST THE 4 ASSESSEE WHO WAS MINOR DURING THE PREVIOUS YEAR RELEVANT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 4. SO FAR AS ISSUE OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BY THE ASSESSING OFFICER IN FRAMING THE ASSESSMENT UNDER SEC. 144 OF THE ACT IS CONCERNED, THE CONTENTION OF THE LEARNED AR REMAINED THAT BEFORE THE LEARNED CIT(APPEALS), THE ASSESSEE HAD CONTENDED THAT THE ASSESS MENT ORDER PASSED UNDER SEC. 144 OF THE ACT IS LIABLE TO BE QUASHED AS THE SAME HAS BEEN PASSED IN CONTRAVENTION TO THE PRINCIPLES OF NATURAL JUSTICE BECAUSE THE ORDER HAS BEEN PASSED WITHOUT SERVING THE REQUISITE NOTICE ON THE ASSESSEE. IN SUPPORT, AN AFF IDAVIT OF SHRI ASHOK K. CHOPRA, UNCLE OF THE ASSESSEE REGARDING NON - RECEIPT OF ANY NOTICES ISSUED UNDER SEC. 142(1) OF THE INCOME - TAX ACT, 1961 FOR THE ASSESSMENT YEAR IN QUESTION WAS FURNISHED. IT WAS FURTHER EXPLAINED THAT ONLY ON RECEIPT OF THE ASSESSME NT ORDER BY MR. ASHOK K. CHOPRA ON 04.01.2008, THE ASSESSEE CAME TO KNOW THAT IN THE SAID ORDER THE ASSESSING OFFICER HAD CLAIMED ISSUANCE OF NOTICE UNDER SEC. 142(1) OF THE ACT AND SERVICE THEREOF ON THE ASSESSEE BY SPEED POST ON THE LAST AVAILABLE ADDRES S ON RECORD. 5. THE LEARNED AR CONTENDED BEFORE US THAT IN THE ASSESSMENT ORDER NO WHERE IT HAS BEEN MENTIONED AS TO WHEN THE CLAIMED FIRST NOTICE UNDER SEC. 5 142(1) OF THE ACT WAS ISSUED THROUGH THE SPEED POST ON THE LAST AVAILABLE ADDRESS OF THE ASSESSEE ON THEIR RECORD. THE ASSESSING OFFICER WHILE MENTIONING THE ISSUANCE OF ANOTHER NOTICE AGAIN HAS NOT MENTIONED THE REFERENCE OF THE POSTAL RECEIPT THROUGH WHICH IT WAS CLAIMED TO HAVE BEEN ISSUED ON 06.12.2007 FOR 14.12.2007. THE LEARNED AR POINTED OUT T HAT ON THIS CONTENTION OF NON - SERVICE OF NOTICE BEFORE THE LEARNED CIT(APPEALS), THE LEARNED CIT(APPEALS) HAS CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER . IN THE REMAND REPORT, REPRODUCED AT PAGE NO. 8 OF THE FIRST APPELLATE ORDER , THE ASSESSING OF FICER AGAIN HAS NOT SPECIFIED AS TO WHEN NOTICES UNDER SEC. 142(1) WERE ISSUED TO THE ASSESSEE AND WHAT WAS THE RECEIPT NUMBER ISSUED BY THE POSTAL DEPARTMENT THROUGH WHICH THOSE NOTICES WERE POSTED. IGNORING THE SAME, THE LEARNED CIT(APPEALS) HAS REJECTED THE GROUND OF THE FIRST APPEAL QUESTIONING THE VALIDITY OF ASSESSMENT ORDER IN ABSENCE OF SERVICE OF NOTICES TO THE ASSESSEE. 6. THE LEARNED SENIOR DR ON THE OTHER HAND PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW THAT THE ASSESSING OFFICER HAS MENTIONED THE DATES OF THE NOTICES ISSUED TO THE ASSESSEE AND WHEN THERE WAS NO RESPONSE, THE ASSESSING OFFICER WAS HAVING NO OPTION BUT TO PROCEED FOR FRAMING THE ASSESSMENT EX PARTE UNDER SEC. 144 OF THE ACT. 6 7. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND SUBSTANCE IN THE CONTENTIONS OF THE LEARNED AR THAT COMPLIANCE OF PRINCIPLES OF NATURAL JUSTICE IS SINE QUA NON FOR A VALID PROCEEDING AGAINST A PERSON OR AN ASSESSEE IN A PRESENT CASE BY AN AUTHORITY. BEFORE PROCEEDING EX PARTE, SUCH AUTHORITY IN TH E PRESENT CASE, THE ASSESSING OFFICER WAS REQUIRED TO RECORD FIRST THE DATE OF SERVICE OF NOTICE UPON THE ASSESSEE ON THE AVAILABLE ADDRESS. HE IS UNDER OBLIGATION TO MENTION THE DATE OF THE NOTICE, THE DATE OF ISSUE OF SUCH NOTICE, THE NUMBER OF RECEIPT T HROUGH WHICH THE NOTICE WAS ISSUED THROUGH SPEED POST OR REGISTERED POST OF THE POSTAL DEPARTMENT AND DATE OF SERVICE OF SUCH NOTICE UPON THE ASSESSEE. IN A CASE WHERE NOTICE HAS BEEN ISSUED THROUGH SPEED POST OR REGISTERED POST OF THE POSTAL DEPARTMENT AN D THERE WAS NO ANY RESPONSE FROM THE ASSESSEE NOR THE SAID NOTICE HAS BEEN RETURNED UNSERVED, THE ASSESSING OFFICER HAS TO WAIT AT LEAST FOR 30 DAYS FROM THE DATE OF ISSUE OF THE NOTICE TO PROCEED EX PARTE ON THE BASIS OF DEEMING SERVICE. IT IS SO REQUIRED UNDER ORDER - V RULE - 9(5) OF THE CODE OF CIVIL PROCEDURE WHICH IS APPLICABLE FOR THE PURPOSE IN THE CASE OF SERVICE OF NOTICES UNDER INCOME - TAX ACT, 1961. IN THE PRESENT CASE, THE LAST NOTICE IS STATED TO HAVE BEEN ISSUED ON 06.12.2007 FOR 14.12.2007 AND E X PARTE ASSESSMENT ORDER UNDER SEC. 144 OF THE ACT HAS BEEN PASSED ON 17.12.2007. THUS, SERVICE OF NOTICE CLAIMED TO HAVE BEEN ISSUED BY THE ASSESSING OFFICER ON THE LAST 7 KNOWN ADDRESS OF THE ASSESSEE CANNOT BE DEEMED IN THE PRESENT CASE IN ABSENCE OF ABOV E MENTIONED SPECIFIC REQUIREMENT COMPLIED BY THE ASSESSING OFFICER. THUS, IT IS EVIDENT THAT THE ASSESSMENT ORDER HAS BEEN PASSED EX PARTE UNDER SEC. 144 OF THE ACT IN VIOLATION OF PRINCIPLES OF JUSTICE AND THE SAME IS NOT MAINTAINABLE AS A VALID ORDER. T HE SAME IS HELD AS VOID AB INITIO AND IT IS QUASHED AS SUCH. THE PENALTY LEVIED UNDER SEC. 271(1)(C) OF THE ACT ON THE BASIS OF SAID INVALID ASSESSMENT ORDER IS THUS ALSO NOT MAINTAINABLE AND IS QUASHED AS SUCH. IN VIEW OF THESE FINDINGS, REMAINING GROUNDS HAVE BECOME INFRUCTUOUS AND THEY DO NOT NEED ANY INDEPENDENT ADJUDICATION. 8. IN RESULT, BOTH T HESE APPEALS ARE A LLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 03 . 0 5 . 201 6 S D/ - SD/ - ( L .P . S A HU ) ( I.C. S UDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: / 0 5 /201 6 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 8 DATE DRAFT DICTATED DIRECTLY ON COMPUTER 03 . 0 5 .201 6 DRAFT PLACED BEFORE AUTHOR 03 . 0 5 .2016 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 03 .05 .2016 APPROVED DRAFT COMES TO THE SR.PS/PS 03 . 0 5 .2016 KEPT FO R PRONOUNCEMENT ON 03 .0 5 .2016 FILE SENT TO THE BENCH CLERK 04 . 0 5 .2016 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.