JAWAHAR HIRANAND BHATIA, MUMBAI V. ITO WD 25(2)(3), MUMBAI

ITA 6764/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84650 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: J
• Next Hearing Date: 16-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 05-11-2012
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA P YADAW
• Assessee Lawyers: K SHIVARAM
• Keywords: Principle of natural justice; Period of limitation; Assessment record; Time period of passing order
• Section: 143(3); 131; 54

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO. 6764/M/2012 ( AY: 2009 - 2010 ) JAWAHAFR HIRANAND BHATIA, A - 61/62, IRIS PARK, PRABHAT ESTATE ROAD, JOGESHWARI (W), MUMBAI 400 102. / VS. ITO, WARD 26(2)(3), 6 TH FLOOR, DR. K.G. AAYURVEDIK HOSPITAL, CHARNI ROAD, MUMBAI 400 002. ./ PAN : ACRPB 0143N ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI K. SHIVARAM & NEELAM JADHAV / RESPONDENT BY : SHRI AKHILENDRA P YADAW / DATE OF HEARING : 11.11 .2014 / DATE OF PRONOUNCEMENT : 19 .12 .2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 5.11.2012 IS AGAINST THE ORDER OF THE CIT (A) - 28, MUMBAI DATED 31.8.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD CIT (A) FAILED TO APPRECIATE THE FACT THAT NO NOTICE U/S 143(2) WAS SERVED ON THE APPELLANT, AS MENTIONED IN THE RETURN OF INCOME, NON RECEIPT OF NOTICE WAS RAISED BEFORE THE ASSESSING OFFICER AND CIT (A), AS THERE IS NO MANDATORY NOTICE ISSUED U/S 143(2) THE ENTIRE ASSESSMENT IS BAD IN LAW AND LIABLE TO BE QUASHED. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD CIT (A) FAILED TO APPRECIATE THE FACT THAT THE NOTICE FOR HEARING WAS RECEIVED ONLY 10.12.2011 AND THE ASSESSMENT ORDER U/S 14 3(3) WAS PASSED WITHIN 16 DAYS I.E., ON 26.12.2011 AND THUS NO SUFFICIENT OPPORTUNITY WAS GIVEN TO PRESENT THE CASE. THE ASSESSING OFFICER RELIED ON THE INSPECTORS REPORT WITHOUT GIVING COPY OF THE SAME AND WITHOUT GIVING ANY OPPORTUNITY FOR CROSS - EXAMINA TION. THUS, THE PRINCIPLES OF NATURAL JUSTICE WERE GROSSLY VIOLATED, HENCE, THE ASSESSMENT ORDER U/S 143(3) IS LIABLE TO BE QUASHED. 3. THE LD CIT (A) FAILED TO APPRECIATE THE FACT THAT THE TWO ADJACENT FLATS ARE USED AS ONE HOUSE HAVING COMMON KITCHEN, A ND THE FAMILY LIVED TOGETHER AS ONE FAMILY, HENCE, DEDUCTION U/S 54 MAY BE GRANTED AS CLAIMED BY THE ASSESSEE. 2 4. WITH OUT PREJUDICE TO THE ABOVE, THE LD CIT (A) FAILED TO APPRECIATE THE FACT THAT THERE IS NO RESTRICTION IN INVESTMENTS AS REGARDS NUMBER OF FLATS IN SECTION 54, HENCE DEDUCTION U/S 54 MAY BE GRANTED AS CLAIMED BY THE APPELLANT. 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE GROUND NO.1 AND MENTIONED THAT THE ASSESSMENT IS LIABLE TO BE QUASHED CONSIDERING THE FAC T THAT THE STATUTORY NOTICE U/S 143(2) OF THE ACT WAS NOT ISSUED AND SERVED ON THE ASSESSEE WITHIN THE PERMITTED TIME. EXPLAINING THE SAID GROUND NO.1, LD COUNSEL BROUGHT OUR ATTENTION TO THE PAGE 1 OF THE PAPER BOOK (THE ACKNOWLEDGEMENT OF RETURN OF INCO ME) AND MENTIONED THAT THE ADDRESS OF THE ASSESSEE AS MENTIONED IN THE RETURN UNDER THE HEADING PERSONAL INFORMATION READS AS UNDER: FLAT/DOOR/BLOCK NO.A - 62, IRIS PARK, PRABHAT ESTATE ROAD, JOGESHWARI (WEST) , MUMBAI, MAHARASHTRA. 4. THE SAME ADDRESS WAS MENTIONED IN THE COMPUTATION OF INCOME (PAGE 2 OF THE PB). HOWEVER, IT IS THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSEE HAS NOT RECEIVED ANY NOTICE U/S 143(2) OF THE ACT. BRINGING OUR ATTENTION TO PAGES 5,7,8 ETC, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE REST OF THE CORRESPONDENCE AND NOTICES I.E, NOTICE U/S 143(2) , SHOW CAUSE NOTICE, ASSESSMENT SUMMONS U/S 131 OF THE ACT ETC, WERE SERVED TO THE JOGESDWARI ADDRESS. NON ISSUANCE AND SERVICE OF THE STATUTORY NOTICE U/S 143(2) OF THE ACT WAS QUESTI ONED DURING THE ASSESSMENT PROCEEDINGS. FOR THIS, LD COUNSEL BROUGHT OUR ATTENTION TO PAGE 11 OF THE PAPER BOOK, WHICH CONTAINS THE ASSESSEES SUBMISSIONS TO THE ASSESSING OFFICER ABOUT THE FACT OF NON - RECEIPT OF THE SAID STATUTORY NOTICE. HE ALSO FILED A COPY OF THE LETTER ADDRESSED TO THE ASSESSING OFFICER ASKING FOR THE COPY OF THE SAID NOTICE DATED 14.9.2010. FURTHER, THE FACT THAT THE ASSESSING OFFICER REJECTED THE SAID REQUEST OF THE ASSESSEE WAS ALSO BROUGHT TO OUR NOTICE. IN RESPONSE TO THE QUER Y FROM THE BENCH TO THE LD DR ON THE ISSUE OF SERVICE OF NOTICE DATED 14.9.2010, LD DR BROUGHT THE ASSESSMENT RECORD AND MENTIONED THAT THE SAID NOTICE WAS ISSUED BY THE RPAD BUT THE FILE DOES NOT CONTAIN ANY PROOF OF ISSUANCE TO THE ASSESSEE. ON PERUSAL OF THE SAID NOTICE, WE FIND THE ADDRESS WRITTEN ON THE SAID NOTICE REFLECTS THE FOLLOWING. JAWAHAR HIRANAND BHATIA, A - 6, NAVEEN BHARAT CHS, PLOT NO.4, 10 TH ROAD, JVPD SCHEME, MUMBAI - 400 049. 3 5. IN THIS REGARD, LD DR SUBMITTED THAT THE NOTICE WAS GENERATED ELECTRONICALLY RELYING ON THE PAN DATA AND HE ADMITTED TO THE FACT THAT THE STATUTORY NOTICE WAS NOT SENT TO THE ADDRESS GIVEN IN THE RETURN OF INCOME, WHICH IS THE REQUIREMENT OF THE PROCEDURES. DURING THE REBUTTAL TIME, LD COUNSEL FOR THE ASSESSEE SUBM ITTED THAT UNDER THE FACTUAL MATRIX OF THE PRESENT CASE, ASSESSMENT IS REQUIRED TO BE QUASHED AS THE ASSESSING OFFICER FAILED TO ISSUE AND SERVICE THE NOTICE ON THE ASSESSEE ON THE CORRECT ADDRESS. FOR THIS PROPOSITION, HE RELIED ON VARIOUS DECISIONS MENT IONED IN PARA 4 OF HIS WRITTEN SUBMISSIONS (FACTS SHEET). HE ALSO FILED A COPY OF THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. MASCOMPTEL INDIA LTD [2012] 345 ITR 58 (DELHI) AND THE RELEVANT HELD PORTION WAS READ OUT BY THE LD COUNSEL WHICH IS AS UNDER: HELD, DISMISSING THE APPEAL, THAT NO ATTEMPT WAS MADE TO SERVE THE 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 - 2007. SUBSEQUENT ATTEMPT TO SERVE ANOTHER NOTICE LONG AFTER THE EXPIRY OF THE LIMITATION PERIOD PRESCRIBED BY THE PROVISO, COULD NOT HELP THE REVENUE. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE WRITTEN SUBMISSIONS AS WELL AS THE CITED JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MASCOMPTEL INDIA LTD (SUPRA), WE FIND THAT IT IS A FACT THAT ASSESSING OFFICER FAILED TO ISSUE A STATUTORY NOTICE U/S 142(2) OF THE ACT TO THE CORRECT ADDRESS OF THE ASSESSEE. THE CORRECT ADDRESS WAS GIVEN IN THE RETURN OF INCOME AND THE RETURN OF INCOME WAS AVAILABLE TO THE ASSESSING OFFICER AT THE TIME OF ISSUE OF THE SAID NOTICE. ASSESSING OFFICER MECHANICALLY RELIED ON THE COMPUTER GENERATED NOTICE WITHOUT APPLICATION OF MIND. IT IS UNFORTUNATE THAT THE ASSESSING OF FICERS DEALT WITH THE STATUTORY PROVISIONS IN THIS CASE WITHOUT APPLICATION OF THEIR MIND. CONSIDERING THE ABOVE SETTLED LEGAL POSITION AND ALSO AFTER NOTING THAT THE ASSESSEE HAS NOT RECEIVED NOTICE EVENTUALLY, THE ASSESSMENT IS REQUIRED TO BE QUASHED. A CCORDINGLY, THE LEGAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. 7. CONSIDERING OUR DECISION ON THE LEGAL GROUND IN FAVOUR OF THE ASSESSEE, THE ADJUDICATION OF THE OTHER ISSUES INVOLVED IN THE OTHER GROUNDS BECOMES ACADEMIC EXERCISE. ACCORDINGLY, THE OTHER GROUNDS ARE DISMISSED. 4 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DECIDED IN THE ABOVE MENTIONED MANNER. ORDER PRONOUNCED IN THE O PEN COURT ON 19TH DECEMBER, 2014. SD/ - SD/ - ( SANJAY GARG ) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 19 /12/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI