M/s Ashoka Industrial Corporation, Goraya V. The Income Tax Officer, Phagwara

ITA 694/ASR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95051 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-09-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GHANSHAM SHARMA
• Assessee Lawyers: P N ARORA
• Keywords: Reason to believe
• Section: 147; 148; 143(3); 142(1); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.694(ASR)/2014 ASSESSMENT YEAR:2004-05 PAN: ABNPK1078L M/S. ASHOKA INDUSTRIAL CORPORATION VS. INCOME TAX O FFICER, CINEMA ROAD, GORAYA. WARD-3, PHAGWARA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.P.N.ARORA, ADVOCATE RESPONDENT BY:SH. GHANSHAM SHARMA, DR DATE OF HEARING: 22/09/2015 DATE OF PRONOUNCEMENT: 18/11/2015 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 200407, AGAINST THE ORDER DATED 01.10.2014, PASSED BY THE L D. CIT(A), JALANDHAR. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THAT THE ORDER OF THE AO IS AGAINST LAW, FACTS & CIRCUMSTANCES OF THE PRESENT CASE. 2. THAT NO NOTICE U/S 148 WAS EVER SERVED ON THE AS SESSEE, HENCE THE REASSESSMENT DESERVES TO BE QUASHED AS VO ID ABINITIO. 3. THAT THE AO HAS WRONGLY MADE AN ADDITION OF RS.3 ,08,000/- ON ACCOUNT OF PAYMENT RECEIVED FROM M/S. AZAD ENGIN EERING WORKS, BATHINDA. 4. THAT THE APPELLANT REQUEST FOR ACCEPTING THE RET URNED INCOME BY DELETING THE IMPUGNED ADDITION MADE IN THE DECLA RED INCOME OF THE ASSESSEE. 5. THAT THE INTEREST U/S 234B & 234C HAS WRONGLY BE EN CHARGED. 2. GROUND NO.1 IS GENERAL. ITA NO.694/ASR/2014 ASSESSMENT YEAR: 2004-05 2 3. AS PER GROUND NO.2, NO NOTICE U/S 148 OF THE INC OME TAX ACT, 1961 ( IN SHORT, THE ACT), WAS NEVER SERVED ON TH E ASSESSEE. 3. THE FACTS PERTAINING TO THIS ISSUE AS PER THE LD . CIT(A)S ORDER ARE THAT NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE AS SESSEE ON 28.03.2011 AND WAS SERVED ON THE ASSESSEE ON 29.03.2011. THE A O ASSESSED THE INCOME OF THE ASSESSEE AT RS.3,65,100/- VIDE ORDER DATED 24.10.2011 PASSED UNDER SECTION 143(3) READ WITH SECTION 147 O F THE ACT. 4. BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED AS FOLLOWS: THE ASSESSEE NEVER RECEIVED ANY NOTICE U/S 148 BEF ORE 31.03.2011 THAT IS WITHIN ITS DUE DATE. THE ASSESSEE RECEIVED A LETTER DATED 10.06.2011 ASKING FOR FILING OF RETURN FOR THE AFOR ESAID ASSESSMENT YEAR ONLY ON 14.06.2011. THIS WAS THE FIRST COMMUN ICATION RECEIVED BY THE ASSESSEE FROM THE DEPARTMENT, ASKIN G FOR FILING OF RETURN FOR THE AFORESAID ASSESSMENT YEAR. IN RESPON SE TO THIS LETTER THE ASSESSEE FILED INCOME TAX RETURN ON 16.06.2011 UNDER PROTEST. THE ASSESSEE HAS DULY INTIMATED THE AO THAT HE NEVE R RECEIVED ANY NOTICE U/S 148 OF THE ACT. ON 5.7.11 THE ASSESSEE A PPLIED FOR THE COPY OF REASONS RECORDED FOR THE ISSUE OF THE NOTIC E U/S 148. PERUSAL OF THE REASONS INDICATES THAT THE REASSESSM ENT IS WITHOUT ANY BASE AND MATERIAL ON RECORD WHICH DESERVES TO B E QUASHED. THE SIGNATURE ON THE NOTICE ISSUED U/S 148 IS NONE OF THE PARTNER OR EMPLOYEE OF THE SAID CONCERN. THEREFORE, AS THE REVENUE HAVING ADDUCED NO MATERIAL TO SHOW THAT THE IMPUGNED NOTIC E U/S 148 WAS IN FACT SERVED UPON THE ASSESSEE WITHIN THE PRE SCRIBED TIME, THE EXPLANATION FILED BY THE ASSESSEE BEFORE THE AO STATING THAT IT HAS NOT RECEIVED ANY NOTICE ISSUED U/S 148 HAS TO B E ACCEPTED AS HELD BY DELHI HIGH COURT AS IN THE CASE OF CIT VS. SILVER STREAK TRADING PVT. LTD. REPORTED IN CTR VOL. 216 PAGE 261 . 5. HOWEVER, THE LD. CIT(A) OBSERVED AS FOLLOWS: ON PERUSAL OF THE RIVAL CONTENTIONS, IT HAS BEEN N OTICED THAT THE NOTICE U/S 148 OF THE ACT DATED 28.03.2011 WAS SERV ED BY THE ASSESSING OFFICER THROUGH NOTICE SERVER ON ONE SH. CHHOTE LAL ON 29.03.2011 WHO APPEARS TO BE THE REPRESENTATIVE OF THE ASSESSEE. 6. THE LD. CIT(A), THUS, HELD AS UNDER: ITA NO.694/ASR/2014 ASSESSMENT YEAR: 2004-05 3 I AM OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS ASSUMED VALID JURISDICTION OVER THE CASE OF THE ASS ESSEE BY ISSUE OF NOTICE U/S 148 OF THE ACT WHICH WAS ALSO SERVED ON THE REPRESENTATIVE OF THE ASSESSEE ON 29.03.2011. 7. THE LD. COUNSEL FOR THE ASSESSEE, CHALLENGING TH E LD. CIT(A)S ACTION, REITERATED THE STAND OF THE ASSESSEE, AS TAKEN BEFO RE THE LD. CIT(A). IT HAS BEEN ARGUED, AS ALSO STATED BY WAY OF WRITTEN SUBMI SSION, THAT THE ASSESSEE NEVER RECEIVED ANY NOTICE U/S 148 OF THE A CT BEFORE 31.03.2011, THAT IS, WITHIN THE DUE DATE. THE ASSESSEE RECEIVED A LETTER DATED 10.06.2011 ASKING FOR FILING OF RETURN FOR THE AFOR ESAID ASSESSMENT YEAR ONLY ON 14.06.2011. THIS WAS THE FIRST COMMUNICATIO N RECEIVED BY THE ASSESSEE FROM THE DEPARTMENT, ASKING FOR FILING OF RETURN FOR THE AFORESAID ASSESSMENT YEAR. IN RESPONSE TO THIS LETTER, THE AS SESSEE FILED INCOME TAX RETURN ON 16.06.2011 UNDER PROTEST. THE ASSESSEE HA D DULY INTIMATED THE AO THAT HE NEVER RECEIVED ANY NOTICE U/S 148 OF THE ACT. THE SIGNATURE ON THE NOTICE ISSUED U/S 148 WAS OF NONE OF THE PARTNERS OR EMPLOYEES OF THE SAID CONCERN. THEREFORE, THE REVEN UE HAS ADDUCED NO MATERIAL TO SHOW THAT THE IMPUGNED NOTICE U/S 148 W AS IN FACT SERVED UPON THE ASSESSEE WITHIN THE PRESCRIBED TIME. THE E XPLANATION FILED BY THE ASSESSEE BEFORE THE AO STATING THAT IT HAS NOT RECEIVED ANY NOTICED ISSUED U/S 148 HAS TO BE ACCEPTED AS HELD BY THE HO NBLE DELHI HIGH COURT, AS IN THE CASE OF CIT VS. SILVER STREAK TRA DING PVT. LTD., REPORTED IN 206 CTR 261. ITA NO.694/ASR/2014 ASSESSMENT YEAR: 2004-05 4 8. AN AFFIDAVIT DATED 21.07.2015, OF SH. MANOJ KUMA R S/O SH. DEV DASS, PARTNER OF THE ASSESSEE FIRM HAS ALSO BEEN FI LED. THEREIN, IT HAS BEEN STATED, INTER-ALIA, AS FOLLOWS: 2. THAT A LETTER DATED 10.06.2011 ASKING FOR FILIN G OF INCOME TAX RETURN FOR THE ASSESSMENT YEAR 2004-05 WAS RECEIVED ON 14.06.2011. THIS WAS THE FIRST COMMUNICATION RECEIV ED BY THE ASSESSEE FROM THE INCOME TAX DEPARTMENT FOR THE ABO VE SAID YEAR. 3. THAT NO NOTICE UNDER SECTION 148 WAS EVER RECEIV ED BY THE ASSESSEE OR SERVED ON ANY OF THE PARTNERS/RELATIVE OR EMPLOYEES OF THE SAID CONCERN. SH. CHHOTE LAL IS NOT RELATED TO ANY OF THE PARTNER OR EMPLOYEE OF THE FIRM. 4. THAT THE ASSESSEE RAISED THE OBJECTION REGARDING THE NON RECEIPT OF NOTICE U/S 148 ON THE FIRST DATE OF HEAR ING WHICH REMAINED INDISPOSED OFF BY THE DEPARTMENT. 9. THE LD. COUNSEL FOR THE ASSESSEE HAD DRAWN MY AT TENTION TO APB - 18, WHICH IS A COPY OF ASSESSEES LETTER DATED 16.0 6.2011 TO THE AO STATING THEREIN, THAT THE ASSESSEE NEVER RECEIVED A NY NOTICE U/S 148 OF THE ACT FOR THE ASSESSMENT YEAR 2004-05; THAT THE A O VIDE LETTER DATED 10.06.2011 ASKING FOR FILING OF RETURN WAS RECEIVED BY THE ASSESSEE ONLY ON 14.06.2011, AND THAT THE ASSESSEE FILED THE RETU RN ON 16.06.2011 UNDER PROTEST. THE LD. COUNSEL HAS ALSO DRAWN MY AT TENTION TO APB 19- 22, WHICH IS A COPY OF THE ASSESSEES WRITTEN SUBMI SSIONS BEFORE THE AO, WHEREIN ALSO, THE ASSESSEE, INTER-ALIA, HAS STATED THAT NO NOTICE U/S 148 WAS SERVED ON THE ASSESSEE. ITA NO.694/ASR/2014 ASSESSMENT YEAR: 2004-05 5 10. ATTENTION HAS ALSO BEEN DRAWN TO APB- 1 TO 5, W HICH IS A COPY OF THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A) . THE RELEVANT PORTION OF THE SAME IS REPRODUCED AS UNDER: THE ASSESSEE NEVER RECEIVED ANY NOTICE U/S 148 BEF ORE 31.03.2011 THAT IS WITHIN ITS DUE DATE. THE ASSESSEE RECEIVED A LETTER DATED 10.06.2011 ASKING FOR FILING OF RETURN FOR THE AFOR ESAID ASSESSMENT YEAR ONLY ON 14.06.2011. THIS WAS THE FIRST COMMUNI CATION RECEIVED BY THE ASSESSEE FROM THE DEPARTMENT, ASKING FOR FIL ING OF RETURN FOR THE AFORESAID ASSESSMENT YEAR. IN RESPONSE TO THIS LETTER THE ASSESSEE FILED INCOME TAX RETURN ON 16.06.2011 UNDE R PROTEST. THE ASSESSEE HAS DULY INTIMATED THE AO THAT HE NEVER R ECEIVED ANY NOTICE U/S 148 OF INCOME TAX ACT. ON 05.07.2011, TH E ASSESSEE APPLIED FOR THE COPY OF REASONS RECORDED FOR THE IS SUE OF THE NOTICE U/S 148. PERUSAL OF THE REASONS INDICATES THAT THE REASSESSMENT IS WITHOUT ANY BASE AND MATERIAL ON RECORD WHICH DESER VES TO BE QUASHED. THE SIGNATURE ON THE NOTICE ISSUED U/S 148 IS NONE OF THE PARTNER OR EMPLOYEE OF THE SAID CONCERN. THEREFORE, AS THE REV ENUE HAVING ADDUCED NO MATERIAL TO SHOW THAT THE IMPUGNED NOTI CE U/S 148 WAS IN FACTS SERVED UPON THE ASSESSEE WITHIN THE PRESCR IBED TIME, THE EXPLANATION FILED BY THE ASSESSEE BEFORE THE AO STA TING THAT IT HAS NOT RECEIVED ANY NOTICE ISSUED U/S 148 HAS TO BE AC CEPTED AS HELD BY DELHI HIGH COURT AS IN THE CASE OF CIT VS. SILVE R STREAK TRADING PVT. LTD. REPORTED IN CTR 216 PAGE 261. 11. THUS, THE LD. COUNSEL FOR THE ASSESSEE HAS CONT ENDED THAT IN THE ABSENCE OF SERVICE OF NOTICE U/S 148 OF THE ACT, TH E REOPENING OF THE COMPLETED ASSESSMENT OF THE ASSESSEE FOR THE YEAR U NDER CONSIDERATION AND ALL PROCEEDINGS SUBSEQUENT THERETO, INCLUDING THE ASSESSMENT ORDER, ARE BAD IN LAW AND THAT THE SAME MAY BE CANCELLED. RELIANCE HAS BEEN PLACED ON THE FOLLOWING CASE LAWS: I) GURCHARAN SINGH, CHANDIGARH VS. ITO, WARD 2(II) , MUKTSAR, ITA NO.331(ASR)/2014, DATED 19.02.2015 (I TAT, AMRITSAR BENCH). ITA NO.694/ASR/2014 ASSESSMENT YEAR: 2004-05 6 II) CIT VS. LUNAR DIAMONDS LTD., 281 ITR 1 (DELHI HC ) III) CIT VS. RAJESH KUMAR SHARMA, 311 ITR 235 (DELHI HC) IV) ITO VS. SH. SANJEEV KUMAR PROP. BHULLA MAL PARSHOT AM LAL, FEROZEPUR ITA NO. 358(ASR)/2006, DATED 09.11.2007 (ITAT (SMC) AMRITSAR BENCH). 12. THE LD. DR, ON THE OTHER HAND, STRONGLY RELYING ON THE IMPUGNED ORDER, HAS CONTENDED THAT THE NOTICE U/S 148 OF THE ACT WAS PROPERLY SERVED ON THE ASSESSEE AND THAT THE ASSESSEE HAS FA ILED TO DISCHARGE ITS ONUS IN THIS REGARD. 13. HAVING HEARD THE RIVAL PARTIES AND HAVING PERUS ED THE MATERIAL ON RECORD, I FIND THAT THE ASSESSEE, VIDE LETTER DATED 16.06.2011 (SUPRA), TOOK THE OBJECTION REGARDING NON-SERVICE OF NOTICE U/S 1 48 OF THE ACT, IMMEDIATELY ON RECEIPT OF THE AOS LETTER DATED 10. 06.2011. HOWEVER, THE AO NEITHER DEALT WITH, NOR DECIDED THIS OBJECTION. REMARKABLY, THE ASSESSMENT ORDER DOES NOT CONTAIN EVEN AS MUCH AS A MENTION OF THIS OBJECTION RAISED SPECIFICALLY BY THE ASSESSEE. 14. ON THE OTHER HAND, THE LD. CIT(A), THOUGH HE DE ALT WITH THE ASSESSEES OBJECTION THAT NO NOTICE U/S 148 OF THE ACT WAS SERVED BY THE PROCESS SERVER ON THE ASSESSEE, OBSERVED THAT NOTIC E U/S 148 WAS SERVED BY THE PROCESS SERVER ON ONE SH. CHHOTE LAL ON 29.0 3.2011, WHO APPEARS TO BE THE REPRESENTATIVE OF THE ASSESSEE. 15. THE REQUIREMENT OF LAW IN THIS REGARD IS SPECIF IC: 8. IN THIS REGARD, IT IS SEEN THAT THE ISSUE IS GO VERNED BY SECTION 282 OF THE IT ACT, AS PER WHICH, A NOTICE UNDER THE AC T MAY BE SERVED ON THE PERSON NAMED THEREIN, EITHER BY POST, OR AS IF IT WERE A SUMMON ISSUED BY COURT UNDER THE CODE OF CIVIL PROC EDURE, 1908. ITA NO.694/ASR/2014 ASSESSMENT YEAR: 2004-05 7 NOW ORDER V, C.P.C. GOVERNS THE SERVICE OF SUMMONS ISSUED BY A COURT. AS PER RULE 12 OF ORDER V OF THE C.P.C, WHER EVER IT IS PRACTICABLE, SERVICE SHALL BE MADE ON THE DEFENDANT IN PERSON, UNLESS HE HAS AN AGENT EMPOWERED TO ACCEPT SERVICE, IN WHICH CASE, SERVICE ON SUCH AGENT SHALL BE SUFFICIENT. 9. IN ACCORDANCE WITH RULES 13 AND 14 OF ORDER V OF THE C.P.C, IT IS ONLY IF A SUMMONS IS ACCEPTED BY A PERSON WHO IS AUTHORIZED TO DO SO, THAT THE DEFENDANT CAN BE SAID TO HAVE RECEI VED THE SUMMONS, OR THAT SERVICE IS GOOD SERVICE. 16. IN THE PRESENT CASE, SERVICE OF NOTICE U/S 148 OF THE ACT, IS STATED TO HAVE BEEN EFFECTED ON ONE SH. CHHOTE LAL. THE A SSESSEE HAS ALL THROUGH MAINTAINED THAT THE SAID SH. CHHOTE LAL IS NOT HIS AGENT AND IS A PERSON AUTHORIZED BY THE ASSESSEE TO RECEIVE SUCH N OTICE. THE AO DID NOT DECIDE THIS OBJECTION OF THE ASSESSEE AND WENT AHEA D TO PASS THE REASSESSMENT ORDER. THE LD. CIT(A) OBSERVED THAT SH . CHHOTE LAL APPEARS TO BE THE REPRESENTATIVE OF THE ASSESSEE. SO, THE LD. CIT(A) IS ALSO NOT SURE ABOUT CHHOTE LAL BEING THE ASSESSEES REPRESEN TATIVE. STILL, HE HELD THE AOS ASSUMPTION OF JURISDICTION FOR REASSESSMEN T TO BE VALID, HOLDING, WITHOUT ANY BASIS, THAT NOTICE U/S 148 WA S SERVED ON THE REPRESENTATIVE OF THE ASSESSEE. 17. FROM THE ABOVE, IT IS CLEARLY EVIDENT THAT THE NOTICE U/S 148 WAS NOT SERVED ON A PERSON AUTHORIZED BY THE ASSESSEE T O ACCEPT IT. THUS, THE SPECIFIC REQUIREMENT OF ORDER V, RULES 13 & 14 OF T HE CPC HAVE NOT BEEN MET AND THE SERVICE OF THE NOTICE U/S 148 OF THE ACT IS NOT A VALID SERVICE IN ACCORDANCE WITH SECTION 282 OF THE ACT. ITA NO.694/ASR/2014 ASSESSMENT YEAR: 2004-05 8 18. IN THIS REGARD, IN CIT VS. RAJESH KUMAR, 311 ITR 235 (DELHI), IT HAS BEEN OBSERVED AS FOLLOWS: A NOTICE WAS SENT TO THE ASSESSEE U/S 148 OF THE INCOME-TAX ACT, 1961, ON THE GROUND THAT THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. HOWEVER, THE ASSESSEE CONTENDED THAT HE HAD NOT R ECEIVED ANY SUCH NOTICE AND THAT IT WAS ONLY WHEN HE RECEIVED A NOTICE UNDER SECTIONS 142(1) AND 143(2) OF THE ACT THAT HE CAME TO KNOW THAT A NOTICE U/S 148 HAD BEEN ISSUED TO HIM. THE ASSESSEE FILED A RETURN UNDER PROTEST. THE TRIBUNAL HELD ON THE ISSUES WHE THER THE NOTICE UNDER SECTION 148 OF THE ACT WAS ACTUALLY RECEIVED BY THE ASSESSEE WHEN IT WAS SENT THROUGH THE PROCESS SERVER AND ALS O WHETHER THE NOTICE WAS ACTUALLY RECEIVED BY THE ASSESSEE WHEN I T WAS SENT THROUGH SPEED POST IN THE NEGATIVE. ON APPEAL BY T HE REVENUE: HELD, DISMISSING THE APPEAL, (I) THAT THERE WAS NOT HING TO SUGGEST THAT L WAS IN ANY MANNER AUTHORIZED TO RECEIVE ANY SUMMONS ON BEHALF OF THE ASSESSEE. IT WAS NEVER THE CASE OF TH E REVENUE THAT L WAS AUTHORIZED TO ACCEPT ANY NOTICE ON BEHALF OF T HE ASSESSEE OR WAS AN AGENT OF THE ASSESSEE WHO WAS ENTITLED TO RE CEIVE THE NOTICE UNDER SECTION 148 OF THE ACT. IT COULD NOT BE HELD THAT RECEIPT OF THE NOTICE BY L AMOUNTED TO SERVICE OF THE NOTICE ON TH E ASSESSEE. 19. IN GURCHARAN SINGH (SUPRA) ALSO, THE AMRITSA R BENCH OF THE TRIBUNAL FOLLOWED THIS LEGAL POSITION. 20. NO DECISION TO THE CONTRARY HAS BEEN BROUGHT TO MY NOTICE. 21. FOR THE ABOVE, THE ASSESSEES GRIEVANCE BY WAY OF GROUND NO.2 IS JUSTIFIED AND IS ACCEPTED AS SUCH. ACCORDINGLY, I H OLD THAT NO NOTICE U/S 148 HAS BEEN PROVED AS SERVED ON THE ASSESSEE. AS SUCH, THE REOPENING PROCEEDINGS ARE BAD IN LAW. CONSEQUENTLY, THE ASSE SSMENT ORDER PASSED IN PURSUANCE OF SUCH PROCEEDINGS IS ALSO INVALID. T HEREFORE, THE SAME IS CANCELLED. ITA NO.694/ASR/2014 ASSESSMENT YEAR: 2004-05 9 22. NOTHING ELSE SURVIVES FOR ADJUDICATION AND SO REMAINING GROUNDS ARE NOT REQUIRED TO BE GONE INTO. 23. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH NOVE MBER, 2015. SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 18/11/2015 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. ASHOK INDUSTRIAL CORPORATION, GORAYA. 2. THE ITO, WARD-3, PHAGWARA. 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR. 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.