LATE PRABHAKAR S. MALGAONKAR, MUMBAI V. ITO 19(3)(3), MUMBAI

ITA 7324/MUM/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4881 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 13-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKEYAN
• Keywords: Assessment record
• Section: 147; 148; 144; 2; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.7324/M/2016 ASSESSMENT YEAR: 2006-07 LATE SHRI PRABHAKAR S. MALGAONKAR, (THROUGH LEGAL HEIR MRS. PRIYANKA MONGA), B-801, NG GARDEN, INSIDE GAURAV GARDEN, KANDIVALI (WEST), MUMBAI 400 017 PAN: AAEPM8617R VS. ITO 19(3)(3), MATRU MANDIR, MUMBAI (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI ADITYA AJGAONKAR, A.R. REVENUE BY : SHRI ABI RAMA KARTIKEYAN, D.R. DATE OF HEARING : 08.01.2019 DATE OF PRONOUNCEMENT : 11.02.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 02.09.2016 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE LATE SHRI PRABHAKAR S MALGAONKAR DI ED ON 28.07.2007 AND THE ASSESSMENT WAS MADE ON THE LEGAL HEIR SMT PRIYANKA MONGA AS LEGAL HEIR. THE ASSESSEE HAS RAIS ED GROUNDS IN THE MEMORANDUM OF APPEALS BESIDE RAISING ADDITIO NAL GROUNDS TWO TIMES.THE ASSESSEE HAS RAISED JURISDICT IONAL ISSUE IN THE FIRST GROUND OF APPEAL AS UNDER:- ITA NO.7324/M/2016 LATE SHRI PRABHAKAR S. MALGAONKAR 2 LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT NOTICE U/S 148 OF THE ACT WAS NOT APPROPRIATELY SERVED ON THE LEGAL HEIRS OF THE ASSESSEE AND THEREFORE ASSESSMENT FRAMED U/S 144 R.W.S. 147 OF THE ACT WAS BAD IN LAW. 3. THE FACTS IN BRIEF ARE THAT ASSESSEE EXPIRED IN 2007 SO ASSESSMENT PROCEEDINGS WERE INITIATED AND COMPLETED ON THE LEGAL HEIR SMT PRIYANKA MONGA. THE ASSESSEES MAIN ALLEGATION IS THAT THE NOTICE ISSUED U/S 148 OF THE ACT WAS NOT S ERVED ON THE LEGAL HEIR WHEREAS THE REVENUE CLAIMS THAT IT WAS S ERVED ON THE LAST KNOWN ADDRESS AS THE AO WAS NOT KNOWING THE CH ANGED ADDRESS. EVEN IN THE REMAND REPORT THE AO STATED TH AT THE NOTICE ISSUED U/S 148 WAS ISSUED IN 21.3.2013 AND S ERVED ON 23.32013 WHICH WAS NOT RESPONDED BY THE ASSESSEE WH EREAS THE ASSESSEE CLAIMS THAT THERE WAS NO PROPER SERVICE OF THE SAID NOTICE. THE AO ALSO OBSERVED IN THE REMAND REPORT T HAT THE NOTICES U/S 142(1) WERE SERVED ON SMT PRIYANKA MONG A ON 15.7.2013 AND 31.1.2014. ACCORDING TO THE ASSESSEE, THE AO COULD NOT PROVE TO WHOM THE NOTICE ISSUED U/S 148 O F THE ACT WAS ISSUED. 4. IN ORDER TO RESOLVE THE ISSUE OF SERVICE OF NOTI CE, THE BENCH DIRECTED THE LD DR TO PRODUCE THE ASSESSMENT RECORD S ON 13.4.2018. AGAIN ON 13.8.2018, 18.9.2018 AND 18.10 .2018, THE LD. D.R. WAS DIRECTED TO PRODUCE THE ASSESSMENT REC ORDS. ON 8.1.2019, THE ASSESSMENT RECORDS WAS PRODUCED BY TH E LD DR AND EXAMINED BY THE BENCH. UPON PERUSAL OF THE ASSE SSMENT RECORDS IT WAS FOUND THAT THERE IS NO EVIDENCE OF S ERVICE OF NOTICE ON THE ASSESSEE AND ON WHOM IT WAS SERVED. WITH THI S BACKGROUND WE WOULD ADJUDICATE THE APPEAL OF THE AS SESSEE. ITA NO.7324/M/2016 LATE SHRI PRABHAKAR S. MALGAONKAR 3 5. THE ISSUE WAS ALSO RAISED BEFORE THE LD CIT(A) Q UA THE NON SERVICE OF NOTICE U/S 148 OF THE ACT. THE LD CIT(A ) TREATED THE SERVICE OF NOTICE VALID BY REASONING THAT THE ASSES SING OFFICER TRIED HIS LEVEL BEST TO SERVE THE NOTICE AND NOTICE U/S 148 DATED 21.03.2013 WAS SERVED ON 23.3.2013 BUT NOTED IN THE APPELLATE ORDER ITSELF THAT ON WHOM SERVED IS NOT KNOWN. LD C IT(A) ALSO NOTED THAT IT IS THE DUTY OF THE ASSESSEE OR HIS LE GAL HEIR TO INFORM THE DEPARTMENT THE CORRECT ADDRESS WHICH WAS NOT DONE. SO HE JUSTIFIED THE SERVICE AS VALID SERVICE AND TH US DISMISSED THE GROUND RAISED BY THE ASSESSEE. 6. AFTER HEARING THE COUNSEL OF THE ASSESSEE AND LD DR, WE OBSERVE THAT THERE IS NO DISPUTE THAT ON WHOM THE N OTICE ISSUED U/S 148 SERVED IS NOT KNOWN WHICH IS QUITE APPARENT FROM THE ASSESSMENT RECORDS AND THIS AMOUNTS TO NON SERVICE OF NOTICE WHICH GOES TO THE ROOTS OF THE AO JURISDICTION AND PROCEEDINGS U/S 148 OF THE ACT AND CONSEQUENT ASSESSMENT CAN NO T BE SUSTAINED AS THERE IS NO VALID ASSUMPTION OF JURISD ICTION BY THE AO. THE COUNSEL OF THE ASSESSEE RELIED UPON A SER IES OF DECISIONS TO CEMENT HIS ARGUMENTS THAT IN CASE OF N ON SERVICE OF NOTICE U/S 148, THE ENTIRE PROCEEDINGS ARE INVALID AND BAD IN LAW. IN THE CASE OF SHRI NATH SURESH CHAND RAM NARE SH VS CIT (2006)280ITR396, THE PROCEEDINGS U/S 148 WERE HELD TO BE INVALID AND NULL AND VOID IN ABSENCE OF PROPER SERV ICE OF NOTICE ISSUED U/S 148 OF THE ACT. THE KERALA HIGH COURT IN P.N. SASIKUMAR AND ORS. V. CIT, (1988) 170 ITR 80 (KER) HAS HELD THAT THE ISSUE OF A NOTICE UNDER SECTION 148 OF THE IT ACT, 1961, IS A CONDITION PRECEDENT TO THE VALIDITY OF ANY ASS ESSMENT ORDER TO BE PASSED UNDER SECTION 147 OF THE ACT. IT IS AL SO SETTLED LAW THAT IF NO SUCH NOTICE IS ISSUED OR IF THE NOTICE I S INVALID OR IS NOT ITA NO.7324/M/2016 LATE SHRI PRABHAKAR S. MALGAONKAR 4 IN ACCORDANCE WITH LAW OR IS NOT SERVED ON THE PROP ER PERSON IN ACCORDANCE WITH LAW, THE ASSESSMENT WOULD BE ILLEGA L AND WITHOUT JURISDICTION. THE FACTS OF THE ASSESSEE CAS E ARE SQUARELY COVERED BY THE RATIO LAID DOWN BY THE VARIOUS HIGH COURTS AND OTHER JUDICIAL FORUMS. WE ARE, THEREFORE, INCLINED TO QUASH THE ASSESSMENT PROCEEDINGS INITIATED BY THE AO U/S 148 AND ALSO THE CONSEQUENT ASSESSMENT ORDER. THE GROUND NO 1 I S ALLOWED. 7. SINCE WE HAVE ALLOWED THE APPEAL OF THE ASSESSEE ON LEGAL GROUND, THE OTHER GROUNDS AND ADDITIONAL GROUNDS RA ISED ON MERITS NEED NOT BE ADJUDICATED. 8. IN RESULT THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.02.2019. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 11.02.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.