Malkiat Singh, Sangrur V. ITO, Sangrur

ITA 780/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8294 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 13-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.780 /CHD/2015 ( ASSESSMENT YEAR : 2009-10) MALKIAT SINGH PROP. M/S PUNJAB VS. THE INCOME TAX OFFICER, OIL CARRIERS, OPP. IOC, WARD-1, SANGRUR, JIND-DELHI ROAD, NOW JURISDICTION WITH SANGRUR. INCOME TAX OFFICER, WARD-1, BARNALA.. PAN: AUDPS2251E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 20.01.2016 DATE OF PRONOUNCEMENT : 28.03.2016 O R D E R PER RANO JAIN, A.M . : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCO ME TAX (APPEALS), PATIALA DATED 19.08.2015, PASSED UNDER SECTION 250(6) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT). 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER ISSUED VARIOUS NOTICES TO THE ASSESSEE TO EXPLAIN CERTAIN CASH DEPOSITS IN HIS BA NK 2 ACCOUNT. HOWEVER, SINCE NOBODY APPEARED ON ANY OF THE OCCASIONS BEFORE THE ASSESSING OFFICER, THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 144 OF THE ACT AND AN ADDITION OF RS.31,83,784/- WAS MADE ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNT. 3. BEFORE THE LEARNED CIT (APPEALS), IT WAS SUBMITTED THAT SINCE NO NOTICE WAS SERVED ON THE ASSESSEE, HE COULD NOT ATTEND THE PROCEEDINGS BEFOR E THE ASSESSING OFFICER. IT WAS ALSO STATED THAT HE CAME TO KNOW ABOUT THE ASSESSMENT ORDER ONLY WHEN PENALTY NOTICE DATED 18.6.2012 UNDER SECTION 271(1)(C) OF T HE ACT WAS SERVED UPON HIM AS ON 22.6.2012. IT WAS FURTHE R SUBMITTED THAT LATER ON INSPECTION OF FILE, IT CAME TO THE NOTICE OF THE ASSESSEE THAT ALL THE NOTICES ISSUED BY THE ASSESSING OFFICER WERE ADDRESSED TO SOME SANGRUR ADDRESS, WHILE ASSESSEES ADDRESS IS THAT OF BARNAL A. IT WAS CONTENDED BEFORE THE LEARNED CIT (APPEALS) THAT THE ASSESSEE HAS REGULARLY BEEN FILING HIS RETURN OF IN COME FROM BARNALA ADDRESS, HE HAS BEEN REGULARLY ASSESSE D AT BARNALA AND VARIOUS CORRESPONDENCES ON EARLIER OCCA SIONS, WITH THE DEPARTMENT HAD BEEN AT BARNALA ADDRESS. SINCE THE ASSESSEE HAS NO CONNECTION WITH THE SANGRUR ADD RESS, IT WAS STATED THAT THE ASSESSMENT HAS BEEN FRAMED WITHOUT PROPERLY SERVING THE STATUTORY NOTICES, THE REFORE, SUCH AN ASSESSMENT IS ILLEGAL. IT WAS ALSO SUBMITT ED THAT OTHERWISE ALSO, ASSESSMENT HAVING BEEN FRAMED BY AN 3 OFFICER NOT HAVING JURISDICTION OVER THE ASSESSEE I S ILLEGAL. ON MERITS OF THE CASE, IT WAS ARGUED THAT ALL CASH DEPOSITS IN THE BANK ARE COMING OUT OF THE CASH BOOK MAINTAI NED BY THE ASSESSEE, WHEREBY SUFFICIENT CASH WAS AVAILA BLE TO HIM ON THE VARIOUS DATES OF DEPOSIT. COPY OF CASH BOOK WAS FILED AS ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES. IT WAS ALSO POINTED OUT TO THE L EARNED CIT (APPEALS) THAT THE ASSESSING OFFICER HAS MADE A DDITION OF THE SAME AMOUNT OF RS.15,91,892/- TWICE. 4. THE LEARNED CIT (APPEALS) FORWARDED THE SUBMISSIONS OF THE ASSESSEE TO THE ASSESSING OFFICE R FOR HIS COMMENTS. THE ASSESSING OFFICER VIDE HIS LETTE R NO.1368 DATED 2.12.2013 ADMITTED THAT ON MERITS THE ADDITION HAS BEEN MADE TWICE INADVERTENTLY BY HIM. AS REGARDS THE JURISDICTION ISSUE, IT WAS STATED BY TH E ASSESSING OFFICER THAT THE ASSESSEE HAVING SOME BUS INESS IN SANGRUR AND SINCE HIS PAN LIED IN SANGRUR AND SANGRUR AND BARANALA FALLING UNDER THE SAME RANGE, THE JURISDICTION ASSUMED BY THE SANGRUR ASSESSING OFFIC ER IS CORRECT. IN HIS REJOINDER TO THE REMAND REPORT BESI DES REITERATING HIS EARLIER SUBMISSION, THE ASSESSEE ST ATED THAT PAN LYING IN SANGRUR DOES NOT GIVE THE ASSESSI NG OFFICER, SANGRUR THE CORRECT JURISDICTION. EVEN IF BARNALA AND SANGRUR LIE IN THE SAME RANGE, JURISDICTION CAN BE TRANSFERRED FROM ONE OFFICER TO ANOTHER BY THE RANG E HEAD ONLY. 4 5. THE ASSESSING OFFICER SUBMITTED ANOTHER REMAND REPORT DATED 26.12.2013 TO THE CIT (APPEALS). ON T HE ISSUE OF ADDRESS OF THE ASSESSEE, HE CLARIFIED THAT ON A CONFIRMATION LETTER RECEIVED FOR VERIFICATION OF TD S FROM IOC CHEMICAL & PHARMACEUTICAL LTD., THE ADDRESS OF THE ASSESSEE MENTIONED WAS THAT OF SANGRUR. THAT IS WH Y THE NOTICES WERE SENT TO SANGRUR ADDRESS. WITH REGARD TO SERVICE OF NOTICE, IT WAS STATED IN THE REMAND REPO RT THAT SOME OF THE NOTICES AT SANGRUR WERE RECEIVED BY A P ERSON NAMED RAJU, WHO SEEMS TO BE AN EMPLOYEE OF THE ASSE SSEE. AS REGARDS ASSESSEES SUBMISSION THAT HE WAS ALL AL ONG FILING HIS RETURN IN ITO, BARNALA AND EVEN REFUNDS WERE ISSUED BY ITO, BARNALA AT HIS BARNALA ADDRESS, IT W AS STATED BY THE ASSESSING OFFICER THAT THE ADDRESS WA S DOWNLOADED FROM THE SYSTEM BY GENERATING NOTICE UND ER SECTION 143 OF THE ACT, WHICH WAS RELEVANT TO SANGR UR. IT WAS AGAIN REITERATED THAT SINCE HIS ADDRESS IN THE CONFIRMATION LETTER FROM IOC IS THAT OF SANGRUR, HE HAS RIGHTLY ASSUMED JURISDICTION. 6. IN HIS SECOND REJOINDER, THE ASSESSEE APART FRO M HIS EARLIER SUBMISSIONS ENCLOSED A COPY OF THE VERI FICATION LETTER DATED 14.11.2010 ISSUED BY IOC, CHEMICAL & PHARMACEUTICALS LTD., WHICH HE HAD OBTAINED FROM TH E INCOME TAX DEPARTMENT AS CERTIFIED COPY. IT WAS ST ATED THAT THE SAME RELATE TO SOME OTHER ASSESSEE AND THE LETTER ISSUED IN RELATION TO THE ASSESSEE CLEARLY MENTION HIS ADDRESS OF BARNALA. 5 7. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND REMAND REPORTS, THE LEARNED CIT (APPEA LS) HELD THAT THE NOTICES SENT WERE RECEIVED BY SOME PE RSON NAMED RAJU. HOWEVER, HE DID NOT GIVE ANY SPECIFIC FINDING IN THIS REGARD. ON THE MERITS OF THE CASE, AS SUGG ESTED BY THE ASSESSING OFFICER HIMSELF IN HIS REMAND REPORT, HE DELETED THE ADDITION TO THE EXTENT OF RS.15,91,892/ -, AS IT WAS A DOUBLE ADDITION. HOWEVER, FOR THE REMAINING ADDITION, HE PREFERRED NOT TO ADMIT ADDITIONAL EVID ENCE SUBMITTED BY THE ASSESSEE IN THE FORM OF CASH BOOK ETC. AND UPHELD THE ADDITION TO THE EXTENT OF RS.15,91,8 92/-. 8. AGGRIEVED, THE ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL, RAISING FOLLOWING GROUNDS OF A PPEAL : 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEA LS) HAS ERRED IN LAW BY CONFIRMING THE ACTION OF THE ASSESSING OFFICER BY ACCEPTING THE ORDER PASSED U/S 144 OF THE INCOME TAX ACT, 1961. 2. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEA LS) HAS ERRED IN LAW BY CONFIRMING THE ACTION OF THE ASSESSING OFFICER BY PASSING THE ORDER WITHOUT JURISDICTION, WHEREAS THE ASSESSING OFFICER HAS NO JURISDICTION OVER THE CASE TO PASS THE ASSESSMENT ORDER . 3. THAT THE WORTHY CIT (A) HAS ERRED IN HOLDING THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF RS.1591892/- AS THE SAME WAS WRONGLY ADDED TO THE RETURNED INCOME OF THE APPELLANT. 4. THAT THE WORTHY CIT(A) HAS ERRED IN LAW BY HOLDING THE ACTION OF ASSESSING OFFICER OF MAKING AN ADDITION OF RS.1591892/- AS NO PROPER OPPORTUNITY 6 WAS GIVEN AND THE SAME WAS ADDED INTO RETURNED INCOME OF THE APPELLANT. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND A NY GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD O R DISPOSED OFF. 9. THE LEARNED COUNSEL FOR THE ASSESSEE FIRST MADE SUBMISSION WITH REGARD TO ISSUE AND SERVICE OF VARI OUS NOTICES. OUR ATTENTION WAS INVITED TO PAPER BOOK P AGES 6, 128 AND 130 TO SHOW THAT THE RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10,, 2007-08 AND 2006-07 RESPECTIVELY WERE FILED BEFORE THE INCOME TAX OFFIC ER, BARNALA AND THE ADDRESS MENTIONED THEREIN WAS THAT OF BARNALA. FURTHER, IT WAS STATED AT BAR THAT THE RE TURN FOR ASSESSMENT YEAR 2008-09 WAS ALSO FILED BEFORE THE I NCOME TAX OFFICER, BARNALA GIVING THE ADDRESS OF BARNALA ONLY. AT PAPER BOOK PAGES 126 AND 127 ARE THE COPIES OF R EFUND VOUCHER ISSUED BY THE DEPARTMENT FOR ASSESSMENT YEA R 2009-10, DATED 22.2.2010 AND ASSESSMENT YEAR 2010-1 1, WHEREBY THE ADDRESS STATED IS THAT OF BARNAL ONLY. THE MANUAL REFUND FOR ASSESSMENT YEAR 2007-08 DATED 14.11.2008 WAS PLACED AT PAPER BOOK PAGE 129, WHERE ALSO, THE ADDRESS STATED IS THAT OF BARNAALA. THES E PAPERS WERE SHOWN TO US TO EMPHASIZE THE FACT THAT THE CORRECT ADDRESS OF THE ASSESSEE WAS THAT OF BARNALA AND EVEN THE JURISDICTION TO ASSESS THE ASSESSEE WAS WI TH THE I.T.O., BARNALA. IT WAS STATED THAT NO NOTICE WAS EVER RECEIVED TO THE ASSESSEE. IT WAS ONLY AFTER THE IN SPECTION OF FILE ON RECEIVING THE NOTICE UNDER SECTION 271(1 )(C) OF 7 THE ACT, AT BARNALA ADDRESS, THE ASSESSEE CAME TO K NOW ABOUT THE ASSESSMENT HAVING BEEN DONE. FURTHER, WI TH REGARD TO THE ASSESSING OFFICERS CONTENTION THAT F EW OF THE NOTICES GOT SERVED TO A PERSON NAMED RAJU WHO MAY BE AN EMPLOYEE OF THE ASSESSEE, IT WAS STATED THAT THE ASSESSEE DOES NOT HAVE ANY OFFICE IN SANGRUR, THERE FORE, THE QUESTION OF HAVING AN EMPLOYEE THERE DOES NOT A RISE. IT WAS ALSO ARGUED THAT IT IS ONLY A PRESUMPTION TH AT RAJU OR RAM SINGH APPEAR TO BE AN EMPLOYEE OF THE ASSESS EE, WHICH IS FACTUALLY WRONG. IT WAS AGAIN REITERATED THAT THE ASSESSMENT ORDER HAS BEEN PASSED BY THE ITO, SANGRU R, WRONGLY ASSUMING THE JURISDICTION AS THE CORRECT AD DRESS OF THE ASSESSEE IS THAT OF BARNALA AND IF EVEN IN T HE LETTER THE ASSESSING OFFICER IS REFERRING TO FROM WHERE HE HAS PICKED UP THE SANGRUR ADDRESS, DOES NOT RELATE TO T HE ASSESSEE, THE LETTER RELATED TO THE ASSESSEE MENTIO N HIS ADDRESS OF BARNALA ONLY. REGARDING ASSESSING OFFIC ERS CONTENTION THAT PAN WAS LYING AT SANGRUR, IT WAS SUBMITTED THAT THE ASSESSEE HAS NEVER CHANGED HIS ADDRESS FROM BARNALA. THE PAN LYING AT SAME ADDRES S DOES NOT GIVEN JURISDICTION TO AN OFFICER. ON THE MERITS OF THE CASE, IT WAS STATED THAT THE ASSESSEES BOOKS A RE AUDITED BUT DUE TO NON-SERVICE OF NOTICES, NO EVID ENCE COULD BE FILED BEFORE THE ASSESSING OFFICER. THERE FORE, THE LEARNED CIT (APPEALS) WAS NOT RIGHT IN NOT ADMITTIN G THE ADDITIONAL EVIDENCE. 8 10. THE LEARNED D.R. RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 11. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. 12. IN THE PRESENT CASE, THERE CANNOT BE ANY DISPU TE TO THE FACT THAT ALL THE NOTICES ISSUED BY THE ASSE SSING OFFICER WERE ADDRESSED TO THE SANGRUR ADDRESS. EVE N THE LEARNED CIT (APPEALS) HAS NOT DISPUTED THE SAME AND THE ASSESSING OFFICER IN HIS REMAND REPORT, ALSO ADMITT ED THE SAME. THE LEARNED COUNSEL FOR THE ASSESSEE HAS AMP LY DEMONSTRATED BEFORE US THAT THE CORRECT ADDRESS OF THE ASSESSEE WAS THAT OF BARNALA AND NOT OF SANGRUR. E VEN IN THE REMAND REPORT, THE ASSESSING OFFICER HIMSELF HA S STATED THE FACT THAT HE HAS TAKEN THIS SANGRUR ADDR ESS FROM A LETTER FILED BY A THIRD PARTY. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO BEEN ABLE TO SHOW THAT EV EN THE BASIS OF SANGRUR ADDRESS, WHICH THE ASSESSING OFFIC ER SAYS HE HAS TAKEN THE ADDRESS FROM, IS NOT CORRECT. WE OBSERVE THAT IN THAT LETTER ALSO ADDRESS MENTIONED FOR ASSESSEE IS OF BARNALA AND THE LETTER HAVING ADDRES S OF SANGRUR RELATES TO SOME OTHER PERSON. 13. IN VIEW OF THE FACTS NARRATED HEREINABOVE, WE FIND OURSELVES IN AGREEMENT WITH THE CONTENTION OF THE ASSESSEE THAT THE JURISDICTION OVER THE ASSESSEE WA S WITH THE ITO, BARNALA AND THE ITO, SANGRUR HAS WRONGLY 9 ASSUMED JURISDICTION. ALL ALONG THE ASSESSEE HAS B EEN FILING RETURN WITH ITO, BARNALA. WE OBSERVE THAT THE LETTER ON THE BASIS OF WHICH THE ASSESSING OFFICER, SANGRUR HAS ASSUMED JURISDICTION IS DATED 18.10.2010, WHILE WE SEE THAT THE ASSESSEE HAS BEEN FILING RETURN OF INC OME WITH ITO, BARNALA DATED 22.2.2011 AND 21.1.2011 AND THE REFUND ORDERS ARE BEING ISSUED AT THE ASSESSEES AD DRESS AT BARNALA AS ON 9.10.2007 AND 14.11.2008. THEREFO RE, IT IS ALSO CLEAR THAT EVEN BEFORE AND AFTER THE DATE O F THIS LETTER ALSO, ITO, BARNALA WAS HAVING JURISDICTION O VER THE ASSESSEE. EVEN OTHERWISE, THE ADDRESS TAKEN FROM T HIS LETTER IS ALSO WRONG. 14. THE ASSUMPTION OF JURISDICTION IS AN IMPORTANT ISSUE, WHICH GOES TO THE ROOT OF ASSESSMENT PROCEED INGS. JUST ON THE BASIS OF SOME LETTER FILED BY SOME THIR D PARTY MENTIONING SOME ADDRESS OF ASSESSEE, AN OFFICER CAN NOT ASSUME JURISDICTION. SECTION 120 OF THE ACT DEFINE S THE JURISDICTION OF INCOME TAX AUTHORITIES. AS PER SUB -SECTION (3) OF SECTION 120 OF THE ACT, THE CRITERIA FOR ALL OCATING JURISDICTION IS PROVIDED TO BE TERRITORY, PERSON, I NCOME OR CASE. SECTION 127 OF THE ACT DEFINES THE POWER TO TRANSFER CASES. SUB-SECTION (1) TO SECTION 127 OF THE ACT G IVES POWER TO THE OFFICER OF THE RANK OF COMMISSIONER, C HIEF COMMISSIONER AND PRINCIPAL COMMISSIONER, ETC. TO TRANSFER CASE FROM ONE ASSESSING OFFICER TO ANOTHER ASSESSING OFFICER, BOTH BEING SUBORDINATE TO HIM. THERE IS NO ORDER, NOTHING ON RECORD TO SHOW THAT THE 10 JURISDICTION WAS TRANSFERRED BY ANY SUCH OFFICER. NEITHER THE CIT (APPEALS) NOR THE ASSESSING OFFICER IN HIS MULTIPLE REMAND REPORTS HAD MADE ANY REFERENCE TO ANY SUCH ORDER. THEREFORE, WE ARE INCLINED TO HOLD THAT THE ASSESSMENT ORDER PASSED BY THE ITO, SANGRUR IS WITH OUT JURISDICTION AND THEREFORE, ILLEGAL. WE HEREBY QUA SH THE ORDER PASSED BY THE ITO, SANGRUR. 15. SINCE WE HAVE ALREADY HELD THE ORDER OF THE ASSESSING OFFICER AS ILLEGAL, WE DO NOT FIND ANY NE ED TO ADJUDICATE OTHER ISSUES RAISED BY THE ASSESSEE IN H IS GROUNDS OF APPEAL. 16. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF MARCH, 2016. SD/- SD/- (BHAVENESH SIANI) (RANO JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH MARCH, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 11