SHRI CHARAN SINGH , ALWAR V. INCOME TAX OFFICER, WARD, BHIWADI

ITA 906/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6019 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P MEENA
• Assessee Lawyers: O P BHATEJA
• Keywords: Period of limitation; Tangible material; Assessment record; Reassessment proceedings
• Section: 142(1); 234B; 147; 148; 6

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR B ENCHE-B, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 906/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2009-10 CHARAN SINGH, VILLAGE GANDHULA, POST- GAWALDHA, TEHSIL TIJARA, ALWAR, RAJASTHAN CUKE VS. ITO WARD- BHIWADI LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BXZPS3225A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI O. P. BHATEJA JKTLO DH VKSJ LS @ REVENUE BY : SHRI P. P. MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 23/10/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 22/01/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)- 22, ALWAR DATED 08.06.2018 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A) HAS GROSSLY ERRED ON THE FACTS A ND IN LAW IN PRESUMING THE SERVICE OF NOTICE U/S 148 ON THE BASI S OF DECISION OF HONBLE DELHI HIGH COURT, IN THE CASE OF CIT V. YAM U INDUSTRIES LTD.,(2008) 167 TAXMAN, 67. THE SAID CASE IS NOT AT ALL APPLICABLE TO THE CASE OF THE ASSESSEE. IN THE CASE OF THE ASSESS EE NOTICE WAS NEVER SERVED EVEN BY AFFIXTURE AND THE NOTICE U/S 148 SEN T THROUGH SPEED POST RECEIVED BACK BY THE AO WITH THE POSTAL REMARK S- UKT NUMBER PAR ISS NAAM KA KOI NAHI REHTA HAI, ATAH WAPAS. SD. DATED ITA NO. 906/JP/2018 CHARAN SINGH, ALWAR VS. ITO, BHIWADI 2 31.03.2016, WHICH IS PLACED ON FILE. IN ABSENCE OF SERVICE, NOTICE ISSUED U/S 148 DESERVES TO BE QUASHED. 2. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF INITIATION OF PROCEEDINGS U/S 148 O F THE ACT AND ASSESSMENT BASED ON THE BASIS OF SUCH NOTICE IGNORI NG THE FACT THAT THE NOTICE U/S 148 WAS ISSUED BY THE AO. WITHOUT AP PLICATION OF MIND, WITHOUT ANY TANGIBLE MATERIAL OR VALID REASONS, SIM PLY ON THE BASIS OF HIS FALLACIOUS ASSUMPTIONS, CONJENCTURRES AND SURMI SES. THE PROCEEDINGS SO INITIATED WERE ILLEGAL, BAD IN LAW A ND VOID-AB-INITIO. 3. THE LD. CIT(A) HAS GROSSLY ERRED AND FAILED TO A PPRECIATE THAT THE LD. PR. CIT, ALWAR DID NOT FULFILL THE MANDATE OF PROVISIONS OF SEC 151(1) OF THE ACT BY GIVING MECHANICAL APPROVAL BY SIMPLY WRITING YES, I AGREE. NOTICE ISSUED U/S 148 ON THE BASIS O F SUCH APPROVAL IS BAD IN LAW AND DESERVES TO BE QUASHED. THE LD. CIT( A) HAS ALSO IGNORED THE CASE LAWS CITED BEFORE HIM, IN THIS REG ARD. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) H AS ERRED IN CONFIRMING NET PROFIT RATE OF 8 PERCENT APPLIED BY THE AO WITHOUT GIVING ANY REASONS OR COMPARABLE CASES. 5. THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING T HE INTEREST CHARGED U/S 234A AND 234B BY THE AO, IGNORING THE S UBMISSIONS MADE BEFORE HIM AND CASE LAWS CITED IN THE WRITTEN SUBMI SSIONS FILED DURING THE APPELLATE PROCEEDINGS. 2. IN GROUND NO. 1, THE ASSESSEE HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN PRESUMING THE SERVICE OF NOTICE U/S 148 WH ERE AS THE FACT OF THE ITA NO. 906/JP/2018 CHARAN SINGH, ALWAR VS. ITO, BHIWADI 3 CASE IS THAT THE NOTICE U/S 148 SENT THROUGH SPEED POST WAS RECEIVED BACK BY THE ASSESSING OFFICER AND REMAIN UNDELIVERED, AN D THEREAFTER, THERE HAS BEEN NO EFFORT DONE BY THE ASSESSING OFFICER EVEN T O SERVE THE NOTICE BY AFFIXTURE. IT WAS SUBMITTED THAT THE SERVICE NOTIC E U/S 148 IS A JURISDICTIONAL REQUIREMENT THAT MUST BE MANDATORILY COMPLIED WITH AND IN THE ABSENCE OF THE SAME, THE PRESENT PROCEEDING NEEDS TO BE QUASHE D. 3. IT WAS SUBMITTED THAT IN THE INSTANT CASE, THE N OTICE U/S 148 WAS ISSUED ON 29.03.2016 SENT THROUGH SPEED POST BY THE AO ON 30.03.2016 AT THE ADDRESS PLOT NO. 196, SECTOR-9, UIT COLONY, BHI WADI WHICH IS THE ADDRESS OF ONE SH. BHARDWAJ THROUGH WHOM THE ASSESSEE HAD A PPLIED FOR PAN, WAS RECEIVED BACK BY THE AO WITH THE POSTAL REMARKS UK T NUMBER PAR ISS NAAM KA KOI NAHI REHTA HAI, ATAH VAPAS. SD. DATED, 31.03 .2016. IT WAS SUBMITTED THAT THE ENVELOPE RETURNED BY THE POSTAL AUTHORITIE S CONTAINING UN-SERVED NOTICE U/S. 148 IS AVAILABLE ON ASSESSMENT RECORDS, A COPY OF WHICH HAS BEEN OBTAINED BY THE ASSESSEE AND IS ENCLOSED AS PART OF PAPERBOOK. IT WAS FURTHER SUBMITTED THAT AS APPARENT FROM THE ASSESSM ENT RECORDS, THERE HAS BEEN NO EFFORT MADE BY THE AO TO SERVE THE SAID NOT ICE. IT IS APPARENT FROM THE ASSESSMENT RECORDS THAT THE SAID NOTICE WAS NEV ER SERVED UPON THE ASSESSEE OR ANY OF HIS AUTHORIZED AGENT OR EVEN THR OUGH AFFIXTURE. 4. IT WAS FURTHER SUBMITTED THAT THE CORRECT PERMAN ENT RESIDENTIAL ADDRESS OF THE ASSESSEE WAS AVAILABLE WITH THE DEPARTMENT F ROM THE VERY BEGINNING AT WHICH ADDRESS THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO AND NOTICE U/S. 142(1) WAS SENT THROUGH SPEED-POST ON 07.10.20 16. THEREFORE, NO ATTEMPT WAS MADE BY THE AO TO SERVE THE NOTICE U/S. 148 UPON THE ASSESSEE AT THE LAST KNOWN CORRECT ADDRESS. THE A.O. HAS ALS O NOT STATED ANYTHING ABOUT SERVICE OF THE NOTICE U/S 148 IN THE ASSESSME NT ORDER AND THE ORDER- SHEET MAINTAINED BY HIM. ITA NO. 906/JP/2018 CHARAN SINGH, ALWAR VS. ITO, BHIWADI 4 5. IT WAS SUBMITTED THAT IT IS AN ACCEPTED LEGAL PO SITION THAT SERVICE OF NOTICE U/S. 148 IS A JURISDICTIONAL REQUIREMENT THA T MUST BE MANDATORILY COMPLIED WITH. THIS IS NOT A PROCEDURAL REQUIREMENT . IN THIS REGARD, RELIANCE WAS PLACED ON THE DECISION OF HON'BLE DELHI HIGH CO URT IN THE CASE OF CIT V. CHETAN GUPTA (2015) 94 CCH 13. THE LD AR FURTHER P LACED RELIANCE ON THE DECISION OF HON'BLE RAJASTHAN HIGH COURT IN THE CAS E OF MRS. SUBHASHRI PANICKER V. CIT (D.B. INCOME TAX APPEAL NO. 202/201 5, DATED 24.10.2017) WHEREIN THE HONBLE HIGH COURT RELIED ON THE DECISI ON IN CASE OF CHETAN GUPTA (SUPRA) AND OTHERS, AND HAS ALLOWED THE APPEA L OF THE ASSESSEE ADMITTING NON-SERVICE OF NOTICE U/S. 148 OF THE ACT . IT WAS ACCORDINGLY SUBMITTED THAT THE NOTICE U/S. 1 48 MAY KINDLY BE HELD VOID-AB-INITIO FOR WANT OF SERVICE AND ASSESSMENT M AY KINDLY BE QUASHED. 6. PER CONTRA, THE LD. DR SUPPORTED THE ORDER OF TH E LOWER AUTHORITIES AND SUBMITTED THAT THE NOTICE U/S 148 HAS BEEN DULY ISS UED AND SERVED ON THE ASSESSEE AND THEREFORE, THERE IS NO IRREGULARITY IN ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER U/S 147 OF THE ACT. IN SUP PORT, RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT V. YAMU INDUSTRIES LTD.(2008) 167 TAXMAN, 67. FURTHER, HE S UPPORTED THE FINDINGS OF THE LD CIT(A) WHICH ARE REPRODUCED AS UNDER: 5.5 REGARDING THE APPELLANTS CLAIM OF NOT RECEIVI NG THE NOTICE U/S 148 OF THE ACT, I HAVE CONSIDERED THE JUDICIAL RULINGS BY HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. YAMU INDUSTRIES LTD [2008] 167, WHERE IT HAS BEEN HELD THAT NOTICE U/S 143(2) SENT BY REGISTERED POST AT C ORRECT ADDRESS OF ASSESSEE HAD NOT BEEN RECEIVED BACK UNSERVED WITHIN PERIOD OF 30 DAYS OF ITS ISSUANCE, THERE WAS A PRESUMPTION UNDER LAW THAT SA ID NOTICE HAD BEEN DULY SERVED UPON ASSESSEE WITHIN PERIOD OF LIMITATION. ITA NO. 906/JP/2018 CHARAN SINGH, ALWAR VS. ITO, BHIWADI 5 5.6 THEREFORE ON THE BASIS OF FACTUAL MATRIX OF THE CASE AND JUDICIAL RULINGS AS CITED ABOVE, THE ISSUANCE OF NOTICE U/S 148 OF T HE ACT IS HELD VALID AND ACCORDINGLY THE APPELLANTS GROUNDS OF APPEAL ON TH E ISSUES ARE DISMISSED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS A SETTLED LEGAL POSITION THAT BEFO RE ASSUMPTION OF JURISDICTION U/S 147, THE ISSUANCE OF NOTICE U/S 148 AND SERVICE OF SUCH NOTICE UPON THE ASSESSEE ARE JURISDICTIONAL REQUIREMENTS THAT MUST BE MANDATORILY COMPLIED WITH AND THESE ARE NOT MERE PROCEDURAL REQUIREMENT. ANY BREACH OF SUCH JURISDICTIONAL REQUIREMENT CANNOT BE READ AS TECHNI CAL BREACH WHICH CAN BE RECTIFIED BUT WILL RENDER THE WHOLE REASSESSMENT PR OCEEDINGS VOID AB-INITIO WHICH ARE LIABLE TO BE QUASHED. IN THE INSTANT CAS E, ON PERUSAL OF THE ASSESSMENT ORDER, IT IS NOTED THAT THE ASSESSING OF FICER HAS STATED THAT AFTER RECORDING THE REASONS AND OBTAINING NECESSARY APPRO VAL FROM THE ADDL. CIT(A), ALWAR, CASE WAS REOPENED BY ISSUANCE OF NOT ICE U/S 148 ON 29.03.2016 AND THEREAFTER, THE ASSESSMENT WAS COMPL ETED U/S 147 READ WITH 144 OF THE ACT. AS FAR AS THE SERVICE OF THE NOTICE U/S 148 IS CONCERNED, THE ASSESSMENT ORDER IS THUS APPARENTLY SILENT AND SO I S THE CASE WITH THE ORDER- SHEET WHICH TALKS ABOUT ISSUANCE OF NOTICE U/S 148 ONLY AND NOTHING HAS BEEN STATED AS TO WHETHER THE SAME HAS BEEN DULY SERVED ON THE ASSESSEE. FURTHER, THE LD AR HAS CONTENDED THAT THE NOTICE SO ISSUED U/S 148 HAS BEEN RETURNED BACK UNSERVED AND IS AVAILABLE IN THE ASSE SSMENT RECORDS AND A COPY THEREOF PLACED IN THE PAPERBOOK. WHERE THE IN ITIAL NOTICE HAS BEEN RECEIVED BACK UNSERVED WHICH IS AN UNDISPUTED FACT IN THE INSTANT CASE, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO TAKE STEPS IN TERMS OF ISSUING ANOTHER NOTICE AFTER DETERMINING THE REASONS FOR NO N-SERVICE AND/OR ALTERNATIVELY, SERVICE THE NOTICE THROUGH AFFIXTURE . HOWEVER, IN THE INSTANT CASE, NO SUCH FURTHER STEPS HAVE BEEN TAKEN BY THE AO EITHER IN TERMS OF FRESH NOTICE OR SERVICE THROUGH AFFIXTURE. THE AO KNOWING FULLY WELL THAT THE ITA NO. 906/JP/2018 CHARAN SINGH, ALWAR VS. ITO, BHIWADI 6 NOTICE U/S 148 HAS BEEN RECEIVED BACK UNSERVED HAS PROCEEDED AHEAD WITH THE PROCEEDINGS AND PASSED THE ORDER U/S 147 OF THE ACT. THE JURISDICTIONAL REQUIREMENT OF SERVICE OF NOTICE ON THE ASSESSEE HA S THUS NOT BEEN COMPLIED WITH IN, THEREFORE, THE RESULTANT PROCEEDINGS CANNO T BE SUSTAINED AND LIABLE TO BE SET-ASIDE. 8. FURTHER, WE HAVE GONE THROUGH THE DECISION RELIE D UPON BY THE LD DR IN CASE OF YAMU INDUSTRIES LTD (SUPRA), HOWEVER, WE F IND THAT THE SAID DECISION DOESNT SUPPORT THE CASE OF THE REVENUE AS IN THAT CASE, NOTICE U/S 143(2) WAS SENT BY REGISTERED POST AT CORRECT ADDRESS OF A SSESSEE HAD NOT BEEN RECEIVED BACK UNSERVED AND A PRESUMPTION UNDER LA W WAS DRAWN THAT SAID NOTICE HAD BEEN DULY SERVED UPON ASSESSEE WITHIN PE RIOD OF LIMITATION UNLIKE IN THE INSTANT CASE, WHERE THE NOTICE SENT THROUGH SPEED POST HAS BEEN RECEIVED BACK UNSERVED AND THEREFORE, THE QUESTION OF PRESUMPTION OF SERVICE OF NOTICE DOESNT ARISE. 9. THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. CHETAN GUPTA (SUPRA), WHICH HAS BEEN RELIED UPON BY THE LD AR, SUPPORTS THE CASE OF THE ASSESSEE WHEREIN IT WAS HELD AS UNDER- (I) UNDER SECTION 148 OF THE ACT, THE ISSUE OF NOT ICE TO THE ASSESSEE AND SERVICE OF SUCH NOTICE UPON THE ASSESSEE ARE JU RISDICTIONAL REQUIREMENTS THAT MUST BE MANDATORILY COMPLIED WITH . THEY ARE NOT MERE PROCEDURAL REQUIREMENTS. (II) FOR THE AO TO EXERCISE JURISDICTION TO REOPEN AN ASSESSMENT, NOTICE UNDER SECTION 148 (1) HAS TO BE MANDATORILY ISSUED TO THE ASSESSEE. FURTHER THE AO CANNOT COMPLETE THE REASSESSMENT WIT HOUT SERVICE OF THE NOTICE SO ISSUED UPON THE ASSESSEE IN ACCORDANCE WI TH SECTION 282 (1) OF THE ACT READ WITH ORDER V RULE 12 CPC AND ORDER III RULE 6 CPC. ITA NO. 906/JP/2018 CHARAN SINGH, ALWAR VS. ITO, BHIWADI 7 (III) ALTHOUGH THERE IS A CHANGE IN THE SCHEME OF S ECTIONS 147, 148 AND 149 OF THE ACT FROM THE CORRESPONDING SECTION 3 4 OF THE 1922 ACT, THE LEGAL REQUIREMENT OF SERVICE OF NOTICE UPON THE ASSESSEE IN TERMS OF SECTION 148 READ WITH SECTION 282 (1) AND SECTIO N 153 (2) OF THE ACT IS A JURISDICTIONAL PRE-CONDITION TO FINALIZING THE REASSESSMENT. (IV) THE ONUS IS ON THE REVENUE TO SHOW THAT PROPER SERVICE OF NOTICE HAS BEEN EFFECTED UNDER SECTION 148 OF THE A CT ON THE ASSESSEE OR AN AGENT DULY EMPOWERED BY HIM TO ACCEPT NOTICES ON HIS BEHALF. IN THE PRESENT CASE, THE REVENUE HAS FAILED TO DISCHAR GE THAT ONUS. (V) THE MERE FACT THAT AN ASSESSEE OR SOME OTHER PE RSON ON HIS BEHALF NOT DULY AUTHORIZED PARTICIPATED IN THE REAS SESSMENT PROCEEDINGS AFTER COMING TO KNOW OF IT WILL NOT CON STITUTE A WAIVER OF THE REQUIREMENT OF EFFECTING PROPER SERVICE OF NOTI CE ON THE ASSESSEE UNDER SECTION 148 OF THE ACT. (VI) REASSESSMENT PROCEEDINGS FINALISED BY AN AO WI THOUT EFFECTING PROPER SERVICE OF NOTICE ON THE ASSESSEE UNDER SECT ION 148 (1) OF THE ACT ARE INVALID AND LIABLE TO BE QUASHED. (VII) SECTION 292 BB IS PROSPECTIVE. IN ANY EVENT T HE ASSESSEE IN THE PRESENT CASE, HAVING RAISED AN OBJECTION REGARD ING THE FAILURE BY THE REVENUE TO EFFECT SERVICE OF NOTICE UPON HIM , THE MAIN PART OF SECTION 292BB IS NOT ATTRACTED. ' 10. IN LIGHT OF ABOVE DISCUSSIONS, IN ABSENCE OF S ERVICE OF NOTICE ISSUED U/S 148 ON THE ASSESSEE, THE REASSESSMENT PROCEEDINGS C OMPLETED U/S 147 R/W 144 EX-PARTE QUA THE ASSESSEE DESERVED TO BE QUASHED AND ARE TH US SET- ASIDE. ITA NO. 906/JP/2018 CHARAN SINGH, ALWAR VS. ITO, BHIWADI 8 11. IN VIEW OF THE ABOVE, OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE BECOME INFRUCTIOUS AND THUS HAVE NOT BEEN ADJUDICAT ED UPON. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. PRONOUNCED IN THE OPEN COURT ON 22/01/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 22/01/2019 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- CHARAN SINGH, ALWAR, RAJASTHAN 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD- BHIWADI 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 906/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR