ACIT, Meerut V. Smt. Sunita Jain, New Delhi

ITSSA 27/DEL/2011

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2209 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 28-06-2016
• Assessment Year: misc
• Appeal Filed On: 02-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G NEW DELHI BEFORE SH. H.S. SIDHU , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER IT (SS) A NO. 27 /DEL/ 2011 BLOCK PERIOD : 1997 - 98 TO 2003 - 04 ACIT, CIRCLE - 2, MEERUT VS. SMT. SUNITA JAIN, S - 439, 1 ST FLOOR, GREATER KAILASH - II, NEW DELHI GIR/PAN : AAGPJ2996N (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY NONE DATE OF HEARING 28.06.2016 DATE OF PRONOUNCEMENT 29.07.2016 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE R EVENUE IS DIRECTED AGAINST ORDER DATED 17/03/2011 OF LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS), MEERUT , FOR BLOCK PERIOD FROM 1997 - 98 TO 2003 - 04 (TILL THE DATE OF SEARCH I.E. 23/12/2002) RAISING FOLLOWING GROUNDS: 1. WHETHER THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN TREATING THE ASSESSMENT ANNULLED IGNORING THE SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER WHICH IS WELL WITHIN TIME AND THE ASSESSM ENT COMPLETED IS ALSO WELL WITH IN TIME. 2 IT (SS) A NO. 27/DEL/2011 BLOCK PERIOD : 1997 - 98 TO 2003 - 04 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. T HE FACTS IN BRIEF OF THE CASE ARE THAT INCRIMINATING DOCUMENTS RELATING TO THE ASSESSEE WE RE FOUND AND SEIZED DURING THE COURSE OF S EARCH UNDER SECTION 132 OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ). THE ASSESSING OFFICER NOTED IN THE ASSESSMENT ORDER THAT NOTICE UNDER SECTION 158BD R.W.S. 158BC OF THE ACT DATED 25/02/2004 WA S SERVED ON THE ASSESSEE 04/03/ 2005. IN RESPONSE, THE ASSESSEE FILED RETURN FOR THE BLOCK PERIOD ON 04/04/2005 , DECLARING NIL UNDISCLOSED INCOME. SUBSEQUENTLY , NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE AND THE ASSESSMENT WAS COMPLE TED ON 29/03/2007 AT UNDISCLOSED INCOME OF RS. 1,53,20, 000/ - FOR THE BLOCK PERIOD. BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), THE ASSESSEE CHALLENGED THAT THE ASSESSMENT PROCEEDINGS COMPLETED ON 29/03/2007 WERE BARRED BY LIMITATION AS THE FIR ST NOTICE UNDER SECTION 158 BD R.W.S. 158 BC DATED 30/10/2003 WAS SERVED VALIDLY ON THE ASSESSEE AND THUS LIMITATION FOR COMPLETION OF THE ASSESSMENT EXPIRED ON 31/10/ 2005. THE ASSESSEE ALSO CHALLENGED JURISDICTION ASSUMED UNDER SECTION 158BD OF THE ACT O N THE GROUND THAT SATISFACTION NOTE WAS RECORDED ON 24/02/2005, WHERE AS THE NOTICE UNDER SECTION 158 BD OF THE ACT WAS ISSUED ON 30/10/2003 AND EVEN THE SECOND NOTICE UNDER SECTION 158 BD OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER ON 25/02/ 2 004, THUS , BO TH THE NOTICES WERE ISSUED WITHOUT 3 IT (SS) A NO. 27/DEL/2011 BLOCK PERIOD : 1997 - 98 TO 2003 - 04 RECORDING SATISFACTION NOTE FOR INITIATIN G PROCEEDINGS UNDER SECTION 158 BD OF THE ACT. THE ASSESSEE ALSO CHALLENGED THE ADDITIONS ON MERIT . T HE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) ANNULLED THE ASSESSMENT ORDER PA SSED BY THE ASSESSING OFFICER WITHOUT ADJUDICATING ON THE ME RIT OF THE ADDITIONS. AGGRIEVED, THE R EVENUE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. AT THE TIME OF HEARING , NONE REPRESENTED ON BEHALF OF THE ASSESSEE. IT IS SEEN FROM THE ORDER SHEET OF THE APPEAL FOLDER THAT THE APPEAL WAS FIXED ON 01/11/2011 FOR THE FIRST TIME, WHICH WAS ADJOURNED TO 10/04/2012 DUE TO NON - FUNCTIONING OF THE BENCH. ON 10/04/2012 , THE CASE WAS ADJOURNED TO 12/09/2012 ON THE REQUEST OF LEARNED DEPARTMENTAL REPRESENTATIVE AND BOTH THE PART IES WERE INFORMED IN THE COURT . O N 12/09/ 2012 NONE PRESENT ON BEHALF OF THE ASSESSEE AND THUS CASE WAS ADJOURNED TO 24/01/2013 WITH THE DIRECTION TO ISSUE FRESH NOTICE THROUGH DEPARTMENTAL R EPRESENTATIVE. AGAIN ON 24/01/ 2013, THE BENCH DID NOT FUNCTION AND FRESH NOTICE WAS I SSUED FIXING THE DATE ON 11/06/2013. AGAIN ON 11/06/2013, NONE ATTENDED ON BEHALF OF THE ASSESSEE AND T HE CASE WAS ADJOURNED TO 6/11/ 2013 WIT H THE DIRECTION TO ISSUE FRESH NOTICE TO THE ASSESSEE THROUGH DEPARTMENTAL R EPRESENTATIVE. AGAIN ON 06/11/2013, THE BENCH DID NOT FUNCTION AND FRESH NOTICE FIXING THE DATE OF HEARING 17/04/2014 WAS ISSUED AT THE ADDRESS OF THE ASSESSEE GIVEN IN COLUMN NO. 11 OF FORM NO. 36 OF THE APPEA L. AGAIN ON THE DATE OF HEARING, NONE ATTENDED ON BEHALF OF THE ASSESSEE A ND CASE WAS ADJOURNED TO 29/10/ 2014 WITH 4 IT (SS) A NO. 27/DEL/2011 BLOCK PERIOD : 1997 - 98 TO 2003 - 04 THE DIRECTION TO ISSUE FRESH NOTICE THROUGH DEPARTMENTAL R EPRESENTATIVE. AGAIN ON 29/10/2014, NONE ATTENDED ON BEHALF OF THE ASSESSEE, T HE CASE WAS ADJOURNED TO 04/05/ 2015 WITH THE DIRECTION TO ISSUE FRESH NOTICE THROUGH DEPARTMENTAL R EPRESENTATIVE. ON 04/05/2015, THE BENCH DID NOT FUNCTION AND FRESH NOTICE FIXING THE CASE ON 09/10/2015 WAS ISSUED. AGAIN ON 09/10/ 2 015 , THE BENCH DID NOT FUNCTION AND FRESH NOTICE FIXING THE CASE ON 23/02/2016 WAS ISSUED. AGAIN ON 23/02/ 2016, THE BENCH DID NOT FUNCTION AND FRESH NOTICE FIXING THE CASE FOR HEARING ON 28/06/2016 WAS FIXED AT THE ADDRESS OF THE ASSESSEE PROVIDED IN FORM NO. 36 AND THIS NOTICE HAS NOT RETURNED UNSERVED. IN VIEW OF THE OPPORTUNITIES GRANTED TO THE ASSESSEE, IT IS CLEAR THAT THE ASSESSEE WAS NOT INTERESTED IN PROSECUTING THE APPEAL. ON THE DATE OF HEARING, THE LEARNED DEPARTMENTAL R EPRESENTATIVE ALSO DID NO T APPEAR AND THE APPLICATION FILED ON HER BEHALF BY INCOME TAX OFFICER ( A DMIN . ) WAS RE JECTED . THIS , BEING AN OLD A P PEA L CAN T BE ADJOURNED FOR A LONG TIME, HENCE , WE PROCEEDED TO DISPOSE O F F THE APPEAL, ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. 4. WE FIND FROM THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) THAT THE ASSESSMENT ORDER HAS BEEN ANNULLED ON TWO GROUNDS. THE RELEVANT PART OF THE IMPUGNED ORDER IS REPRODUCED AS UNDER: (II) AS REGARDS SERVICE OF NOTICE, I HOLD THAT TH E NOTICE DATED 30.10.2003 WAS VALIDLY SERVED AS THE ASSESSEE HAS FILED A COPY OF THE SAME AND HAS ALSO PRODUCED ORIGINAL THEREOF. THE AO HAS NOT BEEN MADE OUT A CASE THAT THIS NOTICE HAS A FORGED SIGNATURE OF THE AO OR THAT IT HAS NOT 5 IT (SS) A NO. 27/DEL/2011 BLOCK PERIOD : 1997 - 98 TO 2003 - 04 BEEN ISSUED FROM HIS OFFICE/UNDER HIS SEAL. THE LIMITATION, THEREFORE, FOR MAKING THE ASSESSMENT BEGAN FROM THAT DATE AND IT EXPIRED ON 31.10.2005 ASSESSMENT ORDER DATED 29.3.2007 IS, THEREFORE, BARRED BY LIMITATION. THE SAME IS, THEREFORE, ANNULLED. (III) ON THE POINT OF RECORDING OF SATISFACTION ALSO, I FIND THAT THE AO S STATEMENTS/ARGUMENTS ARE SELF DEFEATING. THE SATISFACTION OUGHT TO HAVE RECORDED BEFORE 30.10.2003. IN FACT, WHAT MAKES AO S CASE WORSE IS THAT IT HAS BEEN ADMITTED THAT A NOTICE DATE D 25.2.2004 WAS SERVED ON 4.3.2005, BUT THE SATISFACTION WAS RECORDED ON 24.2.2005. RECORDING OF SATISFACTION HAS TO TAKE PLACE BEFORE ISSUANCE OF A NOTICE U/S 158BD. SINCE THE ASSESSING OFFICER FAILED TO DO SO, THE ASSESSMENT ORDER BECOME A NULLITY. IT IS HELD ACCORDINGLY. 5. AS REGARD THE FIRST REASON OF ANNULMENT OF THE ASSESSMENT ORDER, THE FACTS IN BRIEF ARE THAT A NOTICE UNDER SECTION 158 BD OF THE ACT WAS FIRST ISSUED ON 30/10/ 2003 AND SENT THROUGH SPE ED POST AS WELL AS THROUGH THE INSPECTOR OF INCOME T AX DEPARTMENT . THIS FACT IS NOT IN DISPUTE BETWEEN PARTIES. HOWEVER, THE SERVICE OF NOTICE IS IN DISPUTE BETWEEN THE PARTIES. ACCORDING TO THE ASSESSING OFFICER, THE NOTICE SENT THROUGH SPEED POST RETURNED UNSERVED AND THE I NSPECTOR ALSO RETURNED UNSERVED COPY OF NOTICE DATED 30/10/2003, THEREFORE , THE NOTICE DATED 30/10/2003 WAS NULL AND VOID AB - INITIO. THE ASSESSING OFFICER ISSUED A NOTHER NOTICE UNDER SECTION 158 BD OF THE ACT 25/02/ 2004, WHICH WAS SERVED ON TH E ASSESSEE ON 04/03/ 2005. THUS, AC CORDING TO THE ASSESSING OFFICER, THE LIMITATION FOR COMPLETION OF ASSESSMENT STARTS FROM 04.03.2005 , AND THEREFORE THE ASSESSMENT COMPLETED ON 29/03/2007 WAS A VALID ASSESSMENT ORDER. WHEREAS ON THE OTHER HAND, THE 6 IT (SS) A NO. 27/DEL/2011 BLOCK PERIOD : 1997 - 98 TO 2003 - 04 ASSESSEE CLAIMED THAT THE I NSPECTOR SERV ED THE NOTICE DATED 30/10/2003 ON THE HUSBAND OF THE ASSESSEE, AND THE ASSESSEE WAS IN POSSESSION OF THE ORIGINAL COPY OF THE NOTICE DATED 30/10/2003, AND WHICH HAS BEEN PRODUCED BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) ALSO AS EVIDENT FROM HIS FINDINGS. THEREFORE , ACCORDING TO THE ASSESSEE , THE LIMITATION FOR COMPLETION OF THE AS SESSMENT STARTS FROM 30/10/2003 . AS THE ASSESSMENT WAS TO BE COMPLETED WITHIN TWO YEARS FROM THE END OF THE MONTH IN WHI CH THE NOTICE UNDER SECTION 158 BD WAS ISSUED, THE ASSESSMENT COMPLETED BY THE ASSESSING OFFICER ON 29/03/2007 WAS BEYO ND THE LIMITATION. THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER ON THIS ISSUE AND AFTER CONSIDERING THE REMAND REPORT AS WELL AS REJOINDER OF THE ASSESSEE ON THE ISSUE IN DISPUTE AND AFTER VERIFYING THE ORIGINAL COPY OF THE NOTICE UNDER SECTION 158 BD DATED 30 /10/2003 HELD THAT LIMITATION FOR MAKING T HE ASSESSMENT EXPIRED ON 31/10/ 2005 AND SINCE ASSESSMENT WAS COMPLETED ON 29/03/2007, IT WAS BARRED BY LIMITATION AND , THEREFORE , ANNULLED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS), WHO HIMSELF HAS VERIFIED THE ORIGINAL COPY OF THE NOTICE DATED 13/10/2003 AND ARRIVE D AT CONCLUSION THAT IT WAS VALIDLY SERVED ON 30/10/2003 ON THE ASSESSEE. THE FINDING OF THE LEARNED COMMI SSIONER OF INCOME - TAX ( APPEALS) ON THE ISSUE IN DISPUTE IS WELL REASONED AND ACCORDINGLY WE DECLINE TO INTERFERE IN THE SAID FINDING S AND UPHOLD THE SAME. 7 IT (SS) A NO. 27/DEL/2011 BLOCK PERIOD : 1997 - 98 TO 2003 - 04 6. AS REGARD TO THE SECOND POINT OF ANNULMENT OF THE ASSESSMENT ORDER, THE FACT THAT THE ASSESSING OF FICER IN REMAND REPORT STATED THE FACT THAT SATISFACTION FOR INITIATIN G PROCEEDINGS UNDER SECTION 158 BD WAS RECORDED ON 24/02/2005. THE ASSESSEE STATED BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) THA T NOTICE UNDER SECTION 158 BD WAS ISSUED AND S ERVED ON 30/10/2003 WHEREAS SATISFACTION FOR INITIATING 158BD PR OCEEDING S WAS RECORDED ON 24/02/ 2005 , WHICH WAS NOT ACCORDING TO THE LAW , AS RE CORDING OF SATISFACTION IS SINE QU A NONE FOR ISSUE OF NOTICE UNDER SEC TION 158 BD OF THE ACT. ACCORDING TO THE ASS ESSEE, EVEN THE SECOND NOTICE DATED 158 BD OF THE ACT , ON THE BASIS OF WHICH THE ASSESSING OFFICER COMPLETED THE ASSESSMENT , WAS ALSO ISSUED ON 25/02/2004, WHICH IS ALSO PRIOR TO RECORDING OF SATISFACTION O N 24/02/2005. THUS, ACCORDING TO THE ASSESSEE THE PROCEEDI NGS COMPLETED UNDER SECTION 158 BD OF THE ACT WAS WITHOUT JURISDICTION. WE HAVE PERUSED THE MA TERIAL ON RECORD AND FIND THAT T HE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS), AFTER VERIFYING FACTS AND PROVIDING OPPORTUNITY TO THE ASSESSING OFFICER A ND TAKING INTO CONSIDERATION REMAND REPORT AS WELL AS REJOINDER , ARRIVE D AT THE CONCLUSION THAT THE ASSESSING OFFICER FAILED TO RECORD SATISFACTION BEFORE IS SUE OF NOTICE UNDER SECTION 158 BD OF THE ACT AND ACCORDINGLY HE ANNULLED THE ASSESSMENT ORD ER. IN O UR OPINION, THE FINDINGS OF THE LEARNED COMMISSIONER OF INCOME TAX A PPEALS ON THE ISSUE IN DISPUTE ARE WELL REASONED AND WE DO NOT FIND ANY INF IRMITY IN THE SAME, ACCORDINGLY, WE UPHOLD 8 IT (SS) A NO. 27/DEL/2011 BLOCK PERIOD : 1997 - 98 TO 2003 - 04 HIS FINDING ON THE ISSUE IN DISPUTE. IN VIEW OF OUR DISCUSSION, THE SO LE GROUND OF THE R EVENUE IS DISMISSED. 7. IN THE RESULT , THE APPEAL FILED BY THE R EVENUE IS DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 29 TH JULY , 2016 . SD/ - SD/ - ( H.S. SIDHU ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH JULY , 2016 . LAPTOP / - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI