Smt Sarita Devi Delhi v. Ito Gurgaon

1 In The Income Tax Appellate Tribunal Delhi Bench G New Delhi Before Shri H S Sidhu Judicial Member And Shri L P Sahu Accountant Member I T A No 2363 Del 201 4 A Y 200 9 10 Smt Sarita Devi C O Kapil Goel Advocate F 26 124 Sector 7 Rohini Delhi 110 085 Pan Afjpd 8447 A Vs Income Tax Officer Ward 1 1 Gurgaon Appellant Appellant Appellant Appellant Respondent Respondent Respondent Respondent Assessee By Sh Kapil Goel Adv Department By Sh S S Rana Cit Dr Order Order Order Order Per H S Sidhu Jm Per H S Sidhu Jm Per H S Sidhu Jm Per H S Sidhu Jm The Assessee Has Filed The Present Appeal Against The Impugned Order Dated 14 02 2014 Passed By The Ld Commissioner Of Income Tax Appeals 2 Faridabad On The Following Grounds Legal Ground On Service Of Jurisdictional Notice U S 143 2 Before Exparte Assessment Framed U S 144 1 That On The Facts And In The Circumstances Of The Case And In Law The Impugned Exparte Assessment Framed By Ao Is Void Ab Initio For Want Of Mandatory Service Of Jurisdictional Notice U S 143 2 At Latest Available Address 2 Prayer To Call Case Records If Deemed Appropriate 2 That On The Facts And In The Circumstances Of The C Ase And In Law The Impugned Exparte Assessment Framed By Ao Is Void Ab Inito For Which Straight Prayer Is Made To Call For Case Records From The Office Of Ao Addition Of Rs 60 29 000 Wrongly Sustained By Cit A On Merits 3 That On The Facts And In The Circumstances Of The C Ase And In Law Ld Cit A Erred In Sustaining The Addi Tion Of Rs 60 29 000 On Basis Of Perverse Findings And Irrelevant Grounds And Ignoring Assessees Pleading S 4 That On The Facts And In The Circumstances Of The C Ase And In Law Ld Cit A Erred In Sustaining The Addi Tion Of Rs 40 00 000 Which Is Sufficiently Explained Bei Ng Received From Duly Identified Sh Har Prakash As Ad Vance For Property Sale Without Any Meaningful Enquiry F Rom Said Party And Summarily Rejecting Assessees Plea 5 That On The Facts And In The Circumstances Of The C Ase And In Law Ld Cit A In Sustaining The Addition O F Rs 40 00 000 Which Is Sufficiently Explained Being Received From Duly Identified Sh Har Prakash Who H As 3 Handsome Creditworthiness As Demonstrated From His Bank Statement And Genuineness Is Proved By Agreeme Nt To Sell 6 That On The Facts And In The Circumstances Of The C Ase And In Law Ld Cit A Erred In Sustaining The Bala Nce Addition Of Rs 20 29 500 Being Cash Withdrawn An D Re Deposited Which Is Proved By Fund Flow Statement That The Appellant Craves Leave To Add To Amend Modify Rescind Supplement Or Alter Any Of The Gro Unds Stated Hereinabove Either Before Or At The Time Of Hearing Of This Appeal 2 The Facts Emanate From The Assessment Order A Re That Return Declaring An Income Of Rs 2 58 140 For A Y 2009 10 Was Filed On 08 03 2010 By The Assessee Which Was Processed U S 143 1 Of The I Ncome Tax Act 1961 Hereafter Referred As Act The Case Of The Assess Ee Was Selected For Scrutiny Through Cass For A Y 2009 10 Statutory Notice U S 143 2 Of The Income Tax Act Was Issued On 19 08 2010 By The Income Tax Offi Cer Ward 3 Gurgaon Fixing The Case For 06 09 2010 And Duly Served The Reafter The Case Transferred To The Ito Ward 1 1 Gurgaon As The Jurisdiction Over The Case Lies With Him Accordingly Notice U S 143 2 And 142 1 Of The In Come Tax Act 1961 Alongwtth Detailed Questionnaire Were Issued On 8 6 2011 And Case Was Fixed For Hearing On 22 6 2011 And Duly Served Thereafter Various O Pportunities Were Allowed To The Assessee By Issuing Notices Under Section 143 2 And 142 1 Of I T Act 4 However The Assessee Has Not Made Any Compliance As Per Ao The Assessee Was Not Cooperating In The Matter Of Finalization O F Assessment Proceedings And It Was Of No Use Keeping The Case Pending Which Is Going To Be Barred By Limitation On 31 12 2011 Therefore Notice U S 14 2 1 Alongwith Detailed Show Cause Giving Therein Details Of Opportunities Allow Ed Was Issued On 08 11 2011 Finally Fixing The Case For 14 11 2011 Ao Noted Th At Even On The Final Fixed Dated I E 14 11 2011 And Thereafter Till Date The Assess Ee Has Not Furnished Any Information Documents Ao Further Observed That Fr Om The Non Cooperative Attitude Of The Assessee It Can Be Concluded That The Assessee Has No Explanation And Evidence In Regard To The Informat Ion Documents As Called For Vide Questionnaire And Final Show Cause Notice Un Der These Circumstances The Ao Was Left With No Alternative But To Finalise The Assessment Exparte U S 144 Of The Income Tax Act 1961 On The Basis Of Best Judg Ment And On The Basis Of Material Available On Record At The Income Of Rs 3 97 36 900 By Making Addition Of Rs 60 29 500 And Rs 3 34 49 264 V Ide Order Dated 09 12 2011 3 Aggrieved With The Aforesaid Order Dated 09 12 2011 Assessee Filed The Appeal Before The Ld Cit A Who Impugned Order Da Ted 14 02 2014 Has Partly Allowed The Appeal Of The Assessee 4 Against The Aforesaid Order Dated 14 02 2014 Pas Sed By The Ld Cit A Assessee Is In Appeal Before The Tribunal 5 At The Time Of Hearing Ld Counsel Of The Asses See Argued Only On The Issue Involved In Ground No 1 Relating To Servic E Of Jurisdictional Notice U S 143 2 Before Exparte Assessment Framed U S 144 Of The I T Act 1961 He Stated That No Notice U S 143 2 Of The I T Act 1961 Was Served Upon The Assessee As A Result Of Which Critical Evidence Pe Rtaining To The Additions Made 5 By The Ao Could Not Be Submitted During The Assessm Ent Proceedings He Further Stated That Ld Cit A In His Order At Page No 6 7 Vided Para No 3 4 Has Held That The Ao Has Not Commented Upon The Fact That The Assessee Could Not Get Notice U S 143 2 142 1 Of The Income Tax Act Be Cause Of Which There Was No Compliance On Her Part And Additions Were Made In T He Order U S 144 Of The Act Therefore He Stated That The Present Case Has Involved The Legal Issue Of Non Service Of Mandatory Notice U S 143 2 Of The Act Which Is Squarely Covered By The Decision Of The Honble Supreme Cour T Of India In The Case Of Acit Anr Vs Hotel Blue Moon 2010 321 Itr 362 Sc Wherein The Honble Supreme Court Has Held That The Issue Of Notice U S 143 2 Of The I T Act Is Mandatory And Not Procedural 6 On The Contrary Ld Dr Relied Upon The Order Pa Ssed By The Ld Cit A And Stated That The Ld First Appellate Authority Has Passed A Well Reasoned Order On The Basis Of The Records And As Per The P Rovisions Of Law Therefore The Impugned Order May Be Upheld By Dismissing The Appe Al Filed By The Assessee 7 We Have Heard Both The Parties And Perused Th E Relevant Records Especially The Order Passed By The Revenue Authorities Alongw Ith The Documentary Evidence Filed By The Assessee Supporting The Claim Of The Assessee As Well As The Aforesaid Decision Rendered By The Honble Supr Eme Court Of India On The Legal Issue In Dispute No Doubt Assessee Has Rai Sed So Many Grounds Of Appeal In Which The Assessee Challenged The Non Ser Vice Of The Notice U S 143 2 Of The Act And Also Merits Of The Case Asse Ssee Has Also Challenged The Addition In Dispute On Merit Also By Producing Vari Ous Documentary Evidence Supporting Its Claim Before The Revenue Authority A S Well As Before Us But He Argued Only On The Legal Issue Raised In Ground No 1 Keeping In View Of The Facts And Circumstances Of The Present Case And The Arguments Advanced By The 6 Ld Ar Of The Assessee We Are Of The View That Th E Legal Issue Raised In Ground No 1 Regarding The Non Issuance Of Notice U S 1 43 2 Of The I T Act Which Goes To The Root Of The Matter Can Be Taken Up Fir St And Decide According To The Facts And Circumstances Of The Case Law Cited By Th E Ld Counsel Of The Assessee 7 1 We Find That Ld Cit A In His Impugned Orde R Vide Para No 3 4 3 5 At Page No 6 7 Has Observed As Under 3 4 I Have Considered The Facts Of The Case Tog Ether With The Submissions Of The Appellant And The Report Of The Ao On The Admissibility Of Additional Evidence It Has Be En Submitted By The Appellant That Notices 143 2 142 1 Of The Income Tax Act Could Not Be Served On Her As A Result Of Whic H Critical Evidence Pertaining To The Additions Made By The Ao Could Not Be Submitted During The Assessment Proceedings Since Critical Evidence Having Significant Ramification I N So Far As This Case Is Concerned Could Not Be Filed And No C Ompliance Made During The Assessment Proceedings The Ao Was Left With No Option But To Pass The Order U S 144 Of The Income Tax Act It Has Been Submitted By The Appellant Tha T She Could Know About The Assessment Only On 18 04 2012 When T He Notice Of Recovery Of Demand Was Served On Her Accordingly The Appellant Applied For A Copy Of Or Der And Demand Notice Which Was Served On Her On 22 06 201 2 Against Which The Appeal Was Filed On 25 06 2012 T He Ao Has Submitted That At Least 3 Opportunities Were Gi Ven To The Appellant Followed By A Show Cause Notice Which Rem Ained Un Complied With As A Result Of Which He Has Left With No 7 Alternative But To Pass Order U S 144 Of The Income Tax Act However The Ao Has Not Commented Upon The Fact Tha T The Appellant Could Not Get Notice U S 143 2 142 1 Of The Income Tax Act Because Of Which There Was No Compli Ance On Her Part And Additions Were Made In The Order U S 144 Of The Income Tax Act Rule 46 A Lists 4 Circumstances Under Which The Additional Evidence Shall Be Admitted At The Appellate Stage A Where The Assessing Officer Has Refused To Admit Evidence Which Ought To Have Been Admitted Or B Where The Appellant Was Prevented By Sufficient Cause From Producing The Evidence Which He Was Called Upon To Produce By The Assessing Officer Or C Where The Appellant Was Prevented By Sufficient Cause From Producing Before The Assessing Officer Any Evidence Which Is Relevant To Any Ground Of Appeal Or A Where The Assessing Officer Has Made The Order Appealed Against Without Giving Sufficient Opportunity To The Appellant To Adduce Evidenced Relevant To Any Ground Of Appeal 3 5 After Considering The Facts Of The Case And In The Light Of The Four Circumstances Mentioned In Rule 46 A I Hold 8 That The Appellants Case Is Covered By Rule 46 A 1 B And C Of The Income Tax Rules Hence Considering The Facts Of The Case Particularly The Non Servic E Of Notices U S 143 2 142 1 The Amount Involved And In The Interest Of Justice And Fair Play The Addition Al Evidence Filed By The Appellant During The Course O F Appellate Proceedings Is Hereby Admitted 7 2 After Perusing The Aforesaid Findings Of The Ld Cit A We Are Of The Considered View That Ld Cit A Has Himself Admitt Ed In The Aforesaid Para No 3 5 That He Is Admitting Additional Evidences Filed By The Assessee Under Rule 46 A 1 B And C Of The Income Tax Rules Because Of Non Service Of Notice U S 143 2 142 1 Of The I T Act Secondly The Ld Ci T A Has Also Mentioned In Para No 3 4 As Reproduced Above That The Appellant Cou Ld Not Get Notice U S 143 2 142 1 Of The I T Act Because There Was N O Compliance By The Assessee And Addition Were Made In The Order U S 144 Of The Act Meaning Thereby That Ld Cit A Himself Admitted That No Notice U S 14 3 2 142 1 Of The I T Act Has Been Served Upon The Assessee And The Ao Completed The Assessment By Making The Addition In Dispute In The Case Of The Assessee And The Ld Cit A Has Upheld The Order Of The Ao Without Appreciating Th E Non Service Of Notice To The Assessee U S 143 2 Of The I T Act Under The Ci Rcumstances The Exparte Assessment Order Is Void Ab Initio For Want Of Man Datory Service Of Jurisdictional Notice U S 143 2 Of The I T Act 1961 And Hence Not Sustainable In The Eyes Of Law In View Of The Decision Of The Honble Supreme Court Of India In The Case Of Acit Anr Vs Hotel Blue Moon 2010 321 Itr 362 Sc Wherein The Honble Supreme Court Has Held That The Issue Of Notice U S 143 2 Of The I T Act Is Mandatory And Not Procedural The Operative Portion Of The Aforesaid Decision Is Reproduced As Under 9 Acit Anr Vs Hotel Blue Moon Acit Anr Vs Hotel Blue Moon Acit Anr Vs Hotel Blue Moon Acit Anr Vs Hotel Blue Moon 2010 321 Itr 362 Sc 2010 321 Itr 362 Sc 2010 321 Itr 362 Sc 2010 321 Itr 362 Sc Held It Is Mandatory For The Ao To Issue Notice U S 143 2 The Issuance And Service Of Notice U S 143 2 Is Manda Tory And Not Procedural If The Notice Is Not Served Within The Prescribed Period The Assessment Order Is Invalid Reassessment No Tice Assessee Intimating Original Return Be Treated As F Resh Return Reassessment Proceedings Completed Despite Assessee Filing Affidavit Denying Serviced Of Notice Under Section 143 2 Assessing Officer Not Representing Before Commissio Ner Appeals That Notice Had Been Issued Reassessment Order Invalid Due To Want Of Notice Under Section 143 2 Income Tax A Ct 1961 Ss 143 147 148 1 Prov Ito V R K Gupta 308 I Tr 49 Delhi Tribu 8 In The Background Of The Aforesaid Discussions And Respectfully Following The Precedent As Aforesaid We Cancel The Assessme Nt Order As Well As The Impugned Order By Accepting The Appeal Filed By Th E Assessee 9 In The Result The Appeal Of The Assessee Is Al Lowed Order Pronounced On 04 12 2017 Sd Sd L P Sahu L P Sahu L P Sahu L P Sahu H S Sidhu H S Sidhu H S Sidhu H S Sidhu Accountant Member Accountant Member Accountant Member Accountant Member Judicial Judicial Judicial Judicial Member Member Member Member Date 04 12 2017 Sr Bhatnagar Sr Bhatnagar Sr Bhatnagar Sr Bhatnagar Copy Forwarded To Copy Forwarded To Copy Forwarded To Copy Forwarded To 1 Appellant 2 Respondent 3 Cit 4 Cit A 5 Dr Itat True Copy By Order Assistant Registrar Itat Delhi Benches