Shagun Impex Pvt. Ltd., New Delhi v. ITO, New Delhi

ITA 2756/DEL/2010 | 2002-2003
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 275620114 RSA 2010
Assessee PAN AADCS6362F
Bench Delhi
Appeal Number ITA 2756/DEL/2010
Duration Of Justice 1 year(s) 9 month(s) 26 day(s)
Appellant Shagun Impex Pvt. Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 30-03-2012
Date Of Final Hearing 05-03-2012
Next Hearing Date 05-03-2012
Assessment Year 2002-2003
Appeal Filed On 04-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI G BENC H BEFORE SMT. DIVA SINGH JM & SHRI A.N. PAHUJA AM ITA NO.2756/DEL/2010 ASSESSMENT YEAR:2002-03 SHAGUN IMPEX PVT. LTD. (NOW KNOWN AS ARKAAY IMPEX P. LTD.) 12- 3 RD FLOOR VASANT ARCADE VASANT KUNJ NEW DELHI V/S . INCOME TAX OFFICER WARD 8(1) C.R. BUILDING NEW DELHI [PAN : AADCS 6362 F] (APPELLANT) (RESPONDENT) ASSESSEE BY S/SHRI NARENDER CHHILLAR & HARISH KUMAR ARS REVENUE BY SHRI S. MOHANTHY DR DATE OF HEARING 05-03-2012 DATE OF PRONOUNCEMENT 30-03-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 04.06.2010 BY THE ASSESSEE AGA INST AN ORDER DATED 19 TH APRIL 2010 OF THE LEARNED CIT(A)-XI NEW DELHI R AISES THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) ERRED IN UPHOLDING THE ACTIO N OF THE ASSESSING OFFICER IN INITIATING REASSESSMENT PROCEEDINGS U/S 147/148 OF THE INCOME-TAX ACT 1961 . 1.1 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE INITIATION OF REASSESSMENT PROCEEDING S BY HOLDING THAT THE ASSESSING OFFICER WAS NOT DUTY BOUND TO FURNISH THE EVIDENCE RELIED UPON HIM FOR INITIATING THE SAID REASSESSMENT PROCEEDINGS WITHOU T APPRECIATING THAT SUCH ACTION OF THE ASSESSING OFFI CER WAS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE A ND THEREFORE BAD IN LAW AND VOID AB-INITIO. I.T.A. NO.2756/DEL./2010 2 1.2 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER WITHO UT TAKING INTO CONSIDERATION OR EVEN ADVERTING TO THE CONTEMPORANEOUS EVIDENCE FURNISHED BY THE APPELLANT. 3*. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF ` ` 30 LACS ON ACCOUNT OF ALLEGED UNEXPLAINED SHARE APPLICATION MONEY RECEIVE D BY THE APPELLANT DURING THE YEAR AS UNEXPLAINED CR EDIT U/S 68 OF THE ACT ALLEGING THAT NO EVIDENCE WERE F ILED TO SUBSTANTIATE THE SAID AMOUNT. 3.1 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN T HIS REGARD WITHOUT CONSIDERING THE CONTEMPORANEOUS EVIDENCE FURNISHED BY THE APPELLANT AND WITHOUT APPRECIATING THAT THE TRANSACTIONS WERE SUPPORTED B Y PROPER DETAILS/DOCUMENTS /VOUCHERS. 3.2 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN TH IS REGARD WITHOUT APPRECIATING THAT THE SHARE APPLICAT ION MONEY WAS RETURNED TO FOUR (4) OUT OF SIX (6) PARTI ES FROM WHOM SUCH SHARE APPLICATION WAS RECEIVED. 4 THAT THE ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN CHARGING INTEREST U/S 234A 234B AND 234D OF THE ACT. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND OR VARY THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. WRONGLY NUMBERED 3 THEREBEING NO GROUND NUMBER 2 2. ADVERTING FIRST TO GROUND NOS. 1 1.1 AND 1.2 I N THE APPEAL FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECLA RING LOSS OF ` `6 98 753/-FILED ON 17.01.2003 BY THE ASSESSEE WAS PROCESSED U/S 143(1 ) OF THE INCOME-TAX ACT 1961 (HEREAFTER REFERRED TO AS THE ACT). SUBSEQUEN TLY THE ASSESSING OFFICER (A.O. IN SHORT) ON THE BASIS OF INFORMATION RECEIV ED FROM DIT(INV.) ISSUED A I.T.A. NO.2756/DEL./2010 3 NOTICE U/S 148 OF THE ACT ON 23 RD MARCH 2009 AFTER RECORDING THE FOLLOWING REASONS IN WRITING:- INFORMATION HAS BEEN RECEIVED FROM DIT(INV.) NEW D ELHI THAT M/S SHAGUN IMPEX PVT. LTD. NEW DELHI HAS BEEN BENEFICI ARY OF ACCOMMODATION ENTRIES BEING PROVIDED BY CERTAIN ENT RY OPERATORS. ON THE BASIS OF THE INFORMATION CHART FORWARDED BY THE DIT(INV.) NEW DELHI IT IS SEEN THAT THE ASSESSEE IS INVOLVED IN THE FOLLOWING BOGUS TRANSACTIONS DETAILED IN THE CHART FORWARDED BY THE DIT(INV.) NEW DELHI BENEFICIARY NAME M/S SHAGUN IMPEX PVT. LTD. BENEFICIARY BANK ACCOUNT BOP BENEFICIARY BANK BRANCH KAROL BAGH GURUDWARA ROAD VALUE OF ENTRY TAKEN ` `30 00 000/- INSTRUMENT NO. BY WHICH ENTRY TAKEN 311123 257655 499348 257606 495672 DATE ON WHICH ENTRY TAKEN 20.7.01 20.7.01 19.7.01 14.7.01 24.7.01 2.8.01 NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT ROYAL CREDITS P. LTD. SUMA FINANCE & INVESTMENT LTD. AMBA ALLOYS P. LTD. LANDMARK COMMUNICATIONS P. LTD. ENPOL P. LTD. DINANATH LATHURIWALA RESP. BANK OF ENTRY GIVEN BANK SBP DG CORPN. BANK K.B. JAI LAXMI COOP BANK FATHEPURI FOR NEXT 3 AND OBC. I HAVE THEREFORE REASON TO BELIEVE THAT AN AMOUNT OF ` `30 00 000/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTIO N U/S 147 OF THE INCOME-TAX ACT 1961. 2.1 IN RESPONSE TO THE AFORESAID NOTICE DATED 23.0 3.2009 THE ASSESSEE REPLIED THAT THE RETURN FILED EARLIER ON 17.01.200 3 MAY BE TREATED AS RETURN FILED IN RESPONSE TO A NOTICE U/S 148 OF THE ACT. DURING TH E COURSE OF REASSESSMENT PROCEEDINGS A COPY OF REASONS RECORDED BY THE AO W ERE SUPPLIED TO THE ASSESSEE. TO A QUERY BY THE AO SEEKING JUSTIFICAT ION FOR THE CREDIT OF ` ` 30 LACS IN ITS BOOKS THE ASSESSEE OBJECTED TO THE ISSUANC E OF NOTICE U/S 148 OF THE ACT . HOWEVER THE AFORESAID OBJECTIONS WERE REJECTED BY THE AO VIDE LETTER DATED 19.11.2009. THOUGH THE ASSESSEE FILED A COPY OF I. T. RETURN CERTIFICATE OF I.T.A. NO.2756/DEL./2010 4 INCORPORATION OF THE AFORESAID SIX COMPANIES BANK STATEMENT OF THE COMPANIES AND COPY OF LEDGER ACCOUNT OF THE ASSESSEE AS APPEA RING IN THEIR BOOKS IN SUPPORT OF THE AMOUNT OF ` ` 5 LACS EACH TAKEN FROM ROYAL CREDITS PVT. LTD. SU MA FINANCE & INVESTMENT LTD. ENPOL PVT. LTD. DINA NA TH LUTHARIWALA SPINNING PVT. LTD. LANDMARK COMMUNICATIONS PVT. LTD AND AMBA ALL OYS PVT. LTD. THE AO CONCLUDED THAT THESE DOCUMENTS ESTABLISHED IDENTIT Y OF THE CREDITORS BUT NOT THE GENUINENESS OF THE TRANSACTIONS . ACCORDINGLY THE AO ASKED THE ASSESSEE TO PRODUCE DIRECTORS OF THE AFORESAID SIX COMPANIES. SINCE THE ASSESSEE DID NOT PRODUCE THE SAID DIRECTORS DESPITE SUFFICIENT OPPOR TUNITY ALLOWED THE AO ADDED AN AMOUNT OF ` `30 LACS U/S 68 OF THE ACT. 3. ON APPEAL THE LD. CIT(A) UPHELD THE VALIDITY OF REOPENING OF THE ASSESSMENT AS UNDER:- 2.5 JUSTIFICATION FOR RE-OPENING ASSESSMENT :- THE FIRST ISSUE TO BE CONSIDERED IS WHETHER THE ASSESSING OFFICER C OULD LAWFULLY ASSUME JURISDICTION TO RE-OPEN THE ASSESSMENT U/S 1 47 OF THE ACT. SINCE THE INITIAL ASSESSMENT WAS MADE U/S 143(1) OF THE ACT THE PROVISOS TO SECTION 147 OF THE ACT FOR SUCH RE-OPEN ING WOULD NOT COME INTO PLAY FOR THE PERIOD UNDER CONSIDERATION. 2.6 IT IS NOT NECESSARY TO REFER TO THE NUMEROUS DECISIONS ON THIS ISSUE AS REFERRED BY THE LD AR SINCE THE LAW IS WE LL SETTLED. IT CANNOT BE DISPUTED THAT THE ASSESSMENT IN SUCH CASE [IN CASE OF 143(3)] CANNOT BE RE-OPENED ON A MERE CHANGE OF OPI NION ON THE SAME SET OF FACTS AND THAT THERE SHOULD BE FAILURE ON THE PART OF THE APPELLANT IN DISCLOSING FULLY AND TRULY MATERIAL FA CTS NECESSARY FOR THE ASSESSMENT. IT IS FURTHER WELL SETTLED THAT FOR THE PURPOSES FOR DECIDING WHETHER THE JURISDICTION HAS BEEN PROPERLY ASSUMED OR NOT WHAT IS NECESSARY IS THAT THERE SHOULD BE SOME MATE RIAL FOR PRIMA- FACIE FORMATION OF THE BELIEF THAT THERE HAS BEEN E SCAPEMENT OF INCOME ON ACCOUNT OF OMISSION OR FAILURE ON THE PAR T OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL THE MATERIA L FACTS NECESSARY FOR THE ASSESSMENT. THE BELIEF WHICH WAS FORMED BY THE AO ASSUMING THE JURISDICTION MUST BE HELD BONAFIDE AND WOULD BE A PRIMA-FACIE ONE. SUCH BELIEF IS PRIMA-FACIE ON THE MATERIAL AVAILABLE AND IN THE ULTIMATE RE-ASSESSMENT THE ASSESSEE MAY ESTABLISH THAT THERE HAS BEEN NO ESCAPEMENT OF ANY INCOME. HOWEVER ALL THESE CONDITIONS WOULD NOT COME INTO PLAY AS THE PRESENT CASE IS RELATED TO 143(1) AND NOT 143(3). I.T.A. NO.2756/DEL./2010 5 2.7. IN THE LIGHT OF THE ABOVE WELL SETTLED PRINCI PLES THE ABOVE ISSUE NEEDS TO BE EXAMINED. THE REASONS WERE DULY RECORDE D BY THE AO. REPEATED OPPORTUNITIES WERE ALLOWED TO THE APPELLAN T. IT WAS THE APPELLANT WHO REPEATEDLY FAILED TO PRODUCE THE DIRE CTOR OF THE INVESTING COMPANIES BEFORE THE AO TO EXPLAIN THE MA TTER BEFORE HIM. 2.8 THE QUESTION THEREFORE IS WHETHER THERE WERE M ATERIAL BEFORE THE AO TO ENTERTAIN THE BELIEF THAT THE APPELLANT H AS NOT DISCLOSED RS.30 00 000/-FROM 6 PERSONS(COMPANIES). THE APPELL ANT FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR O N 17/01/03. THE POINT WAS NEVER BEING A PART OF THE ORDER AS IT WAS MADE U/S 143(1) AND HENCE THE INCOME HAS ESCAPED THE ATTENTION OF T HE AO. FURTHER IT WAS CLAIMED THAT THE APPELLANT HAS FILED A REVIS ED RETURN ON 28/04/03 BUT THE AO HAS NOT TAKEN ANY COGNITIONS OF SUCH RETURN. A REVISED RETURN CAN BE FILED ONLY U/S 139(5) OF THE ACT AND THE ESSENTIAL CONDITION FOR FILING REVISED RETURN IS TH AT THE ORIGINAL RETURN HAS TO BE FILED WITHIN THE MEANING OF SEC. 139(1) O R IN PURSUANCE OF NOTICE ISSUED U/S 142(1). ADMITTEDLY IN THE INSTANT CASE NONE OF THESE ESSENTIAL CONDITIONS PRECEDENT WAS SATISFIED. HERE THE ORIGIN AL RETURN WAS BELATEDLY FILED ON 17/01/03 ALTHOUGH THE DUE DATE FOR THE FILING RETURN U/S 139(1) WAS NOV 02. THE ORIGINAL RETURN BEING BELATEDLY FILED THE APPELLANT MISSED THE OPPORTUNI TY TO FILE A REVISED RETURN AND HENCE THE ACTION OF THE AO CANNOT BE CHA LLENGED ON THIS GROUND. 2.9 THE AO HAD MATERIAL FOR FORMING THE BELIEF TH AT THE APPELLANT HAS NOT DISCLOSED RS.30 00 000/- FROM 6 PERSONS(COMPANIES). THE FACT THAT THE AO COULD PRIMA-FACIE FORM SUCH A BELI EF WOULD ALSO BE EVIDENT FROM THE MATERIAL AVAILABLE ON RECORD. FURT HER IT HAS ALREADY BEEN STATED THAT THE ORDER U/S 143(1) OF THE ACT WA S CONSPICUOUSLY SILENT REGARDING THE SAID ISSUE AS THERE IS NO SUCH SCOPE IN 143(1). FROM THE ABOVE FACTS IT CANNOT BE SAID THAT THE AO HAD NO MA TERIAL FOR ENTERTAINING THE PRIMA-FACIE BELIEF THAT THE AP PELLANT COMPANY HAS DISCLOSED TRUE AND FULL INCOME FOR THE RELEVANT PERIOD. ACCORDINGLY THE AO HAS REASON TO BELIEVE THAT THER E WAS OMISSION OR FAILURE ON PART OF THE APPELLANT IN DISCLOSING FULLY AND TRULY THE CORRECT FACTS WHILE CONTENDING THAT THE COMPANY HAS NOT DISCLOSED INCOME RS.30 00 000I- FROM 6 PERSONS(COMPANIES). THE CONCLUSION FROM THE AFORESAID FACT IN THE RECORDED REASON THAT THE AMOUNT WAS NOT DISCLOSED AND CONSEQUENTLY INCOME HAS ESCAPED A SSESSMENT AND SUCH DECISION OF THE AO CANNOT BE FAULTED. ACCO RDINGLY THE CONTENTION THAT THERE WAS NO MATERIAL FOR FORMATION OF THE BELIEF AS POSTULATED U/S 147 TO RE-OPEN THE ASSESSMENT CANNOT BE SUSTAINED. I.T.A. NO.2756/DEL./2010 6 THE INITIATION OF PROCEEDING OF RELEVANT ASSESSMENT IS ACCORDINGLY UPHELD. 2.10 IN THE ASSESSMENT FOR THE RELEVANT YEAR THE AP PELLANT HAS NEVER DISCLOSED THE AMOUNT AND OFFERED THE SAME FOR TAXATION. THE RECORDED REASON HOWEVER IS THAT THE APPELLANT HAS I NTRODUCED UNACCOUNTED MONEY IN ITS BOOKS AND HENCE THE SAME SHOULD COME UNDER THE AMBIT OF INCOME UNDER UNEXPLAINED CASH CR EDIT. 2.11 THE ALLEGATION OF THE APPELLANT THAT THERE WAS NO POSITIVE INFORMATION IN THE POSSESSION OF THE AO IS NOT CORR ECT. IT IS A FACT THAT THE AO HAS RECEIVED INFORMATION FROM DIT(INVES TIGATION) NEW DELHI AND AFTER RECEIPT OF THE INFORMATION IT WAS H IS SATISFACTION THAT THE INCOME HAS ESCAPED ASSTT. AND HENCE THE SUBMISS ION OF THE APPELLANT ON THIS GROUND IS NOT SUSTAINABLE. FURTHE R THERE IS NO BAR IN THE ACT OR ANY OF THE CASES SO FAR REPORTED THAT THE AO CANNOT RECEIVE INFORMATION FROM DIT(INV). THE ONLY THING I S TO BE SEEN THAT IT SHOULD BE HIS SATISFACTION AND THAT OF NOBODY EL SE. THE NEXT ARGUMENT WAS TAKEN THAT NO BACK MATERIAL WAS SUPPLI ED. FIRST OF ALL THIS GROUND IS NET CORRECT IN AS MUCH AS THE SATISFACTION OF THE AO IS HIS OWN AND ONCE AFTER RECEIPT OF INFORMATION FROM DIT(INV) HE WAS SATISFIED AND THE PROCEEDING WAS DRAWN. THERE IS NO EVIDENCE ON RECORD TO SUGGEST THAT SUCH BACK MATERIAL W AS ASKED FOR BY THE APPELLANT AND THE SILENCE ON PART OF THE APPELLANT CANNOT BE CONSTRUED AS A FATAL LAPSE ON PART OF THE DEPTT. I N THIS PARTICULAR FACT OF THE CASE THERE IS NO REQUIREMENT OF SUPPLY ING ANY BACK MATERIAL AND TO THAT EXTENT THE SUBMISSION OF THE A PPELLANT IS NOT RELIABLE. NEITHER THERE IS ANY EVIDENCE ON RECORD WHICH SUGGESTS THAT SUCH DOCUMENTS WERE EVER ASKED BY THE APPELLAN T. FURTHER IT HAS TO BE REMEMBERED THAT A PROCEEDINGS FOR ASSTT. UNDER A FISCAL STATUTE ARE NOT IN THE NATURE OF JUDICIAL PROCEEDIN GS EXERCISE OF JURISDICTION EVEN IN A WRONG FULL MANNER CANNOT VES T IN NULLITY. IT IS A CURABLE DEFECT. DEEPAK AGRO FOODS VS. STATE OF RAJ ASTHAN & ORS. (S.C.) 2008 TIOL- 134-SUPREME COURT CITY. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR ON BEHALF OF THE ASSESSEE WHILE CARRYING US THROUGH THE IMPUGNED ORDER RELIED UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HARYANA ACRYLIC MFG. CO. VS. CIT 308 ITR 38(DEL.) FOLLOWED BY A CO-ORDINATE BENCH IN ORDER DATED 14.0 1.2011 IN THE CASE OF SHRI BALWANT RAI WADHWA VS. INCOME TAX OFFICER IN I.T.A. NO.4806/D/2010 AS ALSO ON THE DECISION IN SARTHAK SECURITIES CO. (P) LTD. VS . ITO 329 ITR 110(DEL.). ON THE OTHER HAND THE LD. DR WHILE DISTINGUISHING THE DEC ISION IN THE CASE OF BALWANT I.T.A. NO.2756/DEL./2010 7 RAI WADHWA RELIED UPON THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF GKN DRIVE SHAFT REPORTED IN 259 ITR 19 AND DECISION IN AGR INVESTMENT LTD. VS. ADDL. CIT 333 ITR 146(DEL.) IN SUPPORT OF VALIDITY OF REOPENING OF THE ASSESSMENT BESIDES DECISION DATED 15 TH FEBRUARY 2012 OF THE HONBLE DELHI HIGH COURT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. IN I.T.A . NO.342 OF 2011. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE AS ALSO THE DECISIONS RELIED UPON BY BOTH THE SIDES. T HE FIRST ISSUE BEFORE US IS REGARDING VALIDITY OF INITIATION OF REASSESSMENT PR OCEEDINGS ON BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING THAT THE ASSESSEE RECEIVED CERTAIN AMOUNT THROUGH PERSONS WORKING AS AN ACCOMMODATIO N ENTRY PROVIDERS FROM ROYAL CREDITS P. LTD. SUMA FINANCE & INVESTMENT LT D. AMBA ALLOYS P. LTD. LANDMARK COMMUNICATIONS P. LTD. ENPOL P. LTD. & DI NANATH LATHURIWALA. INDISPUTABLY ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(1) OF THE ACT IN PURSUANCE TO RETURN FILED ON 17.1.2003.SUBSE QUENTLY AFTER RECORDING AFORESAID REASONS EXTRACTED IN PARA 2 ABOVE THE AO ISSUED A NOTICE U/S 148 OF THE ACT ON 23.3.2009 WHICH ACCORDING TO THE ASSESS EE WAS SERVED UPON THEM ONLY ON 31.3.2009.THERE IS NOTHING TO SUGGEST THAT THE REASONS RECORDED BY THE AO BEFORE ISSUE OF NOTICE U/S 148 OF THE ACT WERE SERVED UPON THE ASSESSEE ALONG WITH THE NOTICE. RATHER THE AO OBSERVED IN T HE ASSESSMENT ORDER THAT REASONS WERE SUPPLIED DURING THE COURSE OF REASSES SMENT PROCEEDINGS. INDISPUTABLY THE REASONS WERE NOT SUPPLIED TO THE ASSESSEE BY 31ST MARCH 2009 I.E. WITHIN A PERIOD OF 6 YEARS FROM THE END OF THE ASSESSMENT YEAR. THE CRUX OF THE ISSUE BEFORE US IS AS TO WHETHER NOTICE ISSUE D U/S 148 OF THE ACT HAS BEEN VALIDLY SERVED UPON THE ASSESSEE WITHIN THE LIMITATION PRO VIDED U/S 149 (1) (B) OF THE ACT. IN TERMS OF THE SAID PROVISIONS TH E NOTICE HAS TO BE SERVED WITHIN 6 YEARS FROM THE END OF THE ASSESSMENT YEAR. THE CONTENTION OF THE ASSESSEE BEFORE US IS THAT HONBLE DELHI HIGH COURT IN HARYANA ACRYLIC MANUFACTURING CO.(SUPRA) HELD THAT IF THE REASONS R ECORDED BY THE AO FOR REOPENING OF ASSESSMENT HAVE NOT BEEN SUPPLIED OR S ERVED WITHIN 6 YEARS THEN NO VALID NOTICE COULD BE SAID TO BE SERVED UP ON THE ASSESSEE WITHIN 6 I.T.A. NO.2756/DEL./2010 8 YEARS. IN THIS CONNECTION WE MAY REFER TO THE FOLL OWING OBSERVATIONS OF THE HONBLE JURISDICTIONAL HIGH COURT :- 24. THIRDLY IT COULD BE ARGUED THAT THE REASON S SUPPLIED TO THE PETITIONER IN SEPTEMBER 2004 BE DISREGARDED SO ALSO THE OBJECTIO NS FILED BY IT AS ALSO THE IMPUGNED ORDER DATED 2-3-2005 AND THE REASONS NOTED IN THE SAID FORM BE NOW TAKEN AS THE REASONS FOR THE ISSUANCE OF THE NOTICE UNDER SECTION 148 AND THE PETITIONER MAY NOW PREFER HIS OBJECTIONS IF ANY A ND THEREUPON THE ASSESSING OFFICER BE DIRECTED TO PASS A SPEAKING ORDER. IN OT HER WORDS SUCH AN ARGUMENT REQUIRES US TO SWEEP ALL THE PROCEEDINGS EMANATING FROM THE SUPPLY OF REASONS IN SEPTEMBER 2004 AND CULMINATING IN THE PASSING OF TH E ORDER DATED 2-3-2005 'UNDER THE CARPET' AS IT WERE. AND STARTING THE P ROCESS AS PER THE DIRECTIONS GIVEN IN GKN DRIVESHAFTS (INDIA) LTD.'S CASE AFRESH CONSIDERING THE REASONS NOTED IN THE SAID FORM TO BE THE ACTUAL REASONS FOR THE ISSUANCE OF THE NOTICE UNDER SECTION 148. IF WE WERE TO ACCEPT THIS ARGUME NT WE WOULD HAVE TO IGNORE THE DIRECTIONS GIVEN BY THE SUPREME COURT IN GKN DR IVESHAFTS (INDIA) LTD.'S CASE THAT THE ASSESSING OFFICER IS BOUND TO FURNISH REAS ONS WITHIN A REASONABLE TIME. THE NOTICE UNDER SECTION 148 WAS ISSUED ON 29-3-200 4. THE PETITIONER FILED THE RETURN AND SOUGHT REASONS BY ITS LETTER DATED 11-5- 2004. IF THE DATE OF FILING OF THE COUNTER-AFFIDAVIT IN THIS WRIT PETITION IS TAKEN AS THE DATE OF COMMUNICATION OF THE REASONS WHICH FORMS PART OF THE SAID FORM A COPY O F WHICH IS ANNEXURE-A TO THE COUNTER-AFFIDAVIT THEN THE DATE OF SUPPLY OF REASO NS BASED ON THIS ARGUMENT WOULD BE 5-11-2007. THIS IMMEDIATELY MAKES IT CLEAR THAT THE ASSESSING OFFICER WHO WAS BOUND TO FURNISH HIS REASONS WITHIN A REASO NABLE TIME DID NOT DO SO. THE PERIOD WHICH ELAPSED BETWEEN 11-5-2004 WHEN TH E PETITIONER MADE THE REQUEST FOR COMMUNICATING THE REASONS AND 5-11-200 7 THE DATE WHEN THE COUNTER-AFFIDAVIT WAS FILED CAN CERTAINLY NOT BE R EGARDED AS A REASONABLE PERIOD OF TIME. APART FROM THIS WE MUST NOT FORGET THE PROVISIONS OF SECTION 149 WHICH PRESCRIBES THE TIME-LIMIT FOR A NOTICE UNDER SECTION 148. SECTION 149(1)(B) STIPULATES THE OUTER LIMIT OF SIX YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR WHERE THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO AMOUNT TO RUP EES ONE LAKH OR MORE FOR THAT YEAR. THIS MEANS THAT A NOTICE UNDER SECTI ON 148 IN THE PRESENT CASE COULD NOT IN ANY EVENT HAVE BEEN ISSUED AFT ER SIX YEARS FROM THE END OF THE ASSESSMENT YEAR 1998-99 I.E. AFTER 31-3-20 05. IN WHICHEVER WAY WE LOOK AT IT A NOTICE UNDER SECTION 148 WITHOUT THE COMMUNICATION OF THE REASONS THEREFOR IS MEANINGLESS INASMUCH AS THE ASSESSING O FFICER IS BOUND TO FURNISH THE REASONS WITHIN A REASONABLE TIME. IN A CASE WH ERE THE NOTICE HAS BEEN ISSUED WITHIN THE SAID PERIOD OF SIX YEARS BUT THE REASONS HAVE NOT BEEN FURNISHED WITHIN THAT PERIOD IN OUR VIEW ANY PROC EEDINGS PURSUANT THERETO WOULD BE HIT BY THE BAR OF LIMITATION INASMUCH AS THE ISS UANCE OF THE NOTICE AND THE COMMUNICATION AND FURNISHING OF REASONS GO HAND-IN- HAND. THE EXPRESSION 'WITHIN A REASONABLE PERIOD OF TIME' AS USED BY THE SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LTD.'S CASE CANNOT BE STRETCHED TO SUCH AN EXTENT THAT IT EXTENDS EVEN BEYOND THE SIX YEARS STIPULATED IN SEC TION 149. FOR THIS REASON I.T.A. NO.2756/DEL./2010 9 ALSO EVEN ASSUMING THAT WE OVERLOOK ALL THAT HAS H APPENED BETWEEN 11-5-2004 WHEN THE PETITIONER SOUGHT THE REASONS AND 5-11-20 07 WHEN THE SAID FORM ANNEXED TO THE COUNTER-AFFIDAVIT WAS FILED IN THIS COURT THE VALIDITY OF THE NOTICES UNDER SECTION 148 ISSUED ON 29-3-2004 AND ANY PROCE EDINGS PURSUANT THERETO CANNOT BE UPHELD. 5.1 IN THE AFORESAID DECISION DECISION OF THE HONBLE APEX COURT IN GKN DRIVESHAFTS (INDIA) LIMITED VS- INCOME TAX OFFICER (2003) 1 SCC 72 WAS APPLIED TO EMPHASISE THE FACT THAT THE REASONS SHOULD HAVE BEEN FURNISHED WITHIN A REASONABLE TIME. IT WAS CLARIFIED THAT WHERE THE N OTICE HAS BEEN ISSUED WITHIN THE SAID PERIOD OF SIX YEARS BUT THE REASONS HAVE NOT BEEN FURNISHED WITHIN THAT PERIOD ANY PROCEEDINGS PURSUANT THERETO WOULD BE H IT BY THE BAR OF LIMITATION INASMUCH AS THE ISSUANCE OF THE NOTICE AND THE COM MUNICATION AND FURNISHING OF REASONS GO HAND-IN-HAND. THE EXPRESSION WITHIN A REASONABLE PERIOD OF TIME AS USED BY THE HONBLE SUPREME COURT IN GKN DRIVESHAF TS (SUPRA) COULD NOT BE STRETCHED TO SUCH AN EXTENT THAT IT EXTENDS EVEN BE YOND THE SIX YEARS STIPULATED IN SECTION 149 HONBLE HIGH COURT CONCLUDED.THE AF ORESAID DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT HAS BEEN FOLLOWED BY A CO-ORDINATE BENCH IN THEIR DECISION DATED 14.1.2011 IN THE CASE OF SHRI BALWANT RAI WADHWA VS. ITO IN ITA NO.4806/DEL./2010 FOR THE AY 2001-02. IN THE LI GHT OF VIEW TAKEN IN THESE DECISIONS IT IS APPARENT THAT ISSUE OF THE NOTIC E U/S 148 OF THE ACT AND THE COMMUNICATION OF REASONS HAVE TO BE WITHIN THE ST IPULATED PERIOD OF SIX YEARS. IF IT HAS NOT BEEN DONE THEN VALIDITY OF NOTICE ISSUE D U/S 148 COULD NOT BE UPHELD.. IN VIEW OF THE FOREGOING FOLLOWING THE VIEW TAKEN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THEIR AFORESAID DECISION WE HAVE NO HESITATION IN VACATING THE FINDINGS OF THE LD. CIT(A) ON THE ISSUE AND ALLOWIN G GROUND NO.1 IN THE APPEAL. AS A COROLLARY THE REMAINING GROUNDS RAISED IN THIS APPEAL DO NOT SURVIVE FOR OUR ADJUDICATION AND ARE THEREFORE TREATED AS INFRU CTUOUS 6. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND IN THE APPEAL ACCORDINGLY THIS GROUND IS DISMISSED. 7.. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US . I.T.A. NO.2756/DEL./2010 10 8. IN THE RESULT APPEAL IS ALLOWED. SD/- SD/- (DIVA SINGH) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. SHAGUN IMPEX PVT. LTD. (NOW KNOWN AS ARKAAY I MPEX P. LTD.) 12- 3 RD FLOOR VASANT ARCADE VASANT KUNJ NEW DELHI 2. INCOME TAX OFFICER WARD 8(1) C.R. BUILDING N EW DELHI 3. CIT CONCERNED 4.CIT(A) XI NEW DELHI 5. DR ITAT G BENCH NEW DELHI 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT DELHI ORDER PRONOUNCED IN OPEN COURT