ITO, New Delhi v. M/s. Ritwik Fincon (P) Ltd, New Delhi

ITA 3116/DEL/2009 | 2001-2002
Pronouncement Date: 12-01-2010 | Result: Dismissed

Appeal Details

RSA Number 311620114 RSA 2009
Assessee PAN AAACR2064M
Bench Delhi
Appeal Number ITA 3116/DEL/2009
Duration Of Justice 6 month(s) 5 day(s)
Appellant ITO, New Delhi
Respondent M/s. Ritwik Fincon (P) Ltd, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 12-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 12-01-2010
Date Of Final Hearing 12-01-2010
Next Hearing Date 12-01-2010
Assessment Year 2001-2002
Appeal Filed On 07-07-2009
Judgment Text
ITA NO. 3116/DEL/09 A.Y. 2001-02 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO. 3116/DEL/2009 A.Y. : 2001-02 INCOME TAX OFFICER VS. M/S RITWIK FINCON P LT D. WARD 15(4) NEW DELHI 306 RG COMPLEX SECTOR- 8 ROHINI DELHI-85 (PAN : AAACR 2064 M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH ADV. DEPARTMENT BY : SHRI ISTIYAQUE AHMED SR. DR O R D E R PER SHAMIM YAHYA : AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDERS OF THE LD. CIT(A) DATED 25.3.2009 PERTAINING TO ASSESS MENT YEAR 2001- 02. 2. THE FIRST ISSUE RAISED IS THAT LD. CIT(A) ERRED IN QUASHING THE ASSESSMENT ORDER HOLDING THE SERVICE OF NOTICE ISSU ED UNDER SECTION 148 AS INVALID. 3. IN THIS CASE THE RETURN WAS ORIGINALLY PROCESSED UNDER SECTION 143(1) AND SUBSEQUENTLY NOTICE UNDER SECTION 148 OF THE IT ACT WAS ISSUED TO THE ASSESSEE ON 17.3.2008. AS PER THE AO THIS WAS DULY ITA NO. 3116/DEL/09 A.Y. 2001-02 2 SERVED UPON THE ASSESSEE ON 20.3.2008 PERSONALLY. FURTHER AO OBSERVED THE FOLLOWING AS PER PARA 2 OF THE ASSESS MENT ORDER. THE ABOVE SAID NOTICE WAS SERVED ON THE ASSESSEE F IRST BY POSTAL SERVICES; AT THE ADDRESS ON THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERAT ION I.E. AT 210 MOHAN PLACE SARASWATI VIHAR NEW DELHI T HE PROOF IS PLACED ON RECORD. THE SAID NOTICE WAS REC EIVED BACK WITH POSTAL REMARKS NO SUCH FIRM IN ADDRESS . THEN THE NOTICE WAS SERVED BY THE NOTICE SERVER BY AFFIXTURE AND LATER ON ON 20.03.2008 PERSONALLY TO SH. SANJAY KUMAR AT THE LAST ADDRESS GIVEN BY THE ASSES SEE IN ITS RETURN OF INCOME FILED WHO ACCEPTED THE NOT ICE ON BEHALF OF THE ASSESSEE COMPANY MAKING THE SERVICE OF NOTICE VALID. 3.1 ASSESSEES OBJECTION AS TO VALIDITY OF NOTICE WAS REJECTED BY THE AO. 3.2 BEFORE THE LD. CIT(A) ASSESSEE INTER-ALIA CHAL LENGED THE VALIDITY OF SERVICE OF NOTICE. LD. CIT(A) ELABORATELY CONS IDERED THE ISSUE AND HELD AS UNDER:- THE FIRST ISSUE RAISED BY THE APPELLANT ASSESSEE I S THAT NOTICE U/S 148 HAS NOT BEEN SERVED. I HAVE GONE THROUGH T HE RECORDS. IN THIS REGARD THE FACTS BORNE ON THE REC ORD ARE THAT THE ORIGINAL NOTICE ISSUED BY THE LD. AO U/S 148 HA S NOT BEEN APPARENTLY SERVED UPON THE ASSESSEE COMPANY. LD. A O HAD ISSUED THIS NOTICE ON SOME OTHER ADDRESS AND IT HAS BEEN CLAIMED BY AO TO HAVE BEEN SERVED UPON ONE MR. SATI SH KUMAR. BUT APPELLANT ARGUED THAT LD. AO HAS FAILED TO BRING ON RECORD ANY DESCRIPTION OF PROPER IDENTITY OF TH IS PERSON AND ITA NO. 3116/DEL/09 A.Y. 2001-02 3 HIS RELATIONSHIP WITH THE APPELLANT ASSESSEE COMPAN Y. THE ASSESSEE UNDER CONSIDERATION IS A REGISTERED COMPAN Y AND AS PER AS CONTAINED IN SECTION 282 OF INCOME TAX ACT 1961 READ WITH THE RELEVANT PROVISIONS OF ORDER 5 OF CIVIL PR OCEDURE CODE 1908 THE NOTICE COULD HAVE BEEN SERVED EITHER ON TH E PRINCIPAL OFFICER OR THE DIRECTOR OF THE ASSESSEE COMPANY OR ANY DULY AUTHORIZED AGENT OF THE ASSESSEE COMPANY. THEREFOR E ANY SERVICE OF THE MANDATORY NOTICE TO UNAUTHORIZED PER SON CANNOT BE VALID SERVICE IN THE EYES OF LAW. NOTICE U/S 14 8 WAS BEARING ADDRESS OF THE ASSESSEE AS M/S RITVIK FINCON PVT L TD 210 MOHAN PLACE SARASWATI VIHAR NEW DELHI. AS PER RECORDS IN THE RECENT PAST BEFORE ISSUING NOTICE U/S 148 THE LD. AO HAS BEEN MAKING CORRESPONDENCE WITH THE ASSESSEE BY WAY OF ORDERS U/S. 143(1) AND ALSO SHOW CAUSE NOTICE FOR I NITIATION OF PENALTY PROCEEDINGS U/S 272B AT THE NEW ADDRESS I.E . RITVIK FINCON PVT. LTD. D-1/603 PRINTERS APARTMENT SECT OR-13 ROHINI DELHI 110085. THE ASSESSEE HAS BEEN FILI NG ALL THE INCOME TAX RETURNS OF THE SUBSEQUENT ASSESSMENT YEA RS AT ITS ABOVE SAID ROHINI ADDRESS ONLY. THUS THIS ADDRE SS OF ROHINI WAS IN THE KNOWLEDGE OF THE LD. AO AND AS PER LAW THE NOTICE SHOULD BE SENT ON THE LAST KNOWN ADDRESS OF THE ASSESSEE WHICH HAS NOT BEEN DONE INTHIS CASE. THUS ISSUANCE OF NOTICE AT STALE ADDRESS CANNOT LEAD TO PRESUMPTI ON OF VALID SERVICE. THUS THE SERVICE OF ORIGINAL NOTICE ISSUE D U/S 148 CANOT BE UPHELD AS VALID. I HAVE FURTHER SEEN IN THE ASSESSMENT ORDER THAT THE LD. AO HAS CONTENDED IN THE ITA NO. 3116/DEL/09 A.Y. 2001-02 4 ASSESSMENT ORDER THAT THE LD. AO HAS PROVIDED A PHO TOCOPY OF THE NOTICE U/S 148 DATED 17.3.2008 VIDE HIS LETTER DATED 21.10.2008. THUS ACCORDING TO LD. AO GRIEVANCE OF THE ASSESSEE WAS MET BY THE LD. AO BY PROVIDING PHOTOCO PY OF THE NOTICE EARLIER ISSUED BY HIM. THUS ACCORDING TO LD. AO CONTENTION OF THE ASSESSEE THAT IMPUGNED PROCEEDING S COULD NOT SURVIVE FOR WANT OF VALID SERVICE OF NOTICE WAS NOT SUSTAINABLE AND THE SAME WAS THEREFORE REJECTED BY HIM ON THIS GROUND. I HAVE CONSIDERED THIS ASPECT OF THE MATER ALSO. ACCORDING TO LAW THE NOTICE HAS TO BE ISSUED WITHIN THE PRESCRIBED TIME LIMIT AND THE SAME HAS TO BE SERVED UPON THE ASSESSEE IN ACCORDANCE WITH LAW. IN CASE THE ORIG INAL NOTICE NOT SERVED AS PER LAW THIS REQUIREMENT OF LAW CANN OT BE SUBSTITUTED BY SUBSEQUENTLY PROVIDING PHOTOCOPY OF THE NOTICE AFTER CONSIDERABLE LAPSE OF TIME THAT TOO AFTER THE REPEATED OBJECTIONS FROM THE SIDE OF THE ASSESSEE. THE PR OVIDING OF THE PHOTOCOPY OF THE NOTICE CANNOT SUBSTITUTE AND IS NO T EQUIVALENT TO SERVICE OF NOTICE UPON THE ASSESSEE I N ACCORDANCE WITH LAW AND IN A PRESCRIBED MANNER. THUS IN TH E TOTALITY OF THE FACTS OF THE CASE I HAVE NO OPTION BUT TO HOLD THAT NOTICE U/S 148 WAS NOT SERVED UPON THE ASSESSEE IN ACCORDA NCE WITH LAW. IT IS WELL SETTLED LAW THAT THE BURDEN TO P ROVE SERVICE OF NOTICE IS UPON THE REVENUE. THIS BURDEN BECOMES HEAVIER WHEN THE ASSESSEE RAISES OBJECTION AT THE EARLIEST STAGE ABOUT NON SERVICE OF NOTICE. SERVICE OF NOTICE U/S 148 IS MANDATORY TO ENABLE LD. AO TO FRAME THE REASSESSMENT ORDER. I DERIVE ITA NO. 3116/DEL/09 A.Y. 2001-02 5 SUPPORT FROM VARIOUS JUDGEMENT OF VARIOUS HIGH COUR T AND VARIOUS BENCHES OF HONBLE INCOME TAX APPELLATE TR IBUNAL WHICH HAVE BEEN RELIED BY LD. COUNSEL BEFORE ME. I N PARTICULAR I RELY UPON THE JUDGEMENT OF JURISDICTIONAL HIGH C OURT I.E. DELHI HIGH COURT IN THE CASE OF CIT V. HOTLINE INT ERNATIONAL PVT LTDF. 296 ITR 333/161 TAXMAN 104 (DEL) AND CIT VS. LAXMINARAYAN 168 TAXMAN 128 (P&H). I ALSO RELY UPO N THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN CASE OF C IT VS. RAJESH SHARMA 165 TAXMAN 488. I FURTHER RELY UPON THIRD MEMBER JUDGEMENT OF HONBLE INCOME TAX APPELLATE TR IBUNAL IN THE CASE OF ACIT VS. VINDHYA TELELINKS LTD. 107 TTJ 149 (JAB) TM; IN WHICH IT HAS BEEN HELD BY THE HONBLE BENCH THAT THE SERVICE DONE AT THE INCORRECT ADDRESS CANNOT BE TAKEN AS A VALID SERVICE AND HAS BEEN FURTHER HELD THAT SERVIC E OF NOTICE U/S 148 WAS A PRECONDITION FOR ASSUMING JURISDICTI ON FOR FRAMING REASSESSMENT AND SERVICE OF COPY OF NOTIC E DURING REASSESSMENT PROCEEDINGS CANNOT BE SAID TO THE VALI D SERVICE OF NOTICE. THE THIRD MEMBER JUDGEMENT HAS THE SA ME BINDING FORCE AS THAT OF SPECIAL BENCH. THUS THE REASSESSMENT ORDER FRAMED BY THE LD. AO WITHOUT ASS UMING JURISDICTION AS PER LAW DESERVES TO THE QUASHED ON THIS GROUND ITSELF. 4. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BE FORE US. 5. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND IT IS THE CASE OF THE ASSESSEE THAT ASSESSE E HAD DULY ITA NO. 3116/DEL/09 A.Y. 2001-02 6 CHANGED THE ADDRESS AND INTIMATED THE SAME TO THE D EPARTMENT AND THE DEPARTMENT WAS IN CORRESPONDENCE WITH THE ASSES SEE ON THE SAID NEW ADDRESS. THE IMPUGNED NOTICE WAS SERVE D BY SPEED POST ON THE OLD ADDRESS. SINCE THE ASSESSEE HA D ALREADY CHANGED THE ADDRESS THE SAID NOTICE WAS RECEIVED BACK UNSE RVED. THE SAID NOTICE THEREAFTER WAS SERVED UPON BY THE NOTICE SER VER OF THE DEPARTMENT TO ONE SHRI SATISH KUMAR WITHOUT ANY ENQ UIRY AS TO HIS IDENTITY. LD. CIT(A) HAS NOTED THAT ASSESSEE BEING THE COMPANY NOTICE SHOULD HAVE BEEN EITHER SERVED EITHER TO PRI NCIPAL OFFICER OR THE DIRECTOR OF THE ASSESSEE COMPANY OR ANY DULY AU THORIZED AGENT OF THE ASSESSEE COMPANY. THE REVENUE IS NOT IN A P OSITION TO ESTABLISH THE IDENTITY OF MR. SATISH KUMAR UPON WH OM THE NOTICE SERVER HAD REPORTEDLY SERVED THE NOTICE. THE COPI ES BY POST WAS GIVEN AT THE ADDRESS OF THE ASSESSEE M/S RITWIK FI NCON PVT LTD.. 2010 MOHAN PLACE SARASWATI VIHAR NEW DELHI. HOWE VER THE ASSESSEE HAS CHANGED THE ADDRESS AND THE SAME WAS I NFORMED TO THE DEPARTMENT AND THE DEPARTMENT WAS IN CORRESPOND ENCE WITH THE ASSESSEE AT THE NEW ADDRESS I.E. RITWIK FINCON PVT . LTD. D-1/604 PRINTERS APARTMENT SECTOR-13 ROHINI DELHI -85. UNDER THE CIRCUMSTANCES THERE IS NO JUSTIFICATION OF SENDING THE NOTICE BY POST AT THE OLD ADDRESS. OBSERVATION OF THE AO THAT COP Y OF THE NOTICE WAS GIVEN DURING THE ASSESSMENT HAS RIGHTLY BEEN HE LD BY THE LD. CIT(A) AS TO NOT CONFERRING JURISDICTION. IN THIS REGARD THE CASE LAW REFERRED BY THE LD. CIT(A) AS ABOVE ARE ALSO GERMAN E AND SUPPORT THE CASE OF THE ASSESSEE. HONBLE JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS. HOTLINE INTERNATIONAL PVT. LTD. 296 ITR 333 HAS HELD ITA NO. 3116/DEL/09 A.Y. 2001-02 7 THAT SECTION 282 OF THE INCOME TAX ACT 1961 LAYS D OWN THE MODE OF SERVICE OF NOTICES. ACCORDING TO IT ANY NOTICE UN DER THE INCOME TAX ACT HAS TO BE SERVED ON THE PERSON NAMED THEREIN EI THER BY POST OR SUMMONS ISSUED BY THE COURT UNDER THE CODE OF CIVIL PROCEDURE 1908 ORDER V RULE 19A OF THE CODE OF CIVIL PROCEDU RE PROVIDES FOR SIMULTANEOUS SERVICE BY POST IN ADDITION TO PERSONA L SERVICE. SINCE THE SERVICE IN THIS CASE HAS NOT BEEN DONE AS DISCU SSED ABOVE WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDE R OF THE LD. CIT(A) HENCE WE AFFIRM THE SAME. 6. SINCE WE HAVE AFFIRMED THE ACTION OF THE LD. CIT (A) IN QUASHING THE ASSESSMENT ITSELF THE ADJUDICATION ON MERITS O F THE CASE IS NOW ONLY AN ACADEMIC ISSUE AND AS SUCH WE ARE NOT DEAL ING WITH THE SAME. 7. IN THE RESULT THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 12/01/2010. SD/- SD/- [C.L. SETHI) [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 12 /01/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES