ITO, New Delhi v. M/s. Gold Coin Investment Co. Ltd., New Delhi

ITA 3548/DEL/2013 | 2004-2005
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 354820114 RSA 2013
Assessee PAN AAACG0888K
Bench Delhi
Appeal Number ITA 3548/DEL/2013
Duration Of Justice 2 year(s) 1 month(s) 27 day(s)
Appellant ITO, New Delhi
Respondent M/s. Gold Coin Investment Co. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-07-2015
Date Of Final Hearing 08-07-2015
Next Hearing Date 08-07-2015
Assessment Year 2004-2005
Appeal Filed On 03-06-2013
Judgment Text
1 ITA NO. 3548/DEL/13 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SMT DIVA SINGH JUDICIAL MEMBER AND SH. N. K. SAINI ACCOUNTANT MEMBER I.T.A .NO. -3548/DEL/2013 (ASSESSMENT YEA R-2004-05) ITO WARD-12 (2) C. R. BUILDING NEW DELHI (APPELLANT) VS GOLD COIN INVESTMENT CO. LTD. 1004A CHIRANJIV TOWER 43 NEHRU PLACE. NEW DELHI AAACG0888K (RESPONDENT) APPELLANT BY SH. T. VASANTHAN SR. DR RESPONDENT BY SH. S. K. SARAF CA ORDER PER DIVA SINGH JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 25/3/2013 OF CIT(A) XV NEW DELHI PERTAINING TO 2004-05 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN QUASHING THE RE-ASSESSMENT ORDER AS BAD IN LAW DESPITE THE FACT THAT THE REASSESSMENT PROCEEDINGS WERE INITIAT ED ON THE BASIS OF CREDIBLE AND TANGIBLE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT. IN SIMILAR CIRCUMSTANCE T HE HONBLE DELHI HIGH COURT IN VARIOUS RECENT JUDICIAL PRONOUNCEMENT S HAS UPHELD THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING REGARD ING ACCOMMODATION ENTRY PROVIDERS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN QUASHING THE RE-ASSESSMENT ORDER AS BAD IN LAW ON THE BASIS THAT THE AO HAS ISSUED THE NOTICE U/S 148 AT OLD ADDRESS BUT IGNORED FACT THAT THE NOTICE WAS SERVED VALIDLY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN QUASHING THE RE-ASSESSMENT ORDER AS BAD IN LAW DESPITE THE FACT THAT THE AO HAS PASSED THE SPEAKING ASSESSMENT ORDER. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.32 00 000/- U/ S 68 OF THE ACT DESPITE THE SETTLED POSITION OF LAW THAT THE ONUS I S ON THE ASSESSEE TO DATE OF HEARING 08.07.2015 DATE OF PRONOUNCEMENT 31 .07.2015 2 ITA NO. 3548/DEL/13 ESTABLISH THE IDENTITY CREDITWORTHINESS AND GENUIN ENESS OF THE TRANSACTION IGNORING THE FACT THAT THE ASSESSEE CO ULD NOT BE ABLE TO FURNISH EVEN ONE BASIC DOCUMENT I.E ORIGINAL COPY O F CONFIRMATION OF CREDITORS. 5. THE APPELLANT CRAVES TO ADD ALTER AMEND MODIF Y ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING THE H EARING OF THIS APPEAL. 2. THE RELEVANT FACTS OF THE CASE AS EMANATING FROM THE ASSESSMENT ORDER DATED 30 TH DECEMBER 2011 U/S 143(3)/147 OF THE INCOME TAX ACT 1961 ARE THAT THE ASSESSEE DECLARED AN INCOME OF RS. 14 140/- BY WAY OF ITS RE TURN ON 1/11/2004. THE SAID RETURN WAS PROCESSED U/S 143(1). THE ASSESSEES CA SE WAS REOPENED U/S 147/148 BASED ON THE INFORMATION RECEIVED FROM THE OFFICE O F THE DIRECTORATE OF INCOME TAX (INVESTIGATION) DELHI NEW DELHI ABOUT THE COMPANI ES WHO WERE INVOLVED IN TAKING /DEALING ACCOMMODATION ENTRIES FOR UNACCOUNTED MONE Y. AS PER THE REPORT SENT BY THE INVESTIGATION WING THE ASSESSEE COMPANY WAS ONE OF THE COMPANIES WHICH HAD TAKEN ACCOMMODATION ENTRY FOR ITS UNACCOUNTED MONEY IN THE YEAR UNDER CONSIDERATION. 2.1 IN VIEW THEREOF THE CASE WAS REOPENED AND NOTIC E WAS SENT TO THE ASSESSEE U/S 148 DATED 18/3/2011 AT THE ADDRESS MENTIONED IN THE ITR (INCOME TAX RETURN). SINCE IN RESPONSE TO THE SAME NO REPLY WAS RECEIVED THERE FORE NOTICE U/S 142(1) ETC WAS SENT DATED 08/08/2011 TO THE ASSESSEE REQUIRING THE ASSE SSEE TO ATTEND THE ASSESSING OFFICER OFFICE ON 18/8/2011. 2.2 ON THE SAID DATE THE ASSESSEE WAS REPRESENTED T HROUGH ITS COUNSEL AND REQUESTED FOR COPY OF NOTICE U/S 148. THE SAID ORAL REQUEST RECORDED IN THE ASSESSMENT ORDER WAS FOLLOWED UP BY LETTER DATED 29/8/2011 REC EIVED BY SPEED POST REQUESTING THE ASSESSING OFFICER AGAIN TO PROVIDE CERTAIN DOCUMENT S INCLUDING CERTIFIED COPY OF REASONS RECORDED FOR INITIATION OF PROCEEDINGS U/S 148. AS A RESULT NOTICE U/S 142(1) DATED 28/11/2011 ALONG WITH COPY OF REASONS RECORDE D WAS ISSUED TO THE ASSESSEE AT THE ADDRESS 1004-A CHIRINJIV TOWER NEHRU PLACE NE W DELHI REQUIRING THE ASSESSEE TO EXPLAIN WHY ADDITION OF RS.32 LACS SHOULD NOT BE MA DE IN THE HANDS OF THE ASSESSES. THE FOLLOWING DETAILS OF 32 LACS AS PER THE INFORMA TION RECEIVED FROM THE DIT (INVESTIGATION NEW DELHI) WERE COMMUNICATED TO THE ASSESSEE:- 3 ITA NO. 3548/DEL/13 VALUE OF ENTRY TAKEN DATE OF ENTRY FROM WHOM TAKEN INSTRUMENT NO. RS. 4 00 000 27/9/2003 M/S SAURABH PETROCHEM (P) LT D. (A/C NO. 3381 JAILAXMI COOP. BANK FATEHPURI DELHI) 268111 3 00 000 27/9/2003 M/S PROFAN FINANCE & INVESTMENTS (A/C NO. 3355 JAILAXMI COOP. BANK FATEHPURI DELHI) 376237 5 00 000 6/11/2003 M/S GREAT MASTER VOICE (INDIA ) PVT. LTD.(A/C NO. 3547 JAILAXMI COOP BANK FATEHPURI DELHI) 402559 5 00 000 6/11/2003 M/S GANESH CYCLE STORES (P) LTD. (A/C NO. 3451 JAILAXMI COOP BANK FATEHPURI DELHI) 517790 5 00 000 13/11/2003 M/S SURAJ CYCLE MART PVT. LTD. (A/C NO. 3450 JAILAXMI COOP BANK FATEHPURI DELHI) 403563 5 00 000 11/9/2003 SHRI RAMESH CHAND (A/C NO. 16083 JAILAXMI COOP BANK FATEHPURI DELHI) 173914 5 00 000 24/9/2003 M/S ACOOT INDIA PVT. LTD. (A/C N O. 3365 JAILAXMI COOP BANK FATEHPURI DELHI) 267960 2.3 THE SAID NOTICE ALONG WITH ENCLOSURE AS PER THE ASSESSMENT ORDER RETURNED UNDELIVERED WITH THE REMARK NO SUCH FIRM. HOWEVE R LETTER DATED 1/12/2011 WAS RECEIVED FROM THE ASSESSEE ON 5/12/2011 AGAIN RAISI NG THESE OBJECTIONS. ACCORDINGLY NOTICE U/S 142(1) DATED 7/12/2011 WAS AGAIN FORWARD ED TO THE ASSESSEE ALONG WITH ENCLOSURES. IN RESPONSES THERETO THE ASSESSEE ATT ENDED THE PROCEEDINGS ON 14/12/2011 AND OBJECTED TO THE REOPENING ON THE GRO UNDS THAT THE NOTICE U/S 148 WAS NOT ISSUED/SERVED UPON THE ASSESSEE WITHIN THE STATUTORY PERIOD OF LIMITATION. THE ASSESSEE FURTHER ON SUBSEQUENT DATES FILED SUPP ORTING EVIDENCES IN REGARD TO THE ISSUE ON MERIT. 2.4 THE OBJECTION OF THE ASSESSEE WAS DISMISSED BY THE ASSESSING OFFICER HOLDING AS UNDER:- 4 ITA NO. 3548/DEL/13 REGARDING THE SERVICE OF NOTICE U/S 148 IT IS CL ARIFIED THAT THE SAID NOTICE WAS ISSUED AT THE ADDRESS MENTIONED IN ITS RELEVANT ITR I.E A. Y 2004-05. THE ASSESSEE CANNOT DENY THE ADDRESS THOUGH IT WAS ITS OLD ADDRESS. THE NOTICE NEVER RECEIVED BACK UNDELIVERED HENCE VALIDLY SERV ED. THE ASSESSEE IS REGULAR IN DENYING THE NOTICE AS THE NOTICE U/S 142 (1) DA TED 28/11/2011 ISSUED AT ITS NEHRU PLACE ADDRESS RECEIVED BACK UNDELIVERED WITH REMARK NO SUCH FIRM. 3. ON MERITS THE ASSESSING OFFICER WAS THE VIEW THA T NOTHING HAS BEEN PLACED ON RECORD TO SHOW WHY A PERSON IS INVESTING ITS MONEY IN ASSESSEE COMPANY HAVING MEAGER AMOUNT OF INCOME. IT WAS ALSO NOTICED THAT IT COULD NOT BE SAID WHETHER IN SUBSEQUENT YEARS ANY DIVIDENDS WERE EARNED OR NOT. THUS WHERE NO DIVIDENDS ARE EARNED IT WAS QUESTIONED WHY WOULD ANYONE INVEST MO NEY. THE FOLLOWING DETAILS OF THE PRIVATE LIMITED COMPANY WERE BROUGHT ON RECORD TO Q UESTION WHY A GENUINE INVESTORS WOULD INVEST ITS HARD EARNED MONEY IN SUCH A CLOSEL Y HELD PRIVATE LIMITED COMPANY: S. NO. A.Y. INCOME RETURNED. 1. 2004-05 RS. 14 143/- 2. 2005-06 RS. 29 510/- 3. 2006-07 RS. 25 775/- 4. 2007-08 RS.21 688/- 5. 2008-09 RS. 23 770/- 6. 2009-10 RS.56 640/- 7. 2010-11 NIL. 3.1 FURTHER THE UNDATED AFFIDAVITS RELIED UPON BY T HE ASSESSEE IN SUPPORT OF ITS CLAIM ALONGWITH THE FACT THAT THE ALLEGED INVESTORS WERE FOUND TO BE DECLARING MEAGER INCOME IN THEIR TAX RETURNS WERE CONSIDERED QUESTIO NABLE. ACCORDINGLY IN VIEW OF THESE FACTS ADDITION OF THE SAID AMOUNT WAS MADE. 4. THE SAID ACTION WAS ASSAILED IN APPEAL BEFORE T HE CIT(A) ON VARIOUS GROUNDS ON MERIT AS WELL AS ON THE JURISDICTION ISSUE INCLUDIN G THE FOLLOWING THREE GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN QUASHING THE RE-ASSESSMENT ORDER AS BAD IN LAW DESP ITE THE FACT THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASI S OF CREDIBLE AND TANGIBLE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT. IN SIMILAR CIRCUMSTANCES THE HONBLE DELHI HIGH COURT IN VARI OUS RECENT JUDICIAL PRONOUNCEMENTS HAS UPHELD THE VALIDITY OF INITIATIO N OF REASSESSMENT PROCEEDINGS ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGA TION WING REGARDING ACCOMMODATION ENTRY PROVIDERS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN QUASHING THE RE-ASSESSMENT ORDER AS BAD IN LAW ON T HE BASIS THAT THE AO HAS 5 ITA NO. 3548/DEL/13 ISSUED THE NOTICE U/S 148 AT OLD ADDRESS BUT IGNOR ED THE FACT THAT THE NOTICE WAS SERVED VALIDLY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN QUASHING THE RE-ASSESSMENT ORDER AS BAD IN LAW DESP ITE THE FACT THAT THE AO HAS PASSED THE SPEAKING ASSESSMENT ORDER. 5. THE FACTS OF THE CASE ARE FOUND SUMMED UP BY THE CIT(A) IN PARA 4 OF HIS ORDER AND ARE REPRODUCED HEREUNDER:- 4. BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT COMPANY IS A NON BANKING FINANCE COM PANY (NBFC) ENGAGED IN THE BUSINESS CONSISTS OF GIVING OF LOANS AND ADVANCES TRADING IN SHARES ETC. THE APPELLANT FILED THE RETURN OF INCO ME ON 1 ST NOVEMBER 2004 DECLARING N INCOME OF RS. 14 140/-. THE RETURN WAS PROCESSED U/S 143(1). LATER NOTICE U/S 148 WAS ISSUED/SENT BY AO WHICH THE APP ELLANT CLAIMED WAS NOT SERVED ON THE APPELLANT AS IT WAS ADDRESSED AT A WR ONG ADDRESS. THEREAFTER A NOTICE U/S 142(1) DATED 8/8/2011 WAS ISSUED AT 1004 A CHIRANJIV TOWER NEHRU PLACE NEW DELHI-19 THE RETURNED ADDRESS OF THE AP PELLANT WHICH WAS ACKNOWLEDGED BY THE APPELLANT. THE APPELLANT OBJEC TED TO ASSUMPTION OF JURISDICTION U/S 148 AND REQUESTED FOR DROPPING OF PROCEEDINGS U/S 148 YET FURNISHED REQUIRED DOCUMENTS/INFORMATION THOUGH UN DER PROTEST. THE LD. AO PASSED THE RE-ASSESSMENT ORDER U/S 143 (3)/147 ON 3 0/12/2011 WHEREIN ADDITION OF RS.32 00 000/- WAS MADE ON ACCOUNT OF U NEXPLAINED CASH CREDIT U/S 48. 6. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE R EOPENING WAS ASSAILED ON THE GROUND THAT THE AO ACTED ON THE BASIS OF VAGUE INFO RMATION FROM INVESTIGATION WING WITHOUT ANY APPLICATION OF MIND. GLARING MISTAKES WERE ALLEGED IN REGARD TO THE MENTIONING OF THE DATES OF CHEQUE ETC. AND THE NAME OF THE BANK ETC. APART FROM THAT FOLLOWING ARGUMENTS ON FACT WERE MADE BEFORE THE CI T(A): REGARDING THE GROUND NO. 2 OF THE APPEAL THE APP ELLANT ALSO INFORMED THAT THE NOTICE U/S 148 DATED 18/3/2011 ITSELF WAS ISSUE D AT WRONG ADDRESS 110 D KAMLA NAGAR DELHI AND HENCE WAS CLAIMED TO BE INVALID. IT WAS ALSO POINTED OUT THAT THE NOTICE WAS VOID AB INITIO ON T HE GROUND THAT NO ASSESSMENT YEAR HAS BEEN MENTIONED THEREON. 6.1 ON THE BASIS OF THE SAME IT WAS PLEADED THAT NO TICE WAS NEVER SERVED UPON THE ASSESSEE WITHIN THE PRESCRIBED PERIOD. IT WAS SUBM ITTED THAT THE ADDRESS AT KAMLA NAGAR WAS CHANGED BY THE ASSESSEE COMPANY WAY BACK IN 2005 I.E. MORE THAN 6 YEARS PRIOR TO THE ISSUANCE OF NOTICE U/S 148. THE CHANGE OF ADDRESS OF THE ASSESSEE WAS IN THE KNOWLEDGE OF THE ASSESSING OFFICER WARD 12 (2) WHO ALSO KNEW THE CURRENT ADDRESS 6 ITA NO. 3548/DEL/13 OF THE ASSESSEE. THE ASSUMPTION OF JURISDICTION ON THE BASIS OF NOTICE ISSUED TO THE WRONG ADDRESS ON THESE FACTS IT WAS SUBMITTED IS WR ONG AS THE NOTICE WAS NEVER SERVED ON THE ASSESSEE WITHIN THE TIME LIMIT OF 6 YEARS PR ESCRIBED U/S 149 OF THE INCOME TAX ACT. CONSEQUENTLY IT WAS PLEADED THAT THE REASSESS MENT IS VOID AB INITIO. RELIANCE WAS PLACED UPON THE CHAPTER 6 OF THE MANUAL OF OFFI CE PROCEDURE VOLUME II ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES WHICH EXPLAIN THE IMPORTANCE OF ISSUANCE AND SERVICE OF NOTICES WHICH POINTED OUT THE FOLLOWING REQUIREMENTS TO BE MET. 1.2 ANY ORDER PASSED BY AN INCOME TAX AUTHORIT Y CAN BE DECLARED NULL AND VOID IF THERE WAS NO VALID SERVICE OF THE RELEVANT STATUTOR Y NOTICE. HENCE IT IS IMPERATIVE TO ENSURE THE FOLLOWING: (I) TIMELY ISSUE OF THE CORRECT NOTICE IN THE PRESCRIBE D FORMAT (II) TIMELY AND VALID SERVICE OF SUCH NOTICE (III) MAINTAINING PROPER RECORD OF BOTH ISSUE AND SERVICE 2. ISSUE OF NOTICE (ONLY RELEVANT PORTION REPRODUC ED HERE FOR BREVITY) 2.1 THE CHECKLIST GIVEN BELOW MAY BE USED WHILE ISS UING ANY NOTICE: (I) IS IT THE PROPER NOTICE TO BE ISSUED? (II) IS IT IN THE PRESCRIBED FORMAT? (III) ARE INAPPLICABLE WORDS OR CLAUSES STRUCK OFF? (IV) IS IT ADDRESSED TO THE CORRECT PERSON? (V) IS THE ADDRESS CORRECT ? (VI)ARE THE NAME AND STATUS OF THE APPELLANT CORREC TLY MENTIONED? (VII) IS THE ASSESSMENT YEAR CORRECTLY MENTIONED ? (VIII)IS THE PERSON ADDRESSED GIVEN A REASONABLE TI ME TO RESPOND? (IX)ARE THE DATE TIME AND VENUE OF HEARING GIVEN? (X)IS THE NOTICE SIGNED AND SEAL AFFIXED? 3. SERVICE OF NOTICE 3.1 AS PER THE PROVISIONS OF SECTION 282 A NOTICE MAY BE SERVED EITHER BY POST OR AS IF IT WERE A COURT SUMMONS UNDER THE CIVIL PROCEDURE CODE . 4. SERVICE BY POST 4.1 THE PROCEDURE FOR SERVICE BY POST IS GIVEN IN S ECTION 27 OF THE GENERAL CLAUSES ACT. REQUIREMENTS FOR VALID SERVICE BY POST ARE (I) PROPER ADDRESSING (II) PREPAYING (III) SENDING BY REGISTERED POST WITH ACKNOWLEDGEME NT DUE. IN VIEW OF THE ABOVE CBDT GUIDELINES IT WAS PLEADE D THAT IF THE NOTICE IS ISSUED AND SENT AT WRONG ADDRESS IT CANNOT BE SAID TO HAVE BEEN VA LIDLY ISSUED. FURTHER IT WAS ALSO SUBMITTED THAT IN CASE OF SENDING NOTICE AT A WRONG ADDRESS PRESUMPTION OF VALID SERVICE BY POST CANNOT BE DRAWN IN VIEW OF SECTION 27 OF TH E GENERAL CLAUSES ACT AS ENUMERATED ABOVE. 6.2 IN THE LIGHT OF THE ABOVE GUIDELINES AND PLEADI NGS IT WAS SUBMITTED THAT THE ASSESSEE HAD INFORMED THAT THE CORRECT ADDRESS OF T HE ASSESSEE IS 1004A CHIRANJIV 7 ITA NO. 3548/DEL/13 TOWER NEHRU PLACE NEW DELHI THE SAID ADDRESS HAD BEEN UPDATED IN THE PAN DATE BASE AND BY THE FOLLOWING DOCUMENTS CHANGE OF ADDRE SS WAS DEMONSTRATED. IT WAS SUBMITTED BY THE FOLLOWING DOCUMENTS:- S. NO PART ICULARS. 1 COPY OF FORM 18 AND CHALLAN OF ROC DT 21/6/2005 2 COPY OF ITR (FORM 1) AY 2005-06 3 COPY OF FORM 18 AND CHALLAN OF ROC DT 16/8/2007 4 COPY OF PAN APPLICATION FILED WITH NSDL ON 18/8/2 007 ( FOR ADDRESS CHANGE) 5 COPY OF COVERING LETTER RECD. FROM INCOME TAX PAN SERVICES DEPICTING THE CHANGED ADDRESS OF NEHRU PLACE. 6 COPY OF LETTER DATED 20/10/2007 FILED WITH ITO WA RD 12 (2) INTIMATING THE NEHRU PLACE ADDRESS 7 COPY OF INTIMATION U/S 143 (1) FOR A.Y 2007-08 IS SUED BY THE AO AT THE NEW ADDRESS AT NEHRU PLACE OFFICE/. 8 COPY OF ORDER U/S 143 (3) DATED 18/12/2008 FOR A. Y 2006-07 ISSUED AT NEHRU PLACE ADDRESS. 6.3 IN THE SAID FACTS IT WAS SUBMITTED THAT WHERE T HE FACT THAT THE NOTICE HAD BEEN SENT TO THE WRONG ADDRESS IS EVEN COMING OUT FROM T HE ASSESSMENT ORDER ITSELF AS THE ASSESSING OFFICER HIMSELF CONCEDED THAT NOTICE U/S 148 HAD BEEN ISSUED AT THE ADDRESS MENTIONED IN THE INCOME TAX RETURN FOR 2004-05 ASSE SSMENT YEAR. THUS THE OBSERVATION OF THE AO THAT NO REPLY WAS RECEIVED IN RESPONSE THERETO AGAIN AFFIRMS THAT NOTICE WAS NEVER SERVED UPON THE ASSESSEE AS HAVI NG BEEN SENT ADMITTEDLY TO A WRONG ADDRESS THE OCCASION TO RESPOND DOES NOT ARISE. IT WAS SUBMITTED THAT ONLY SUBSEQUENTLY WHEN NOTICE U/S 142 (1) DATED 8/8/2011 WAS ISSUED TO THE ASSESSEE AT THE CORRECT ADDRESS THAT THE ASSESSEE APPEARED. IT WAS SUBMITTED THAT A DUTY IS CAST UPON ASSESSING OFFICER TO CHECK THE JURISDICTION AN D THE INFORMATION; CHECK THE PARTICULARS OF NAME ADDRESS ETC. AND ENSURE THAT L ATEST PARTICULARS OF THE APPELLANT IE. LATEST NAME LATEST/CORRECT ADDRESS CORRECT ASSESS MENT YEAR IS INCORPORATED BEFORE ISSUING A NOTICE U/S 148. THUS REFERRING TO THE R EQUIREMENTS OF SECTION 148 WHICH NEED TO BE MET BEFORE MAKING THE REASSESSMENT IT WA S SUBMITTED THE AO AS PER THE 8 ITA NO. 3548/DEL/13 FOLLOWING DECISIONS IS REQUIRED TO SERVE UPON THE A PPELLANT THE NOTICE IN THE PRESCRIBED FORM AND MANNER WHICH EVIDENTLY WAS NOT THE REASSES SMENT WAS CLAIMED TO BE BAD IN LAW: - CIT VS. ESHAN HOLDING PVT. LTD. (ITA NO. 1171/2008) R. K. UPADHYAYA VS. SHANABHAI P. PATEL 1987 AIR 137 8 S(SC) CIT VS. RAJESH KUMAR SHARMA ITA 1547/2006 (DELHI) ( 13 AUG 2007) ACIT AND ANR VS. HOTEL BLUE MOON [2010] 321 I.T.R. 362 (SC) CIT VS. RAJEEV SHARMA [2010]40 DTR (ALL) 129 ALPINE ELECTRONICS ASIA PVT. LTD VS. DIRECTOR GENER AL OF I. TAX & ANR. & MOTILAL BIMALCHAND JAIN (HUF) VS. CIT (285 ITR 224 (M.P) 7. ON THE MERITS OF THE ADDITIONS IT WAS SUBMITTED THAT SHARE APPLICATION MONEY WAS RECEIVED FROM SIX CORPORATE ASSESSES AND ONE IN DIVIDUAL. IN SUPPORT OF THE SAID CLAIMS IT WAS SUBMITTED THAT BEFORE THE AO THE FOLL OWING DOCUMENTS HAVE BEEN FILED (THE RELEVANT EXTRACT FROM PARA 5.8 IS REPRODUCED H EREUNDER FOR READY REFERENCE): - (A) SHARE APPLICATION FORM RECEIVED FROM THE SHARE APPLICANTS CONTAINING THE COMPLETE DETAILS OF APPLICANTS WHICH INCLUDES NAME OF THE APPLICANTS ADDRESS PAN NO. OF SHARES APPLIED MODE OF PAYMENT OF SHAR E APPLICATION MONEY DETAILS OF BANK OF SHARE HOLDERS BRANCH CHEQUE NO DATE A ND OCCUPATION OF APPLICANTS. (B) CONFIRMATION/AFFIDAVIT FROM THE SHARE APPLICANT S CONTAINING THE COMPLETE DETAILS OF AMOUNT INVESTED CHEQUE NUMBER DATE BA NK PARTICULARS PAN AND INCOME TAX PARTICULARS. (C) COPY OF PAN CARD/PAN ALLOTMENT LETTERS OF THE S HARE HOLDERS AND APPLICANTS. (D) COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN OF SHARE HOLDERS & APPLICANTS. (E) COPY OF BANK STATEMENT OF SHARE HOLDERS AND APP LICANTS REFLECTING THE TRANSACTION. (F) COPY OF AUDITED BALANCE SHEET OF SHARE HOLDERS AND APPLICANTS. (G) COPY OF BOARD RESOLUTION OF SHARE HOLDERS AND A PPLICANTS. (H) COPY OF FORM NO. 2 FILED WITH ROC SHOWING THAT SHARES WERE ALLOTTED. (I) COPY OF BANK STATEMENT OF APPELLANT FOR A.Y 200 5-06 DURING WHICH 3 SHARE APPLICANTS WERE REFUNDED THEIR SHARE APPLICAT ION MONEY OF RS. 15 00 000/-. 9 ITA NO. 3548/DEL/13 (J) COPY OF CONFIRMATION OF 3 SHARE APPLICANTS TO W HOM SHARES WERE NOT ALLOTTED AND WHO WERE REFUNDED THEIR SHARE APPLICAT ION MONEY DURING THE A.Y 2005-06. 8. THESE DOCUMENTS IT WAS STATED WERE AGAIN FILED B EFORE THE CIT(A). ATTENTION WAS INVITED TO THE OBSERVATIONS MADE BY THE ASSESSING O FFICER AT PARA 3 PAGE 4 WHICH IT WAS STATED DEMONSTRATES THAT THE DOCUMENTS WERE FIL ED EVEN BEFORE THE AO. IN THE ABOVE BACKGROUND IT WAS SUBMITTED THAT THE ACTION OF THE AO IN REJECTING THE EVIDENCES FILED RELYING ON SOME VAGUE INFORMATION F ROM INVESTIGATION WING EVEN CARELESSLY HOLDING THE COMPANY AS A PRIVATE LIMITED CLOSELY HELD PVT. LTD. COMPANY IGNORING FACT THAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY. THE FOLLOWING GLARING MISTAKES OF THE AO WERE HIGHLIGHTED: 1. THAT THE COMPANY IS A PUBLIC LIMITED COMPANY A ND NOT A CLOSELY HELD PRIVATE LIMITED COMPANY AS HAS BEEN WRITTEN ABOUT A BOVE BY THE AO. 2. OUT OF RS. 32 00 000/-OF SHARE APPLICATION RECEI VED SHARES OF RS.17 00 000/- HAVE BEEN ALLOTTED TO FOUR APPLICANT S AND RS.15 00 000/- WERE RETURNED TO THREE APPLICANTS IN THE VERY NEXT ASSESSMENT YEAR 2005- 06 BY ACCOUNT PAYEE CHEQUES. THE FACT THOUGH ALREA DY ON RECORD WAS COMPLETELY IGNORED BY THE AO FOR MAKING SUCH ILLEGA L ADDITION. 3. EVEN THE INCOME RETURNED BY THE COMPANY AFTER A. Y 2003-04 HAVE BEEN QUOTED FOR ALLEGING THAT SHAREHOLDERS CANNOT BE INC LINED TO MAKE INVESTMENT IN A COMPANY HAVE MEAGER PROFITS. ANY S HARE HOLDER/APPLICANT IS NOT A FORTUNE TELLER AND CANNOT PREDICT THE INCOME/LOSS OF THE COMPANY FOR THE SUBSEQUENT PERIOD. 9. IN THE ABOVEMENTIONED FACTS AND EVIDENCES ADDRES SING THE SHARE HOLDERS FILED BEFORE THE AO IT WAS SUBMITTED THAT IT PROVED BEYON D DOUBT THAT ALL THE TRANSACTIONS ENTERED THROUGH BANKING CHANNEL; THE SHARE HOLDERS WERE ASSESSED TO TAX THE IDENTITY AND CREDITWORTHINESS AND GENUINENESS STOOD ESTABLI SHED. IN VIEW THEREOF RELYING UPON VARIOUS DECISIONS IT WAS PLEADED THAT EVEN ON MERIT THE ADDITION HAS BEEN WRONGLY MADE. 10. CONSIDERING THESE FACTS THE CIT(A) QUASHED THE PROCEEDINGS VIDE PARAS 6 TO 6.4 AND THEREAFTER PROCEEDINGS TO CONSIDER THE ISSUE ON MERIT AND TAKING THE EVIDENCES INTO CONSIDERATION EVEN DELETED THE ADDITIONS ON ME RIT. 11. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEF ORE THE TRIBUNAL. 10 ITA NO. 3548/DEL/13 12. THE LD. SR. DR REFERRING TO THE RECORD STATED T HAT THE NOTICE WAS SENT TO THE ADDRESS MENTIONED IN THE INCOME TAX RETURN AND THE FACT WAS ACCEPTED BY THE ASSESSEE ALSO. THUS IN THE BACKGROUND WHERE NOTICE AS PER RECORD HAS BEEN SENT THE RELIEF GRANTED BY THE CIT(A) IT WAS CLAIMED IS CONT RARY TO RECORD. ADDRESSING THE CHANGE OF ADDRESS IN THE DATABASE OF PAN AND OTHER DOCUMENTS IT WAS SUBMITTED THAT THE FACT WAS NOT REQUIRED TO BE LOOKED INTO BY THE AO AT THE TIME OF ISSUANCE OF NOTICE BASED ON THE REPORT OF THE INVESTIGATION WING AND T HE FACT THAT NOTICE WAS SENT TO THE RETURN INDICATED IN THE ITR OF THE ASSESSEE IS SUFF ICIENT COMPLIANCE. ON MERIT ALSO IT WAS SUBMITTED THAT THE NATURE OF EVIDENCE RELIED IS NOT SUFFICIENT PROOF AS MERE MOVEMENTS OF FUNDS THROUGH BANKING CHANNELS CANNOT MAKE THE TRANSACTIONS LEGITIMATE. 13. THE LD. AR ON THE OTHER HAND CARRIED US THROUGH THE DOCUMENTS FILED IN THE PAPER BOOK RUNNING INTO 156 PAGES CONNECTING THESE WITH THE DETAILED ARGUMENTS ADVANCED BEFORE THE CIT(A) AND RECORDED IN THE SAID ORDER REITERATED THE SAME. THE FINDINGS ARRIVED AT THEREIN IT WAS SUBMITTED CONSID ERING THE FACTS ON RECORD DO NOT DEMONSTRATE THAT THE FINDINGS ARE PERVERSE. THE AR GUMENT THAT NOTICE WAS SENT TO THE ERSTWHILE ADDRESS OF THE ASSESSEE IT WAS SUBMITTED DOES NOT ABSOLVE THE AO FROM THE IRRESPONSIBILITY OF ACTING ON VAGUE INFORMATION WIT HOUT CARING TO APPLY MIND WHICH WOULD PRESUPPOSE AT LEAST THAT HE WILL MAKE EFFORT TO ISSUE NOTICE AT THE CORRECT ADDRESS AVAILABLE TO THE DEPARTMENT. IT WAS QUESTI ONED THAT WHAT IS THE NEED FOR UPDATING THE DATABASE OF THE DEPARTMENT IF THE TAX OFFICIALS THEMSELVES DO NOT CONSIDER IT NECESSARY TO CONSULT IT. HAD THE ASSESSEE NOT U PDATED THE ADDRESS IT WAS SUBMITTED THAT THE ASSESSEE MAY HAVE BEEN FAULTED FOR NOT KEE PING THE DEPARTMENT INFORMED AND AS THE LAST KNOWN ADDRESS ON RECORD THE TAX AUTHORI TIES MAY HAVE HAD A CASE. IN THE FACTS OF THE PRESENT CASE THE IMPUGNED ORDER WAS JU STIFIED ON FACTS. EVEN ON MERITS IT WAS ARGUED NO INFIRMITY HAS BEEN POINTED OUT BY THE SR. DR THE GENERAL ARGUMENT THAT MONEY THROUGH BANKING CHANNELS DOES NOT GRANT LEGIT MACY IT WAS SUBMITTED IS A VAGUE ARGUMENT AND DOES NOT HELP THE REVENUE IN ANY MANNE R. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION THEREOF WE ARE OF THE V IEW THAT BEFORE WE DELIBERATE ON THE ISSUES FURTHER IT WOULD BE APPROPRIATE TO FIRST ADD RESS THE RELEVANT FINDING UNDER CHALLENGE. THE SAME IS REPRODUCED HEREUNDER FOR RE ADY REFERENCE: - 11 ITA NO. 3548/DEL/13 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE IN THE LIGHT OF THE SUBMISSION MADE BY THE APPELLANT IN THE LIGHT OF TH E APPLICABLE LAW. ACCORDINGLY MY DECISION ON VARIOUS GROUNDS OF APPE AL IS AS UNDER: 6.2 VIDE GROUNDS NO. 1 TO 9 OF THE APPEAL THE APPELLANT HAS CHALLENGED THE REASSESSMENT PROCEEDINGS ON LEGAL GROUNDS. I F IND THAT FOR THE PURPOSE OF INITIATING THE PROCEEDINGS FOR REASSESSMENT THE NOT ICE U/S 148 WAS TO BE ISSUED ON OR BEFORE 31.3.2011. ON CAREFUL CONSIDER ATION OF THE FACTS IN THE LIGHT OF SUBMISSION OF THE APPELLANT IT IS EVIDENT THAT THE LD. AO HAD SENT THE NOTICE U/S 148 DATED 18.3.2011 AT THE PREVIOUS ADDR ESS OF THE APPELLANT WHICH WAS CHANGED 6 YEARS AGO BY THE APPELLANT. NE CESSARY INFORMATION WAS SPECIFICALLY GIVEN TO THE AO IN THIS REGARD AND EVE N THE ADDRESS WAS CHANGED IN THE PAN DATA BASE. IT IS VERY LIKELY THAT THE A O SIMPLY ATTACHED THE INFORMATION RECEIVED FROM THE INVESTIGATION WING WI TH THE RETURN FOR THE AY 2004-05 AND ISSUED THE NOTICE U/S 148 WITHOUT BOTH ERING TO FIND OUT WHETHER THE APPELLANT CONTINUES TO BE AT THE SAME ADDRESS A T WHICH IT HAD FILED THE RETURN 5 YEARS AGO. NEITHER DID HE CHECK THE ADDRE SS FROM THE CURRENT RETURN NOR FROM PAN DATA BASE. IT IS THUS EVIDENT THAT TH E NOTICE SENT AT WRONG ADDRESS WAS TO RETURN BACK. STRANGELY THE AO HAS A LSO ACKNOWLEDGED THESE FACTS IN THE IMPUGNED ORDER. I FAIL TO UNDERSTAND IF THE NOTICE DATED 18.3.2011 HAD RETURNED BEFORE 31.3.2011 WHY THE AO NOT APPLI ED MIND IN THE MATTER TO FIND OUT THE CORRECT ADDRESS BY LOOKING AT DATA BA SE OF HIS ASSESSES. THE ARGUMENT THAT IT WAS THE APPELLANT WHO HAD AT SOME POINT OF TIME GIVEN THIS ADDRESS IS OF NO RELEVANCE AS THE AO WAS IN POSSE SSION OF THE NEW ADDRESS WHICH WAS DULY INFORMED BY THE APPELLANT AND FROM WHICH LATER RETURNS WERE FILED AND WHICH WAS ALSO AVAILABLE IN THE PAN DATA BASE. IN VIEW OF THIS I HOLD THE REASSESSMENT PROCEEDINGS IN PURSUANCE OF T HE NOTICE U/S 148 WHICH WAS NOT SERVED UPON THE APPELLANT (WITHIN THE PRESC RIBED TIME) AS BAD IN LAW. 6.3 FURTHER ON PERUSAL OF THE COPY OF THE NOTICE I FIND THAT THE SAME SHOWS THAT THE NOTICE U/S 148 IS SILENT ABOUT THE ASSESSM ENT YEAR FOR WHICH THE PROCEEDINGS WERE TO BE REOPENED. IN VIEW OF THE AB OVE I HOLD THE NOTICE U/S 148 AS INVALID. 6.4 IN VIEW OF THE ABOVE THE IMPUGNED ORDER RESULTI NG FROM THE PROCEEDINGS WHICH HAVE BEEN HELD BY ME AS BAD IN LA W IS BEING QUASHED. 6.5 REGARDING THE MERIT OF ADDITION U/S 68 RAISED B Y GROUND NO. 10 AND 11 I FIND THAT THE APPELLANT HAD FURNISHED ALL RELEVAN T INFORMATION TO SUBSTANTIATE THE IDENTITY GENUINENESS AND CREDITWO RTHINESS OF THE SHARE APPLICANTS BY FILING CONFORMATION THEIR PAN/ITR DE TAILS COPY OF BANK STATEMENTS ROC DOCUMENTS FOR ALLOTMENT OF SHARES. DETAILS OF CHEQUE NUMBER BY WHICH SHARE APPLICATION MONEY OF RS. 15 L AKH WAS REFUNDED WHERE SHARES WERE NOT ALLOTTED WERE ALSO FURNISHED . IT APPEARS THAT HAVING RECEIVED THIS THE LD. AO PLACED THE SAME IN THE FI LE AND MADE NO ENQUIRIES WHATSOEVER TO VERIFY THE CREDIBILITY OF THE EVIDENC ES FURNISHED BY THE APPELLANT IN SUPPORT OF THE GENUINENESS CREDIT WOR THINESS OF THE CASH CREDITS. IT APPEARS THAT THE AO HAD DECIDED THAT BY REPEATIN G THE TEMPLATE OF ASSESSMENT ORDERS IN SIMILAR CASES IN WHICH A FEW P AGES ARE DEVOTED TO ACADEMIC DISCUSSION ABOUT WHAT CONSTITUTES AN ACCOM MODATION ENTRY ETC. 12 ITA NO. 3548/DEL/13 AND BY MAKING CERTAIN GENERAL REMARKS SUCH AS HOW C AN SOMEONE INVEST IN A COMPANY WHOSE RETURNED INCOME IS LOW ETC. HIS STAT UTORY DUTY AS THE AO WAS OVER AND THEREFORE HE JUST PLACED THE EVIDENCES F URNISHED BY THE APPELLANT IN FILE AND IGNORED THE SAME. 6.6 IN VIEW OF THE SAME I HOLD THAT THE APPELLANT HAD DULY DISCHARGED THE ONUS AND IT WAS THE RESPONSIBILITY OF THE AO TO HAV E MADE NECESSARY VERIFICATION IN RESPECT OF THE EVIDENCES FURNISHED BY THE APPELLANT. SINCE THE LD. AO MADE NO EFFORTS AT ANY STAGE BE AT THE STAG E OF RECORDING OF THE REASON FOR REOPENING OF THE CASE OR AT THE ASSESSMENT STAG E I HOLD THAT THE APPELLANT HAD DULY SUBSTANTIATED THE NECESSARY REQUIREMENTS F OR HOLDING CASH CREDIT AS EXPLAINED. FACTUALLY ALSO THERE WERE NO SPECIFIC ADVERSE OBSERVATIONS NOR ANY CONTRADICTION OBSERVED BY THE AO IN RESPECT OF SUCH EVIDENCES AND HENCE THE ACTION OF THE AO IN HOLDING THE SAME AS UNEXPLA INED CASH CREDIT WAS WITHOUT ANY BASIS COGENT GROUNDS AND WAS THEREFORE UNJUSTIFIED. 6.7 THE FACT THAT THE LD. AO DID NOT MAKE ANY EFFOR TS IN MAKING ENQUIRIES BY ISSUE OF SUMMONS OR OTHERWISE DISTINGUISHES THE CASE FROM THE CASE OF CIT VS. NOVA PROMOTERS AND FINLEASE P. LTD. (2012) 18 T AXMANN.COM 217 (DEL.) AND THEREFORE THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS P. LTD. 2008-TIOL-238-SC-IT SQUARELY APPLIES TO THE CASE OF THE APPLICANT. IN VIEW OF THE ABOVE THE A DDITION MADE BY THE LD. AO BY HOLDING SHARE APPLICATION MONEY OF RS. 32 00 000 /- AS UNEXPLAINED CASH CREDIT WAS UNJUSTIFIED AND THEREFORE THE SAME IS ACCORDINGLY DELETED. 15. ON A CONSIDERATION OF THE SAME WE FIND THAT THE REASONING AND FINDING OF THE CIT(A) IN PARA 6 TO 6.4 REPRODUCED HEREINABOVE CANN OT BE FAULTED WITH. WE OURSELVES FIND THAT THE QUESTION POSED BY THE LD. CIT(A) IN P ARA 6.2 AS TO WHY THE AO DID NOT ADDRESS THE DEFECT IN JURISDICTION BEFORE 31.3.2011 AS THE FACTS AND TIME WAS AVAILABLE TO HIM HAS EVIDENTLY REMAINED UNANSWERED BY THE LD. SR. DR. IN VIEW OF THE FACT THAT THE ASSUMPTION OF JURISDICTION IS HELD TO BE BAD IN LAW ON THE FACTS AS THEY STAND WE NEED NOT THEREAFTER DELIBERATE ON THE MERITS OF THE DELETING OF THE ADDITION. ACCORDINGLY BEING SATISFIED ON FACTS BY THE REASONI NG AND CONCLUSION ARRIVED AT BY THE CIT(A) WE UPHOLD HIS ACTION IN QUASHING THE PROCEED INGS. ACCORDINGLY FOR THE REASONS GIVEN HEREINABOVE THE DEPARTMENTAL GROUNDS ARE DISM ISSED. 16. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 ST OF JULY 2015 SD/- SD/- (N. K. SAINI) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31/07/2015 13 ITA NO. 3548/DEL/13 *R. NAHEED/*KAVITA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI 14 ITA NO. 3548/DEL/13 DATE 1. DRAFT DICTATED ON 10.07.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 13.07.2015 30.7.15 31.7.15 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 31/07/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 31/07/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 31/07/2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON 31/07/2015 PS 7. FILE SENT TO THE BENCH CLERK 31/07/2015 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 15 ITA NO. 3548/DEL/13