ITO, New Delhi v. Sh. Jagri Ram Bhatia, New Delhi

ITA 4041/DEL/2010 | 2007-2008
Pronouncement Date: 14-01-2011 | Result: Dismissed

Appeal Details

RSA Number 404120114 RSA 2010
Assessee PAN AAGPB8372C
Bench Delhi
Appeal Number ITA 4041/DEL/2010
Duration Of Justice 4 month(s) 13 day(s)
Appellant ITO, New Delhi
Respondent Sh. Jagri Ram Bhatia, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 14-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 14-01-2011
Date Of Final Hearing 13-01-2011
Next Hearing Date 13-01-2011
Assessment Year 2007-2008
Appeal Filed On 31-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO.4041/DEL/2010 ASSESSMENT YEAR : 2007-08 ITO WARD 32 (2) NEW DELHI. VS. SHRI JAGRI RAM BHATIA B-38 SOUTH EXTENSION PART I NEW DELHI 110 049. PAN : AAGPB8372C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K. MONGA SR. DR REVENUE BY : SHRI AKASH SINGHAL CA ORDER PER I.P. BANSAL JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER OF THE CIT (A) DATED 30 TH JUNE 2010 FOR ASSESSMENT YEAR 2007- 08. GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE A.O. H AD NOT SERVED THE NOTICE (S) IN NOT CORRECT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION O F `34 00 000/- TREATING THE INVESTMENT IN VARIOUS MUTUA L FUNDS OUT OF UN-EXPLAINED SOURCES. 3. THE APPELLANT CRAVES LEAVE TO ADD ALTER OR AMEN D ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. ITA NO.4041/DEL/2010 2 2. IT IS OBSERVED THAT THE IMPUGNED ASSESSMENT HAS BEEN FR AMED U/S 144 OF THE ACT VIDE ORDER DATED 18 TH DECEMBER 2009. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE AT A SUM OF ` 4 59 881/- ON 30 TH JULY 2007. IT HAS BEEN MENTIONED IN THE ASSESSMENT ORDER THAT THE FIRST NOTICE U/S 143 (2) WAS ISSUED ON 18 TH JULY 2007 FIXING THE CASE FOR 30 TH JULY 2007 AND THE SAID NOTICE WAS ALSO SERVED THROUGH AFFIXTURE BY SHRI DHIR SINGH (NOTICE SERVER) IN THE PRESENCE OF SHRI M ANOJ KUMAR (INSPECTOR) AT THE PREMISE NO.K-8 SOUTH EXTENSION PA RT I NEW DELHI ON 29 TH JULY 2009. IT IS ALSO MENTIONED IN THE ASSESSMENT ORDER THAT IN RESPONSE TO THAT NOTICE NO ONE ATTENDED AND NO REPLY WAS FILED AND AGAIN NOTICE U/S 143 (2) WAS ISSUED ON 6 TH MARCH 2009 WHICH WAS SENT THROUGH SPEED POST AND IN RESPONSE THERETO ALSO NOBODY A TTENDED THE ASSESSMENT PROCEEDINGS AND SO ANOTHER OPPORTUNITY WAS GIV EN AND IN THESE CIRCUMSTANCES THE ASSESSING OFFICER HAS FRAMED THE I MPUGNED ASSESSMENT BY ADDING A SUM OF ` 34 LAC IN THE INCOME OF THE ASSESSEE ON ACCOUNT OF INCOME FROM UNEXPLAINED SOURCES AS THE A SSESSEE HAD MADE INVESTMENT OF ` 34 LAC IN VARIOUS MUTUAL FUNDS DU RING THE YEAR UNDER CONSIDERATION. 3. BEFORE THE CIT (A) IT HAS BEEN THE CASE OF THE ASSESSE E THAT LEARNED ASSESSING OFFICER RIGHT FROM THE BEGINNING HAD BEEN SENDING NOTICES AT THE OLD ADDRESS OF THE ASSESSEE NAMELY K-8 S OUTH EXTENSION PART I NEW DELHI INSTEAD OF NEW ADDRESS I.E . B-38 SOUTH EXTENSION PART I NEW DELHI WHICH WAS THE ADDRESS MENT IONED BY THE ASSESSEE ON THE INCOME-TAX RETURN FOR THE YEAR UNDER CO NSIDERATION. IT WAS ALSO POINTED OUT THAT THE NEW ADDRESS WAS ALSO MENTIO NED IN THE ASSESSMENT ORDER PASSED FOR IMMEDIATE PRECEDING ASSESSMENT Y EAR I.E. 2006-07. IT WAS ALSO MENTIONED THAT EVEN ON ON E OF THE NOTICES ISSUED U/S 143 (2) DATED 9 TH SEPTEMBER 2008 WHICH WAS NOT THE FIRST NOTICE ISSUED WITHIN 12 MONTHS THE ADDRESS STATED WAS NEW ADDRESS. IT WAS SUBMITTED THAT NO FURTHER NOTICES WERE SENT TO T HE ASSESSEE. ITA NO.4041/DEL/2010 3 REGARDING THE MERITS OF THE CASE IT WAS INFORMED THAT AN AMOUNT OF ` 35 LAC WAS TRANSFERRED FROM THE BANK ACCOUNT NO.10732 230802 WITH SBI TO ANOTHER BANK ACCOUNT NO.300779876880 WITH SB I AND ALL INVESTMENTS ARE MADE BY ACCOUNT PAYEE CHEQUES WHICH WA S ISSUED FROM THAT ACCOUNT. A COPY OF INCOME-TAX RETURN WAS ALSO FURNISHED TO SHOW THAT THE CONTENTION OF THE ASSESSEE WAS CORRECT. CO PIES OF TWO BANK STATEMENTS WERE ALSO SUBMITTED TO SHOW THAT THE INV ESTMENT WAS MADE BY THE ASSESSEE FROM DISCLOSED SOURCES WHICH INCLUDED REDEMPTION OF MUTUAL FUND INVESTMENT MADE EARLIER OF `30 20 828/- DIVIDEND INCOME OF ` 3 65 995/- AND OTHER INCOME OF ` 5 45 696/-. THE ASSESSEE ALSO SUBMITTED DETAILS OF THE REDEMPTION OF MUTUA L FUNDS REALIZED DURING THE YEAR AND DETAILS OF VARIOUS INVEST MENTS MADE IN MUTUAL FUNDS OF ` 34 LAC DURING THE YEAR AND THUS I T WAS SUBMITTED THAT THE INVESTMENTS WERE MADE FROM DISCLOSED SOURCES AND THERE WAS NO REASON WITH THE ASSESSING OFFICER TO MAKE SUCH ADDITIO NS WITHOUT GIVING THE OPPORTUNITIES TO THE ASSESSEE AND WITHOUT SERV ING THE NOTICES AT THE RETURNED ADDRESS. CONSIDERING ALL THESE SUBMISSIONS LD. CIT (A) HAS GIVEN A FINDING THAT IN THE ABSENCE OF NO TICE U/S 143 (2) WITHIN 12 MONTHS THE ASSESSMENT FRAMED ON THE ASSESSEE WILL BE NULL AND VOID AND FOR HOLDING SO HE HAS RELIED UPON THE D ECISION OF HONBLE DELHI HIGH COURT DATED 31 ST AUGUST 2009 PASSED IN ITA NO.1171/2008 IN THE CASE OF M/S EESHANN HOLDING PVT. LTD. WHEREIN I T WAS HELD THAT THE NOTICE ISSUED AT THE OLD ADDRESS EVEN THOUGH THE ASSE SSEE HAD INTIMATED THE NEW ADDRESS THE PROCEEDINGS EMANATING F ROM SUCH NOTICE WERE NULL AND VOID AND THIS POSITION OF LAW AG AIN WAS AFFIRMED BY HONBLE DELHI HIGH COURT IN ANOTHER CASE NAMELY ITO VS. THREE DE AXIM PVT. LTD. IN APPEAL NO.4413 (DEL) OF 2007 VIDE ORDER DATED 25.9.2009. IN THESE CIRCUMSTANCES LD. CIT (A) HAS HEL D THAT THE ASSESSMENT IS INVALID IN THE ABSENCE OF SERVICE OF NOTICE U/S 143 (2) ALSO AS PER THE DECISION OF HONBLE DELHI HIGH COURT I N THE CASE OF CIT VS. PAWAN KUMAR GUPTA AND OTHRS (2009) 223 CTR 487. HOWEVER ITA NO.4041/DEL/2010 4 LEARNED CIT (A) HAS NOT ADJUDICATED ON THE MERITS OF THE CASE AND HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE. THE DEPARTME NT IS AGGRIEVED WITH SUCH FINDINGS RECORDED BY THE CIT (A) AND HENCE HAS FILED THE AFOREMENTIONED APPEAL. 4. THE ASSESSEE HAS FILED PAPER BOOK BEFORE US CONTAINING 31 PAGES IN WHICH AT PAGES 1 AND 2 THE ASSESSEE HAS SUBMITTED COPY OF ACKNOWLEDGEMENT OF RETURN AND THE COPY OF COMPUTATI ON OF TOTAL INCOME. ON THE ACKNOWLEDGEMENT THE ADDRESS WRITTEN BY THE ASSESSEE IS B-38 SOUTH EXTENSION PART I DELHI 49. ON COMPUTATION OF TOTAL INCOME ALSO THE ASSESSEE HAS WRITTEN THE SIMILAR ADD RESS. THE ASSESSMENT ORDER IN THE PRESENT CASE SHOWS THE ADDRESS AS K-8 SOUTH EXTENSION PART I NEW DELHI. IN THE PAPER BOOK AT P AGE 11 COPY OF ASSESSMENT ORDER PASSED U/S 143 (3) IS ALSO ENCLOSED WHICH IS DATED 14 TH NOVEMBER 2008 IN RESPECT OF ASSESSMENT YEAR 2006-07 WH EREIN ALSO THE NEW ADDRESS OF THE ASSESSEE NAMELY B-38 SOUTH EXTENSION PART I NEW DELHI IS WRITTEN. THE ASSESSEE HAS ALSO ENCLO SED IN THE PAPER BOOK VARIOUS OTHER DOCUMENTS ON MERITS IN WHICH IT HAS BEEN SHOWN THAT THE INVESTMENT IN MUTUAL FUND WAS MADE OUT OF REDEEMED UNITS. THE ASSESSEE HAS ALSO ENCLOSED THE COPY OF THE ORDE R OF HONBLE DELHI HIGH COURT DATED 31 ST AUGUST 2009 IN THE AFOREMENTIONED CASE OF M/S EESHANN HOLDING PVT. LTD. 5. RELYING UPON THE ASSESSMENT ORDER IT IS THE CASE OF L D. DR THAT THE ASSESSMENT COULD NOT BE HELD TO BE INVALID AS THE ASSE SSING OFFICER HAD SERVED THE NOTICE ON THE ASSESSEE WITHIN A PERIOD OF 12 MONTHS OF FILING THE INCOME-TAX RETURN. HE SUBMITTED THAT THO UGH THE ADDRESS MENTIONED ON THE NOTICE WAS NOT THE SAME ADDRESS AS WAS M ENTIONED ON THE RETURN OF INCOME EVEN THEN THE NOTICE WAS I SSUED AND SERVED AT OLD ADDRESS AND HENCE THE ASSESSMENT COULD NOT BE HE LD TO BE INVALID. SIMILARLY HE ARGUED THAT ON MERITS ALSO LE ARNED CIT (A) HAS NOT GIVEN ANY FINDING AND THEREFORE THE SAID ADDITION SHOULD BE UPHELD. ITA NO.4041/DEL/2010 5 6. ON THE OTHER HAND RELYING UPON THE SUBMISSIONS MADE BEFORE THE CIT (A) AND THE DOCUMENTS FURNISHED IN THE PAPER BOOK IT IS THE CASE OF LD. AR THAT CIT (A) HAS RIGHTLY ANNULLED THE ASSESSMENT ON THE GROUND OF NON-SERVICE OF NOTICE. HE SUBMITTED THAT T HE JUDICIAL DECISIONS RELIED UPON BEFORE HIM ARE VERY RELEVANT FO R UPHOLDING THE ORDER OF THE CIT (A). 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. BEFORE THE CIT (A) I T HAS BEEN THE CASE OF THE ASSESSEE THAT NO NOTICE U/S 143 (2) WAS SERVED WITH IN THE STATUTORY PERIOD OF 12 MONTHS FROM THE END OF THE MON TH IN WHICH THE RETURN WAS FURNISHED. THE NOTICES STATED TO BE SERVED B Y THE ASSESSING OFFICER WERE SENT ONLY AT THE OLD ADDRESS DESPITE THE F ACT THAT NEW ADDRESS WAS VERY MUCH MENTIONED ON THE RETURN OF INCOM E FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THESE FACTS STA TED BY THE ASSESSEE BEFORE THE CIT (A) HAVE BEEN FOUND TO BE CORRE CT AND ON THE BASIS OF THESE FACTS LEARNED CIT (A) HAS ANNULLED THE A SSESSMENT. NO ADVERSE MATERIAL HAS BEEN BROUGHT ON RECORD TO SUGGEST THAT SUCH FINDING RECORDED BY THE CIT (A) ARE CONTRARY TO THE RECORD. NOW THE POSITION OF LAW IS WELL ESTABLISHED BY THE VARIOUS DECISI ONS OF JURISDICTIONAL HIGH COURT AND THE HONBLE SUPREME CO URT THAT IN THE ABSENCE OF SERVICE OF NOTICE U/S 143 (2) WITHIN THE PR ESCRIBED PERIOD THE ASSESSMENT ORDER WILL BE NULL AND VOID. SOME OF TH ESE JUDICIAL PRECEDENTS HAVE BEEN MENTIONED BY THE LEARNED CIT (A ) IN HIS ORDER. FROM THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF M/S EESHANN HOLDING PVT. LTD IT IS CLEAR THAT IF THE NEW ADDRESS HAS COME TO THE NOTICE OF THE DEPARTMENT THEN THE SERVICE O F NOTICE AT OLD ADDRESS WILL NOT BE A VALID SERVICE. IN THE SAID CASE THE DEPARTMENTAL APPEAL WAS DISMISSED BY THE HONBLE HIGH COURT WHEREIN THE TRIBUNAL HAD HELD THAT THE FIRST NOTICE HAVING BEEN SERVED AT THE OLD ADDRESS WAS NOT A VALID SERVICE IN VIEW OF AVAILABILITY OF FR ESH ADDRESS BY THE ITA NO.4041/DEL/2010 6 ASSESSEE. MOREOVER THE FACT REMAINS THAT AT NEW ADDRESS NO NOTICE U/S 143 (2) WAS SERVED WITHIN THE PERIOD OF 12 MONTHS F ROM THE END OF THE MONTH IN WHICH THE RETURN OF INCOME WAS FILED. I T CANNOT BE THE CASE OF THE DEPARTMENT THAT THE NEW ADDRESS WAS NOT AVA ILABLE WITH IT AS THE NEW ADDRESS WAS VERY MUCH GIVEN ON THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION. THE HONBLE SUPRE ME COURT IN THE CASE OF ACIT VS. HOTEL BLUEMOON 320 ITR 362 HAS HELD T HAT THE REQUIREMENT OF SERVICE OF NOTICE U/S 143 (2) IS MANDAT ORY AND IN THE ABSENCE OF SUCH SERVICE THE ASSESSMENT FRAMED WILL BE INV ALID. IN THIS MANNER THE VIEW TAKEN BY THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT VS. PAWAN GUPTA AND ORS 318 ITR 322 (DEL) WAS CONFIRMED. IN THIS VIEW OF THE SITUATION HAVING REGARD TO THE F ACTS OF THE CASE AND THE CASE LAW AVAILABLE ON THE SUBJECT WE ARE OF THE OPINION THAT THERE IS NO INFIRMITY IN THE ORDER OF THE CIT (A) VIDE WHI CH THE ASSESSMENT FRAMED HAS BEEN HELD TO BE INVALID. WE DECLINE TO I NTERFERE. 8. SO AS IT RELATES TO THE ISSUE RAISED BY THE REVENUE I N RESPECT OF MERITS OF THE ADDITION IT HAS ALREADY BEEN POINTED O UT THAT THE CIT (A) HAS NOT GONE INTO THE MERITS OF THE CASE THEREFORE T HIS ISSUE DOES NOT ARISE OUT OF THE ORDER OF THE CIT (A). THEREFORE W E DECLINE TO ADJUDICATE ON THIS ISSUE. 9. IN THE RESULT THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED IN THE MANNER AFORESAID. 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 14.01 .2011. SD/- SD/- [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 14.01.2011. DK ITA NO.4041/DEL/2010 7 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES