Shri Shailesh Ranchhodbhai Shah Anand v. The Income Tax Officer Ward 4 Anand

In The Income Tax Appellate Tribunal D Bench Ahmedabad Before Shri S S Godara Judicial Member Shri Pradip Kumar Kedia Accountant Member Sl Nos Ita No S Assessment Year S Appeal S By Appellant Vs Respondent Appellant Respondent 1 653 Ahd 2015 2004 05 Shailesh Ranchhodbhai Shah B 6 Dhanlaxmi Complex Opp Reliance Mall Lambhval Road Anand 388 001 Pan Bcxps 1230 C The Ito Ward 4 Anand 2 654 Ahd 2015 2005 06 Assessee Revenue 3 655 Ahd 2015 2006 07 Assessee Revenue 4 656 Ahd 2015 2007 08 Assessee Revenue 5 657 Ahd 2015 2004 05 Assessee Revenue 6 658 Ahd 2015 2005 06 Assessee Revenue 7 659 Ahd 2015 2006 07 Assessee Revenue 8 660 Ahd 2015 2007 08 Assessee Revenue 9 1182 Ahd 2015 2004 05 Assessee Revenue 10 1183 Ahd 2015 2005 06 Assessee Revenue 11 1184 Ahd 2015 2006 07 Assessee Revenue 12 1185 Ahd 2015 2007 08 Assessee Revenue Assessee By Shri N M Darji Ar Revenue By Shri V K Singh Sr Dr Date Of Hearing 04 12 2017 Date Of Pronouncement 04 12 2017 Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 2 O R D E R Per Pradip Kumar Kedia Am The Captioned Appeals Filed At The Instance Of Th E Assessee Are Against The Separate Orders Of The Commissioner Of Income Tax Appeals 4 Cit A In Short Dated 05 01 2015 22 12 2014 An D 26 02 2015 In The Matter Of Assessment Orders Under S 143 3 R W S 147 Of The Income Tax Act 1961 Hereinafter Referred T O As The Act Dated 26 12 2011 And Penalty Orders Under S 271 1 B 271 1 C Of The Act Dated 29 06 2012 Relevant To Assessment Years Ays 2004 05 To 2007 08 2 Since Common And Interconnected Issues Are Invol Ved In All These Appeals These Appeals Were Heard Together And Are Being Disposed Of By This Common Order For The Sake Of Convenience 3 The Grounds Of Appeal In First Bunch Of Four Ap Peals I E Ita Nos 653 To 656 Ahd 2015 Are Broadly Similar Acco Rdingly All The Four Appeals Are Being Gouped Together For Adjudication Purposes 4 We Shall First Take Up The Ita No 653 Ahd 2015 Ay 2004 05 The Common Grounds Of Appeal Raised By The Assessee Read As Under Extracted From Ita No 653 Ahd 2015 Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 3 1 The Ld Cit A Has Erred In Law And In Facts In Confirming The Order U S 144 Rws 147 Of The Act Dtd 26 12 2011 Pa Ssed By The Ld Ao As The Appellant Has Not Been Served Any Of T He Statutory Notices Issued U S 148 And 142 1 Of The Act As Sta Ted In The Assessment Order The Ld Ao Has Therefore Not Assumed The Jurisdictio N U S 147 Of The Act To Reopen The Assessment The Order Passed By The Ao U S 144 Rws 147 Of The A Ct Is Therefore Void Ab Initio 2 The Ld Cit A Is Not Justified In Confirming Th E Reopening Of The Assessment By The Ao Assessing Total Income At Rs 638000 Relying On The Information Received From The Police Inspector Lcb Anand Being In The Nature Of Bank Statements Which Are Not The Books Of Accounts Of The Assessee As Per Case Laws And Therefore The Case Of The Appellant Is Not Covered By The Pro Vision Of Section 68 Of The Act 3 Without Prejudice To The Grounds Of Appeal No 1 And 2 Above Reserving The Right To Emphasis In Both The Ground S Of Appeal No 1 And 2 Above The Appellant May Kindly Be Given The Further Opportunity Of Being Heard Before The Ao On The Pri Nciple Of Natural Justice As The Appellant Has Not Been Serve D Any Statutory Notice Issued By The Ao And The Cit A Has Dismisse D The Appeal In Very First Appeal Hearing Fixed On 05 01 2015 5 When The Matter Was Called For Hearing The Ld Ar For The Assessee At The Threshold Raised Issue Regarding Ju Risdictional Defect In Passing The Assessment Order Under S 144 Rws 147 Of The Act For Ays 2004 05 2005 06 2006 07 2007 08 On The Ground T Hat Notice Issued Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 4 Under S 148 Of The Act Was Not Served Upon The Asse Ssee It Was Similarly Submitted That Notice Purportedly Issued Under S 142 1 Of The Act Was Also Not Served Upon The Assessee The Ld Ar Contended That In The Absence Of Proper Service Of Statutory Notices The Assessing Officer Ao Was Not Empowered To Pass The Impugned Assessm Ent Orders Appealed Against The Ld Ar Vehemently Contended Th At The Impugned Orders Passed By The Ao Under S 144 Rws 147 Of The Act Are Void Ab Initio For Want Of Service Of Statutory Notices 6 To Support The Non Service Of Notices Under S 148 And 142 1 Of The Act The Ld Ar Adverted Our Attention To An Applica Tion Made Under Rule 29 Of The Income Tax Appellate Tribunal Rules 1963 And Pleaded For Admission Of Additional Evidences In The Form Of Af Fidavit Of The Assessee Dated 09 09 2017 Original Decree Of The Family Cou Rt Dated 3107 2013 Etc Making Reference To The Affidavit Dated 09 09 2017 The Ld Ar Submitted That The Assessee Was Not Staying At The Address G 2 Ansul Apartment V V Nagar Anand Where The Notices Unde R S 148 And 142 1 Were Purportedly Issued The Notice Issued At The Aforesaid Address Was Probably Received By Ex Wife Bindu Who Is Not The A Uthorized Person On Behalf Of The Assessee The Ld Ar Accordingly Subm Itted That In View Of The Aforesaid Affidavit And The Divorce Decree In T His Regard The Statutory Notice For Assumption Of Jurisdiction Under S 148 A Nd Consequent Notice Under S 142 1 Was Issued To A Wrong And Unauthoriz Ed Person And Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 5 Therefore The Entire Proceedings Are Devoid Of Legi Timacy The Ld Ar Submitted That Impugned The Assessment Orders In Ap Peal As Well As Penalty Orders Passed Under S 271 1 B And 271 1 C For Ays 2004 05 2005 06 2006 07 2007 08 Were Given To Him 26 02 2013 Consequent Thereto An Appeal Was Filed Before The Cit A Thereafter Under These Circumstances The Ld Ar Contended That All The Assessment Orders And Consequential Penalty Orders Under S 271 1 B 271 1 C Of The Act Requires To Be Quashed At The Threshold 7 The Ld Dr On The Other Hand Strongly Opposed T He Wrongful Services Of Statutory Notices Alleged On Behalf Of The Assessee The Ld Dr Pointed Out That The Assessee Has Not Been Ab Le To Demonstrate That Any Other Address Other Than Ansul Apartment Addres S Where The Notice Has Been Served Was Brought On Record Of The Depar Tment The Ld Dr Contended That The Income Tax Proceedings Includin G Assessment And Penalty Proceedings Are Required To Be Carried Out And Proceeded In A Time Bound Manner And Are Fettered By Bar Of Limita Tion As Prescribed In The Statute The Notice Under S 148 Was Issued To The Assessee At The Address Made Available To The Department The Same Address Ansul Apartment Is Appearing In The Records Of The Bank Also From Where The Facts Of Unusual Cash Deposits Was Deduced Simi Larly A Notice Under S 142 1 Was Also Served At The Address Notified To Revenue Coupled With Intimation To The Assessee By Way Of Affixture As Prescribed In Law The Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 6 Ld Dr Submitted That In The Total Absence Of Any In Formation Whatsoever On Some New Address As Claimed The Ao Was Left Wit H No Choice But To Issue The Notices At The Address As Available On Re Cord It Was The Duty Of Assessee To Bring Correct Address To The Knowledge Of Department And None Other Hence The Assessee Cannot Blame The R Evenue For Mistake Committed By Him And Cannot Be Take Advantage Of Wr Ong Committed By Himself Under These Circumstances No Fault Can B E Found Attributable To The Revenue The Ld Dr Further Contended That The Assessee Has Not Brought Any Evidence On Record To Controvert The Fi Ndings On Merits Towards Lack Of Explanation On Cash Deposits The Ld Dr Accordingly Submitted That The Order Of The Cit A Does Not Cal L For Any Interference 8 We Have Carefully Considered The Rival Submissio Ns The Assessee Has Moved Application Under Rule 29 Of Itat Rules 1963 For Admission Of Additional Evidences In The Form Of Affidavit Of The Assessee Reiterating Facts Towards Change In Address Along With Court Or Der Towards Divorce Decree With His Wife In Order To Weigh The Admiss Ibility Of These Additional Evidences We Refer To The Income Tax Pr Oceedings Before The Cit A We Note That The Appeal Was Filed Before T He Cit A On 16 07 2013 The Order Was Passed By The Cit A On 05 01 2015 The Assessee Was Privy To The Relevant Additional Evide Nces Such As Court Order Decree Issued By The Family Court At The Time Of Proceedings Before The Cit A No Reasonable Cause Has Been Shown As To Why These Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 7 Evidences Could Not Be Produced Before The Cit A Likewise The Affidavit Only Dwell Upon The Facts Which Were Well Within The Knowledge Of The Assessee At The Time Of Proceedings Before T He Cit A Apparently The Assessee Has Failed To Bring Suffic Ient Cause On Record To Warrant Admission Of Additional Evidences The Pr E Requisites For Admission Of Additional Evidences Are Thus Not Sati Sfied Consequently The Petition For Admission Of Additional Evidences Are Rejected 9 We Shall Now Turn To The Plea Of The Assessee Th At Notice Under S 148 And S 142 1 Was Not Actually Served On The Assessee Per Se And Therefore The Proceedings In Consequence Of Such No Tice Are Void Ab Initio In This Regard We Take Note Of The Statutory Po Sition Whereby Notice Under S 148 Of The Act Is Required To Be Is Sued For Assumption Of Jurisdiction For Re Opening Assessment Under S 148 Of The Act The Ao Has Admittedly Issued Notice At The Address Availab Le As Per Pan Records And Address Registered With The Bank By Assessee Hi Mself Therefore The Address At Which Notice Under S 148 And 142 1 Has Been Issued Cannot Be Labeled As An Erroneous Address The Notice Has Bee N Correctly Issued At The Address Provided The Family Dispute Which Pre Vented The Assessee To Get Hold Of The Statutory Notice Is Of No Conseq Uence To Determine The Bonafides Of Actions Of Revenue Once A Notice Has Been Served On The Right Address The Ao Stands Absolved Of Any Furthe R Duty In This Regard Any Other Interpretation Would Lead To Serious Rami Fications In View Of Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 8 Bar Of Limitation For Issuance Service Of Various S Tatutory Notices An Assessee In Our View Cannot Take Advantage Of Hi S Own Lapse In Not Informing The New Address And Thus Cannot Be Permit Ted To Take A Plea About Non Service Of Notice For Same Having Been Se Rved At Notified Address Thus We Do Not Find Any Substance In The Plea Of The Assessee Questioning Assumption Of Jurisdiction Unders 148 O F The Act A Notice Issued Under S 142 1 Was Not Only Served At The A Ddress So Provided But Was Also Informed To The Assessee By Way Of Affixtu Re In This Regard Therefore The Ao Has Substantially Complied With T He Prescribed Procedure For Service Of Notice For Continuance Of Proceedings The Assessee Has Failed To File A Return Of Income In R Esponse To Notice Under S 148 Of The Act As Well As Failed To Appear The Ao The Ao Has Therefore Rightly Invoked Section 144 Of The Act An D Passed Assessment Order On The Basis Of Material Available On Record In These Circumstances We Do Not Find Merit In The Plea Of The Assessee Towards Jurisdiction For Completion Of Assessment Under S 1 47 148 As Null And Void 10 We Now Advert To The Plea Of The Assessee For Deletion Of Additions On Merits The Assessee Has Sought To Demonstrate That The Dispute With His Wife And Continuous Jeopardy Prevailed Upon Hi M At The Time Of Assessment Etc It Was Contended That The Assessee Was Put In Jail And Went Through Serious Turmoil In His Private Life Therefore In Our Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 9 Considered View Sufficient Mitigating Circumstance S Exist To Warrant A Fresh Opportunity To Explain Has Case Towards Sourc E Of Cash Deposits As Per Assessment Order Therefore We Deem It Expedi Ent To Set Aside The Appellate Order Of The Cit A On Merits And Restore It Back To The File Of Cit A For Fresh Adjudication On Merits After Grant Ing Proper Opportunity To The Assessee As Well As To The Ao In The Resul T Order Of The Cit A Is Set Aside For De Novo Adjudication On Merits 11 Resultantly Appeal Of The Assessee In Ita No 653 Ahd 2015 For Ay 2004 05 Is Allowed In Part For Statistical Purposes 12 We Next Take Up The Assessees Appeals In I Ta Nos 654 655 And 656 Ahd 2015 For Ay 2005 06 2006 07 2007 08 Resp Ectively Both The Sides Consented That Identical Issues Are Invo Lved In These Three Appeals Too Thus For Parity Of Reasons Noted Abov E Our View In Ita No 653 Ahd 2015 For Ay 2004 05 Above Shall Apply Mutatis Mutandis To These Appeals Captioned Above As A Result All T He Appeals Of The Assessee In Ita Nos 654 655 656 Ahd 2015 For Ays 2005 06 2006 07 2007 08 Respectively Are Allowed In Part For Statistical Purposes 13 We Now Take Up The Assessees Appeals In Ita N Os 657 658 659 660 Ahd 2015 For Ays 2004 05 2005 06 2006 0 7 2007 08 Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 10 Respectively Pertaining To Imposition Penalty Under S 271 1 B Of The Act For Non Compliance Of Statutory Notices Issued For Completion Of Assessment 14 In View Of The Claim Of The Assessee That He Was Not Privy To The Statutory Notices Issued From Time To Time For Comp Liance We Find Merit In The Plea Of The Assessee That Mitigating Circums Tances Exist For Cancellation Of Penalty Resultantly Penalty Orde Rs Passed Under S 271 1 B Appealed Against In Aforesaid Ita Nos 6 57 658 659 660 Ahd 2015 For Ays 2004 05 To 2007 08 Are Quashed And Penalty Imposed Under S 271 1 B Is Cancelled In All The A Ppeals 15 We Now Take Up The Assessees Appeals In Ita No S 1182 1183 1184 1185 Ahd 2015 For Ays 2004 05 2005 06 2006 07 2007 08 Respectively Which Relate To Consequential Penalty Imposed Under S 271 1 C Of The Act Emanating From Respective As Sessment Orders Passed In Ita Nos 653 654 655 And 656 Ahd 2015 Su Pra Since The Appellate Orders Of The Cit A Arising In The Respe Ctive Assessment Orders Have Been Set Aside And Restored Back To The File O F Cit A The Penalty Imposed Under S 271 1 C Of The Act Is Cancelled I N All These Appeals A Fresh Liberty Is However Granted To The Ao To Exe Rcise Its Discretion Towards Imposition Of Penalty On The Issues Involve D In The Respective Assessments Afresh In Accordance With Law On Adjudi Cation Of The Issues Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 11 Involved In Quantum On Merits In View Of The Abov E Appeal Of The Assessee For Cancellation Of Penalty In The Impugne D Appeals Are Allowed For Statistical Purposes Thus These Four Appeals Of The Assessee Are Allowed 16 In The Result Assessees Appeals In Ita Nos 1 182 1183 1184 1185 Ahd 2015 For Ays 2004 05 2005 06 2006 07 2 007 08 Respectively Are Allowed For Statistical Purposes 17 In The Combined Result I Ita Nos 653 To 656 Ahd 2015 For Ays 2004 05 To 2007 08 Are Allowed In Part For Statistical Purposes Ii Ita Nos 657 To 660 Ahd 2015 For Ays 2004 05 To 2007 08 Are Allowed Iii Ita Nos 1182 To 1185 Ahd 2015 For Ays 2004 05 To 20 07 08 Are Allowed For Statistical Purposes This Order Pronounced In Open Court On 04 1 2 201 7 Sd Sd S S Godara Pradip Kumar Kedia Judicial Member Accountant Member Ahmedabad Dated 04 12 2017 T C Nair Sr Ps Ita Nos 653 To 660 Ahd 2015 Ita Nos 1182 To 1185 Ahd 2015 Shailesh Ranchhodbhai Shah Vs Ito Asst Years 2004 05 To 2007 08 12 Copy Of The Order Forwarded To 1 0 The Appellant 2 1 0 The Respondent 3 234 5 Concerned Cit 4 5 The Cit A 4 Vadodara 5 67 34 34 2 Dr Itat Ahmedabad 6 9 Guard File By Order 16 True Copy Dy Asstt Registrar Itat Ahmedabad 1 Date Of Dictation 4 12 2017 Dictation Pad 27 Pages Attached At The End Of This Appeal File 2 Date On Which The Typed Draft Is Placed Before The Dictating Member 5 12 2017 3 Other Member 4 Date On Which The Approved Draft Comes To The Sr P S P S 5 Date On Which The Fair Order Is Placed Before The D Ictating Member For Pronouncement 6 Date On Which The Fair Order Comes Back To The Sr P S P S 5 12 17 7 Date On Which The File Goes To The Bench Clerk 5 12 17 8 Date On Which The File Goes To The Head Clerk 9 The Date On Which The File Goes To The Assistant Re Gistrar For Signature On The Order 10 Date Of Despatch Of The Order