SHYAM SUNDER SHARMA HUF, Jaipur v. ITO, Jaipur

ITA 727/JPR/2013 | 2003-2004
Pronouncement Date: 21-10-2013 | Result: Allowed

Appeal Details

RSA Number 72723114 RSA 2013
Assessee PAN AAIHS0824G
Bench Jaipur
Appeal Number ITA 727/JPR/2013
Duration Of Justice 1 month(s) 17 day(s)
Appellant SHYAM SUNDER SHARMA HUF, Jaipur
Respondent ITO, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 21-10-2013
Assessment Year 2003-2004
Appeal Filed On 04-09-2013
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR BEFORE SHRI B.R. JAIN ACCOUNTANT MEMBER ITA NO. 727/JP/2013 ASSESSMENT YEAR: 2003-04 PAN NO. AAIHS0824G SHYAM SUNDER SHARMA HUF VS. INCOME TAX OFFICER C-1 KRISHNA APARTMENT JAIPUR. WARD 3(2) JAIPU R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.L. GUPTA F.C.A. RESPONDENT BY : SHRI D.C. SHARMA. DATE OF HEARING : 11.10.2013 DATE OF PRONOUNCEMENT : 21.10.2013 ORDER PER B.R. JAIN A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 16 TH JULY 2013 OF LD. CIT (APPEALS)-1 JAIPUR RAISES THE FOLLOWING GROUNDS :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS)-1 JAIPUR IS WRONG UNJUST AND HAS ERR ED IN LAW PERMITTING THE RE-OPENING OF THE ASSESSMENT BY RESO RT OF PROVISION U/S 147 IN SPITE OF THE FACT THAT NO NOTICE U/S 14 8 WAS SERVED TO THE ASSESSEE WITHIN THE TIME LIMIT MENTIONED U/S 149 OF THE I.T. ACT 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS)-1 JAIPUR IS FURTHER WRONG UNJUST AND HAS ERRED IN LAW IN UPHOLDING THE ADDITION OF RS. 2 00 000/- AS INCO ME FROM UNDISCLOSED SOURCES ALLEGING THE NON GENUINENESS O F THE TRANSACTION OF GIFT IN SPITE OF THE FACT THAT FULL IDENTITY AN D ADDRESS OF THE DONOR A GIFT DEED AND BANK ACCOUNT WAS PROVIDED TO VERIFY THE FACT.. 2 3. THE APPELLANT PRAYS YOUR HONOURS INDULGENCE TO ADD AMEND OR ALTER ALL OR ANY OF THE GROUND OF THE APPEAL ON OR BEFORE THE DATE OF HEARING. 2. BRIEFLY THE FACTS ARE THAT AN ACTION U/S 132(1) OF THE I.T. ACT 1961 WAS CARRIED ON 12/4/2005 AT THE PREMISES OF B.C. PUROHI T AND COMPANY AND SHRI KRIPA SHANKAR SHARMA AND ITS ASSOCIATES AT JAIPUR AND KOL KATA. THESE PERSONS WERE INDULGED IN PROVIDING ACCOMMODATION ENTRIES. AT THE TIME OF PROCEEDINGS U/S 153A OF THE ACT IN THE CASE OF SHRI KRIPA SHANKAR S HARMA THE ENTRY PROVIDER THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE M/S SHY AM SUNDER SHARMA HUF HAD RECEIVED A SUM OF RS. 2 00 000/- THROUGH HIS ASSOCI ATED PERSON SHRI RAJ KUMAR ON 04/4/2002 AS GIFT. SINCE SHRI SHYAM SUNDER SHARMA A ND HIS FAMILY MEMBERS WERE LIVING AT DHANBAD THE INFORMATION RECEIVED FROM IN VESTIGATION WING OF THE INCOME TAX DEPARTMENT WAS COMMUNICATED TO THE ADDIT IONAL COMMISSIONER OF INCOME TAX RANGE DHANBAD DHANBAD (JHARKHAND) VIDE OFFICE LETTER NO. 1678 DATED 28/3/2008. THE ITO WARD-II(2) DHANBAD ISSUE D NOTICE U/S 148 OF THE ACT ON 25/3/2010 AND SERVED THE SAME ON THE ASSESSEE ON 28/3/2010 AT THEIR ADDRESS LAL BAZAR JHARIA DHANBAD. IN RESPONSE THERETO HOWEVER NO RETURN OF INCOME WAS FILED. IN RESPONSE TO NOTICE U/S 142(1) ONE SH RI SUNIL KUMAR KHARKIA F.C.A. FILED AN APPLICATION BEFORE THE I.T.O. WARD-II(2) DHANBAD STATING THAT THE RETURN OF INCOME FOR ASSESSMENT YEAR 2003-04 AND ONWARDS H AVE BEEN FILED WITH I.T.O. WARD-3(2) JAIPUR AND REQUESTED TO TRANSFER THE CAS E RECORD TO JAIPUR. ACCORDINGLY THE CASE RECORD STOOD TRANSFERRED TO I.T.O. AT JAIP UR VIDE LETTER NO. 412 DATED 26/11/2010. THE ASSESSEE OBJECTED TO THE SERVICE OF NOTICE AND FAILED TO FILE 3 INFORMATION OR DETAILS CALLED FOR VIDE NOTICE U/S 1 42(1) OF THE ACT. THE ASSESSMENT STOOD COMPLETED U/S 144 OF THE ACT BY MAKING ADDITI ON OF RS. 2 00 000/- AS INCOME FROM UNDISCLOSED SOURCES WITH THE INCOME OF RS. 1 67 440/- FILED ORIGINALLY BY THE ASSESSEE. 3. IN APPEAL THE LD. CIT(APPEALS) TOOK NOTE OF THE FACT THAT ON 16/11/2010 SHRI SUNIL KUMAR KHARKIA FCA/AR FILED AN APPLICATIO N BEFORE THE I.T.O WARD- II(2) DHANBAD STATING THAT THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04 AND ONWARDS WAS FILED WITH I.T.O. WARD-3(2) JAIPUR AND REQUESTED THE CASE TO BE TRANSFERRED. THE REQUEST FOR TRANSFER WAS CARRIED O UT ON 26/11/2010. IN VIEW OF THIS FACT AND THE ASSESSMENT ORDER REVEALING THAT THE NO TICE U/S 148 OF THE ACT ISSUED ON 25/3/2010 STOOD SERVED ON ASSESSEE ON 28/3/2010 AT THEIR ADDRESSES AT LAL BAZAR JHARIA DHANBAD DID NOT AGREE WITH THE CLAIM OF T HE ASSESSEE THAT THE NOTICE U/S 148 OF THE ACT WAS NOT SERVED ON HIM. HE THEREFORE REJECTED THE LEGAL GROUND AND SUSTAINED THE ADDITION OF RS. 2 00 000/- AS THE GEN UINENESS OF THE GIFT HAS NOT BEEN ESTABLISHED. 4. IN APPEAL THE ASSESSEES COUNSEL ASSAILING THE IMPUGNED ORDER CONTENDS THAT THE ASSESSEE HAS ALL ALONG BEEN STATING BEFORE THE AUTHORITIES BELOW THAT NOTICE U/S 148 OF THE ACT HAS NOT BEEN SERVED UPON HIM AND THE APPELLANT DOES NOT RESIDE AT LAL BAZAR JHARIA DHANBAD NOR HAS ANY CONNECT ION WITH THAT ADDRESS. THE DEPARTMENT HAS ALSO NOT BROUGHT ANY EVIDENCE TO SHO W THE SERVICE OF ALLEGED NOTICE AT DHANBAD ADDRESS. THE LD. CIT(A) MISDIRECT ED HIMSELF ON THE REQUEST OF TRANSFER OF CASE MADE BY ONE SHRI S.K. BHATIA C.A. IN RESPONSE TO NOTICE U/S 4 142(1) OF THE ACT TO TRANSFER THE CASE TO JAIPUR AN D TOOK IT A VALID SERVICE OF NOTICE U/S 148 OF THE ACT ON THE APPELLANT. SINCE THERE I S NO VALID SERVICE OF NOTICE ON THE APPELLANT AT ITS KNOWN ADDRESS AT JAIPUR THE NOTIC E SO ISSUED IS REQUIRED TO BE QUASHED AND ASSESSMENT ANNULLED. 5. ON THE OTHER HAND THE LD. D.R. PLACED RELIANCE ON THE FINDINGS CONTAINED IN THE ORDER OF THE AUTHORITIES BELOW AND ALSO PRODUCE D ASSESSMENT RECORD AS WELL AS THE COPY OF LETTER DATED 28/3/2008 WRITTEN VIDE NO. ITO/WARD-3(2)/JPR/2007- 08/1678 AND LAID THE COPY THEREOF ON RECORD. HE HAS ALSO ADMITTED THAT A NOTICE ISSUED U/S 148 OF THE ACT AT DHANBAD ADDRESS BY SPE ED POST STOOD RETURNED WITH THE REMARK NOT KNOWN. COPY OF THE ENVELOP HAS ALSO BE EN LAID ON RECORD OF THE TRIBUNAL. IN ANY EVENT IT IS CONTENDED THAT SHRI S UNIL KUMAR KHARKIA C.A. IS THE SAME PERSON WHO RECEIVED NOTICE U/S 148 OF THE ACT AND ALSO MADE COMPLIANCE TO THE SUBSEQUENT NOTICE U/S 142(1) OF THE ACT ON BEHA LF OF THE ASSESSEE AND THUS THE SERVICE HAS BEEN TAKEN AS A VALID SERVICE OF NOTICE UPON HIM. 6. IN REJOINDER THE LD. COUNSEL FOR THE ASSESSEE C ONTENDS THAT HE HAS NO CONCERN OR CONNECTION WITH SHRI SUNIL KUMAR KHARKIA C.A. NOR HE IS AN AUTHORIZED PERSON TO RECEIVE THE NOTICE U/S 148 OF THE ACT. ANY SERVICE MADE ON SAID C.A. CANNOT BE TAKEN AS SERVICE UPON THE APPE LLANT. THE REVENUE HAS NOT PROVED THE SERVICE. 7. HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECO RD. IN THIS CASE THE ADDITIONAL COMMISSIONER OF INCOME TAX RAGE-II DHA NBAD ACCORDED APPROVAL TO THE SATISFACTION NOTE DATED 22/3/2010 WHICH IS REP RODUCED AS UNDER:- 5 SRI SHYAM SUNDER SHARMA HUF LAL BAZAR JHARIA DHANBAD ASSTT. YEAR 2003-04 22/03/10 ONE SRI SHYAM SUNDER SHARMA HUF LAL BAZ AR JHARIA DHANBAD IS ASSESSED TO TAX WITH THE UNDERSIGNED. A SEARCH & SEIZURE OPERATION U/S 132(1) OF THE I.T. ACT 1961 WAS CARR IED OUT ON 12.04.2005 IN THE CASE OF M/S B.C. PUROHIT & CO. AN D ITS ASSOCIATES AT JAIPUR AND KOLKATTA. THE MAIN ALLEGATION LEADING TO THE SEARCH WAS THAT M/S B.C. PUROHIT & CO. AND THE PERSON ASSOCIAT ED WITH AND OPERATING A RACKET FOR CONVERTING BLACK MONEY INTO WHILE. IT WAS ALSO FOUND THAT THEY WERE PROVIDING BOGUS ENTRIES FOR GI FTS LOANS SHARES APPLICATION MONEY LONG TERM CAPITAL GAIN ETC.. THI S FACT WAS BROUGHT INTO THE NOTICE ONLY AFTER RECEIPT OF THE INFORMATI ON FROM THE ITO WARD-3(2) JAIPUR VIDE HIS LETTER NO. ITO/W-3(2)/JP R/2007-8/1678 DATED 28.03.2008. IN THE INSTANT CASE ONE SRI SHYAM SUNDER SHARMA H UF HAS ALSO ACCOMMODATED CAPITAL OF RS. 2 00 000/- ONLY IN THE SHARE OF GIFT FROM SRI RAJ KUMAR ON 04.04.2002. IN VIEW OF THE FACT NARRATED ABOVE IT IS REASON TO BELIEVE THAT THERE IS ESCAPED ASSESSMENT TO THE EXTENT OF RS. 2 00 000/- FOR THE ASSTT. YEAR 2003-04 WITH THE MEANING OF SEC. 147 OF THE I.T. ACT 1961 AND THEREFORE IT IS A FIT CASE TO ISSUE NOTIC E U/S 148 OF THE I.T. ACT FOR THE ASSTT. YEAR 2003-04. IF SATISFIED WITH THE REASON RECORDED NECESSARY APP ROVAL MAY BE ACCORDED TO ISSUE NOTICE U/S 148 OF THE I.T. ACT 1961 FOR THE ASSTT. YEAR 2003-04. ADDL.CIT ITO YES I AM SATISFIED WITH THE REASON RECORDED BY A.O . THAT THIS CASE IS FIT FOR ISSUE NOTICE U/S 148 OF THE I.T. AC T 1961. 24/3/2010 ADDL. CIT R-II DHANBAD (R.K. VISHWAKARMA) ADDL. COMMISSIONER OF INCOME TAX RAGE-II DHANBAD 7.1 THEREAFTER ON 25/3/2010 A NOTICE U/S 148 OF TH E ACT WAS ISSUED ON THE ASSESSEE. RECORD REVEALS THAT THE NOTICE SENT BY SP EED POST AND ADDRESSED TO SHYAM SUNDER SHARMA HUF LAL BAZAR JHARIA DHANB AD STOOD RETURNED ON 6 27/3/2010 WITH THE REMARK NOT KNOWN. THIS NOTICE IS STATED TO HAVE BEEN SERVED UPON SHRI SUNIL KUMAR KHARKIA F.C.A. ON 28/3/2010. NO AUTHORITY OF SAID SUNIL KUMAR KHARKIA HAS BEEN LAID ON RECORD. THE SATISFAC TION NOTE ON WHICH APPROVAL HAS BEEN OBTAINED FROM THE TERRITORIAL ADDL. COMMIS SIONER OF INCOME TAX OF DHANBAD IT IS REVEALED THAT SHYAM SUNDER SHARMA H UF AT LAL BAZAR JHARIA DHANBAD IS STATED TO BE ASSESSED TO TAX WITH ITO WA RD-II(2) DHANBAD. HOWEVER THERE IS NO SUCH MATERIAL OR EVIDENCE AVAILABLE ON ASSESSMENT RECORD PRODUCED BEFORE ME TO SHOW THAT THE SAID SHYAM SUNDER SHARMA HUF HAS EVER BEEN ASSESSED TO TAX AT DHANBAD. THE INFORMATION TAKEN A S BASIS FOR ISSUING NOTICE U/S 148 OF THE ACT AND SENT BY ITO WARD-3(2) JAIPUR V IDE LETTER NO. ITO/WARD- 3(2)/JPR/2007-08/1678 DATED 28/3/2008 TO DHANBAD R EVEALS THE ADDRESS OF THIS HUF AT SERIAL NO. 14 OF THE INFORMATION AS UNDER:- SHYAM SUNDER SHARMA HUF C-4 KRISHNA APARTMENT BANI PARK JAIPUR. THE REASON FOR TRANSMITTING THE INFORMATION FOR TA KING ACTION U/S 148 OF THE ACT TO THE ITO WARD-II(2) DHANBAD BY THE ITO WARD -3(2) JAIPUR HAS NOT BEEN EXPLAINED. THERE IS THUS NO ISSUANCE OF NOTICE U/ S 148 OF THE ACT ON THE KNOWN ADDRESS OF THE APPELLANT. THE SAME IS ALSO NOT FOUN D TO HAVE BEEN SERVED ON THE PERSON NAMED THEREIN. SHRI SUNIL KUMAR KHARKIA F.C .A. IS NOT SHOWN TO BE A PERSON AUTHORIZED FOR RECEIVING NOTICE ON BEHALF OF THE ASSESSEE. THE REVENUE HAS NOT PROVED THE ACTUAL SERVICE OF NOTICE ON THE APPE LLANT. THE REVENUE ALSO DOES NOT DRAW PRESUMPTION U/S 292BB OF THE ACT. UNDER THE TO TALITY OF THE FACTS AND 7 CIRCUMSTANCES AND IN ABSENCE OF ANY MATERIAL AVAILA BLE ON RECORD TO PROVE THAT THE NOTICE WAS SERVED UPON THE ASSESSEE AT ALL WHAT TO SAY OF IN TIME IT CANNOT BE ACCEPTED THAT THE REVENUE HAS EFFECTED THE SERVICE ON ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 282 OF THE ACT. I THEREF ORE QUASH THE NOTICE FOR WANT OF VALID SERVICE AND ANNUL THE ASSESSMENT ACCORDINGLY. 8. HAVING ANNULLED THE ASSESSMENT ALL CONSEQUENCES ON MERIT OF THE GROUND IN APPEAL SHALL FOLLOW AND THEREFORE I DO NOT CONSIDE R IT NECESSARY TO RENDER ANY DECISION ON THE MERITS OF THE ADDITION IN VIEW OF J UDGMENT RENDERED BY THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF RAWATMAL HARAK C HAND LAL V/S CIT 129 ITR 346 (CAL.). 9. IN THE RESULT THE APPEAL BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/10/2013. SD/- (B.R. JAIN) ACCOUNTANT MEMBER JAIPUR DATED : 21/10/2013. * RANJAN COPY FORWARDED TO :- 1. SHYAM SUNDER SHARMA HUF JAIPUR. 2. THE ITO WARD 3(2) JAIPUR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (ITA NO. 727/JP/2013) BY ORDER AR ITAT JAIPUR.