ITO, New Delhi v. Smt Reshma Bhagat, New Delhi

ITA 889/DEL/2010 | 2006-2007
Pronouncement Date: 28-01-2011 | Result: Dismissed

Appeal Details

RSA Number 88920114 RSA 2010
Bench Delhi
Appeal Number ITA 889/DEL/2010
Duration Of Justice 10 month(s) 27 day(s)
Appellant ITO, New Delhi
Respondent Smt Reshma Bhagat, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 28-01-2011
Date Of Final Hearing 24-01-2011
Next Hearing Date 24-01-2011
Assessment Year 2006-2007
Appeal Filed On 03-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F DELHI) BEFORE SHRI G.E. VEERABHADRAPPA HONBLE VICE PRESIDENT AND SHRI A.D. JAIN JUDICIAL MEMBER ITA NO. 889(DEL)2010 ASSESSMENT YEAR: 2006-07 THE INCOME TAX OFFICER SMT. RESHMA BHAGAT WARD 33(4) NEW DELHI. V. R-771 NEW RA JINDER NAGAR NEW DELHI. C.O. NO. 106(DEL)2010 (IN ITA 889(DEL)2010) ASSESSMENT YEAR: 2006-07 SMT. RESHMA BHAGAT R-771 NEW RAJINDER NAGAR V. THE INCOME TAX OFFICER NEW DELHI. W ARD 33(4) NEW DELHI. (APPELLANT) (RESPONDEN T) DEPARTMENT BY: SHRI K. RAVI RAMACHANDRAN SR. DR ASSESSEE BY: SHR I K.R. MANJANI ADVOCATE ORDER PER A.D. JAIN J.M. THIS IS DEPARTMENTS APPEAL AND THE ASSESSEES CROS S OBJECTIONS FOR ASSESSMENT YEAR 2006-07 AGAINST ORDER DATED 10.12.2 009 PASSED BY THE LEARNED CIT(A)XXVII NEW DELHI. ITA 889 & CO 106 2 2. THE GROUNDS RAISED BY THE DEPARTMENT IN ITS APPE AL STATE THAT THE LEARNED CIT(A) HAS ERRED IN TREATING THE ASSESSMENT AS VOID AB INITIO BY HOLDING THAT THE INITIAL NOTICE WAS NEVER SERVED ON THE ASSESSEE WITHOUT CONSIDERING THAT THE ASSESSEE HAD APPEARED BEFORE T HE AO AND THEREFORE THE CASE IS COVERED UNDER THE PROVISIONS OF SECTION 292 BB OF THE I.T. ACT. 3. THE CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE AS FOLLOWS:- THE APPEAL FILED BY THE DEPARTMENT IS FRIVOLOUS B ECAUSE DEPARTMENT RECORD DOES NOT SHOW VALID SERVICE AND IN SUCH CASE S 292 BB CANNOT SAVE THE ILLEGALITY. AT ANY RATE ON MERITS THE ADDITION IS WRONG BECAUSE THE INVESTMENTS IN RBI BONDS IN THIS YEAR IS ` 16 50 000/- AND NOT ` 25 50 000/- AND IT HAS COME FROM THE BANK ACCOUNT OF THE APPELLANT. 4. AS PER THE ASSESSMENT ORDER NOTICE U/S 143(2) O F THE I.T. ACT WAS ISSUED TO THE ASSESSEE ON 17.7.2007 FIXING THE CAS E FOR 1.8.2007 BUT THIS NOTICE COULD NOT BE SERVED AS THE NOTICE SERVER REP ORTED ON 27.7.2007 THAT HE VISITED THE PLACE VARIOUS TIMES TO SERVE THE NOTICE BUT THE ASSESSEE WAS NOT FOUND AVAILABLE AT THE GIVEN ADDRESS; THAT SINCE TH E NOTICE WAS TO BE SERVED ON THE ASSESSEE ON OR BEFORE 31.7.2007 AND THE NOTI CE U/S 143(2) OF THE ACT COULD NOT BE SERVED FOR NON-AVAILABILITY OF THE ASS ESSEE AT THE GIVEN ADDRESS ITA 889 & CO 106 3 THE INSPECTOR OF THE DEPARTMENT WAS DIRECTED TO GET THE SUMMONS SERVED ON THE ASSESSEE BY WAY OF AFFIXTURE; THAT THE INSPECT OR WENT TO THE ASSESSEES ADDRESS ALONG WITH THE NOTICE SERVER AND GOT THE NO TICE SERVED ON THE ASSESSEE BY WAY OF AFFIXTURE ON 25.7.2007; THAT ANO THER NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 2.8.2007 FIX ING THE CASE FOR 17.8.2007 AND WAS SERVED ON THE ASSESSEE THROUGH ONE MS. SHAN TI WHO RECEIVED THE NOTICE ON BEHALF OF THE ASSESSEE; THAT NO ONE ATTEN DED IN RESPONSE TO THIS NOTICE; THAT ANOTHER NOTICE U/S 143(2) OF THE ACT DATED 9.7.2008 WAS SERVED THROUGH POST; THAT IN RESPONSE THE ASSESSEE FILED PETITION DATED 17.6.2008 ON 21.8.2008 RAISING AN OBJECTION THAT THE PROCEEDING S WERE INVALID AS THE FIRST NOTICE WAS SERVED ONLY AFTER TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FILED; THAT THE ASSESSEE REQUE STED TO FILE THE PROCEEDINGS; AND THAT THE ASSESSEE WAS INFORMED THA T THE NOTICE HAD BEEN SERVED ON THE ASSESSEE ON 25.7.2007 WITHIN THE STI PULATED PERIOD BY WAY OF AFFIXTURE AS THE ASSESSEE HAD NOT BEEN AVAILABLE A T HER GIVEN ADDRESS WHEN THE NOTICE SERVER VISITED HER PLACE SEVERAL TIMES F ROM 7.7.2007 (THE DATE ON WHICH THE NOTICE WAS ISSUED) TO 24.7.2007 TO SERVE THE NOTICE. 5. BY VIRTUE OF THE IMPUGNED ORDER THE LD. CIT(A) QUASHED THE ASSESSMENT HOLDING THAT THE INITIAL NOTICE WAS NEV ER SERVED ON THE ASSESSEE. 6. AGGRIEVED THE DEPARTMENT IS IN APPEAL. ITA 889 & CO 106 4 7. THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) WH ILE WRONGLY HOLDING THE ASSESSMENT TO BE VOID AB INITIO FOR THE REASON THAT THE INITIAL NOTICE WAS NEVER SERVED ON THE ASSESSEE FAILED TO CONSIDER TH E FACT THAT THE ASSESSEE HAD APPEARED BEFORE THE AO DUE TO WHICH THE PROVISION S OF SECTION 292 BB OF THE ACT GOT ATTRACTED. IT HAS BEEN CONTENDED THAT IN ACCORDANCE WITH THE PROVISIONS OF THE SAID SECTION ONCE THE ASSESSEE A PPEARED BEFORE THE AO AS NOTED IN THE ASSESSMENT ORDER THE INITIAL NOTICE I S DEEMED TO HAVE BEEN SERVED ON HER. 8. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTH ER HAND HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN CONTENDED THAT THE LD. CIT(A) HAS CORRECTLY HELD THE ASSESSMENT TO BE VOID AB INITIO FOR THE REASON THAT THE INITIAL NOTICE WAS NEVER SERVED ON THE ASS ESSEE. IT HAS BEEN CONTENDED THAT THE SERVICE BY AFFIXTURE IS NO SE RVICE IN THE EYE OF LAW. IT HAS BEEN CONTENDED THAT NO INDEPENDENT WITNESS WAS ASSOCIATED FOR EFFECTING SUCH SERVICE. IT HAS BEEN CONTENDED THAT FURTHER THE PROCESS SERVER HAS NOWHERE DETAILED AS TO ON WHICH DATES HE VISITED TH E ASSESSEES ADDRESS TO SERVE THE NOTICE ON HER. IT HAS BEEN CONTENDED THA T MOREOVER THOUGH AS PER THE ASSESSMENT ORDER THE NOTICE WAS SERVED ON THE ASSESSEE BY AFFIXTURE ON 25.7.2007 IN THE ORDER SHEET ENTRY DATED 21.8.20 08 OF THE AO (COPY FILED) THE NOTICE WAS AFFIXED ON 27.7.2007. ITA 889 & CO 106 5 9. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. FIRST OFF THE LEGAL REQUIREMENT OF ASSOCIATING TWO INDEPENDENT WITNESSES AT THE TIME OF AFFIXTURE DOES NOT STAND FULFILLED IN T HIS CASE. AS PER THE REPORT OF SHRI AJIT MANDAL THE PROCESS SERVER WARD 31(3) NEW DELHI THE SAID PROCESS SERVER HAS SOLEMNLY AFFIRMED AND STATED THA T HE AFFIXED THE NOTICE OF HEARING ISSUED BY THE ITO WARD 31(3) NEW DELHI ADDRESSED TO THE ASSESSEE AT R-771 NEW RAJINDER NAGAR NEW DELHI THE LAST KNOWN ADDRESS OF THE ASSESSEE IN THE PRESENCE OF THE INSPECTOR OF INCOME TAX SMT. D.ANANTHALAKSHMI. 10. THE ABOVE REPORT THUS CLEARLY SHOWS THAT NO IND EPENDENT WITNESS WAS ASSOCIATEAD WHILE AFFIXING THE NOTICE. 11. MOREOVER THE NOTING DATED 24.7.2007 MADE BY TH E PROCESS SERVER ON THE BACK OF THE NOTICE ISSUED TO THE ASSESSEE ON 17 .7.2007 STATES:- BAR BAR JANE PAR PRAPTKARTA NAHEEN MILTA. THUS THIS NOTING DOES NOT EVINCE AS TO EXACTLY ON WHICH DATES THE PROCESS SERVER VISITED THE ASSESSEES ADDRESS. 12. ALL THE ABOVE DISCREPANCIES IN THE SERVICE OF N OTICE BY AFFIXTURE RENDER SUCH SERVICE TO BE NO SERVICE AT ALL IN THE EYE OF THE LAW. AS RIGHTLY NOTED BY THE LEARNED CIT(A) THERE IS NO EVIDENCE ON RECORD REGARDING ANY ATTEMPT OF SERVICE OF NOTICE ON THE ASSESSEE IN THE REGULAR CO URSE BEFORE ORDERING ITA 889 & CO 106 6 SERVICE BY AFFIXTURE. THE LD. CIT(A) RECORDS THA T THERE WAS NO NOTE-SHEET MAINTAINED FOR THE PERIOD PRIOR TO 21.8.2008 TILL WHICH DATE THE STATUTORY TIME FOR SERVICE OF FIRST NOTICE HAD EXPIRED. IT I S NOTEWORTHY THAT THOUGH THE ASSESSEE HAD ASKED FOR INSPECTION OF THE FILE REPEA TEDLY SUCH INSPECTION WAS GRANTED TO THE ASSESSEE ONLY ON THE ASSESSEE HAVING APPROACHED THE HONBLE HIGH COURT IN THE MATTER. 13. APROPOS THE DEPARTMENTS PLEA REGARDING PROVISI ONS OF SECTION 292BB IT WOULD BE APPROPRIATE TO REPRODUCE THE SAI D SECTION HEREUNDER:- NOTICE DEEMED TO BE VALID IN CERTAIN CIRCUMSTANCES. 292 BB. WHERE AN ASSESSEE HAS APPEARED IN ANY PRO CEEDING OR CO- OPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT O R REASSESSMENT IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT WHICH IS REQUIRED TO BE SERVED UPON HIM HAS BEEN DULY SE RVED UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDING OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS (A) NOT SERVED UPON HIM; OR (B) NOT SERVED UPON HIM IN TIME; OR (C) SERVED UPON HIM IN AN IMPROPER MANNER. PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPL Y WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMP LETION OF SUCH ASSESSMENT OR REASSESSMENT. 14. A PERUSAL OF SECTION 292 BB SHOWS THAT THOUGH T HE MAIN SECTION PROVIDES THAT WHERE AN ASSESSEE HAS APPEARED BEFORE THE AO IT SHALL BE ITA 889 & CO 106 7 DEEMED THAT ANY NOTICE UNDER THE ACT ISSUED TO THE ASSESSEE HAS BEEN DULY SERVED ON HIM IN TIME IN ACCORDANCE WITH THE PROVI SIONS OF THE ACT. IN SUCH A CASE THE ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION BEFORE THE AO THAT THE NOTICE WAS NOT SERVED ON HIM OR IT WAS NOT SERVED ON HIM IN TIME OR IT WAS SERVED ON HIM IN AN IMPROPER MANNER . THE PROVISO TO SECTION 292 BB HOWEVER LAYS DOWN THAT WHERE THE ASSESSEE HAS RAISED SUCH AN OBJECTION BEFORE THE COMPLETION OF THE ASSESSMEN T THE PROVISIONS OF THE MAIN SECTION WILL NOT APPLY. IN THE PRESENT CASE THE ASSESSMENT ORDER (RELEVANT PORTION REPRODUCED HEREINABOVE) CLEARLY S HOWS THAT THE ASSESSEE HAD DULY TAKEN THE OBJECTION BEFORE THE AO. THERE FORE IN ACCORDANCE WITH THE PROVISO TO SECTION 292 BB THE PROVISIONS OF TH E MAIN SECTION ARE NOT APPLICABLE. NOT ONLY THIS SECTION 292 BB DOES NO T STATE THAT WHERE THE SERVICE OF NOTICE IS VOID AB INITIO IT SHALL STAND VALIDATED THEREUNDER I.E. U/S 292 BB OF THE ACT. 15. IN VIEW OF THE ABOVE FINDING NO MERIT THEREIN THE GROUND RAISED BY THE DEPARTMENT IS REJECTED. 16. APROPOS THE CROSS OBJECTIONS RAISED BY THE DEP ARTMENT THE FIRST CROSS OBJECTION IS SUPPORTIVE OF THE CIT(A)S ORDER WHEREAS THE SECOND ONE ON MERITS IS STATED BY THE LEARNED COUNSEL FOR THE ASSESSEE TO BE NOT PRESSED. ITA 889 & CO 106 8 17. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS DISMISSED WHEREAS THE CROSS OBJECTIONS OF THE ASSESSEE ARE PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 28.01.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: 28.01.2011 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR