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PER N.K. SAINI, VICE PRESIDENT
This is an appeal by the Assessee against the order dt. 21/02/2019 of Ld. CIT(A)-4, Ludhiana.
Following grounds have been raised in this appeal:
That in the facts and circumstances of the case the Ld CIT (Appeal) A.O. has erred in law in making addition of Rs 4,50,000/- in the case of assessee .Notice u/s 148 dated 26/03/2017 was never served upon/ received by the assessee.
2. That in the facts and circumstances of case the Ld CIT(A) has erred in law in confirming the order u/s 144 dated 30/11/2017 passed by the assessing officer when notice u/s 148 issued by A.O. was not sent to the assessee on his address H.No. 532 Milk Colony, Dhanas, Chandigarh before the specified date i.e. 31/03/2017. Notice under section 148 was sent at house No 1, sector 39D, Chandigarh which are quarters of Chandigarh Police where father of the assessee residing during service. 3. That the correct address of the assessee was available in the bank account of assessee which was obtained by the assessing officer from Axis Bank, Chandigarh. The return of income filed for AY 2012-2013 was available in ITD having his correct address.
That in the facts and circumstances of the case Ld CIT(A )has erred in law in dismissing the rectification application of assessee in its order passed in appeal No.92/ROT(10425)/CHD/IT/CIT(A)-4/LDH/2017-18 dated 21/02/2019.
5. That in the facts and circumstances of the case Ld CIT(A )has erred in law in holding the service of notice u/s 148 dated 26/03/2017 valid only on the ground that service of notice u/s 148 has not been taken as ground of appeal
. In the statement of facts of appeal in form no. 35 it has been clearly stated that notice u/s 148 was never received by the assessee.
6. That the finding of Ld CIT(A) is misplaced one that notice u/s 148 has been served upon the assesse . The assessee not resided on the address after 2008 where the notice is claimed to have been served/ affixed by the department.
7. The Ld CIT(A) has not adjudicated the compliance of A.O to section 282(1) of the income Tax Act 1961 read with Rule 127 (2)(iii) of the Income Tax Rules 1962.
That without prejudice to the claim of service of notice u/s 148 the assessee's claim on merit of the case has not been adjudicated in order u/s 250(6) dated 28/08/2018 neither in order u/s 154 dated 21/02/2019.
9. In the facts and circumstance of the case if the ex-party order / assessment without service of notice u/s 148 upon the assessee is to be held as valid assessment then on contract receipts of Rs 12,30,976/- income of the assessee will work out to below taxable limit i.e.Rs 98480/- u/s 44AD
In the facts and circumstances of the case the ex-parte assessment of the assessee be restored to the file of assessing officer for afresh adjudication after compliance to the notice u/s 148.
In the facts and circumstances of the case the assessee be allowed to alter, modify any of the grounds of appeal at the time of hearing.
Facts of the case in brief are that the A.O. received information that the assessee had deposited a sum of Rs. 4,50,000/- with Axis Bank, Sector 17-B, Chandigarh but no return of income was filed, he therefore initiated the proceedings under section 147 r.w.s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’). However in response to the notice under section 148 of the Act, no return was filed by the assessee, therefore the A.O. invoked the provisions of Section 144 of the Act and assessed the income at Rs. 4,50,000/-.
4. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and challenged the initiation of the proceedings under section 147 of the Act and stated that no notice under section 148 of the Act was ever served upon the assessee. It was further stated that the amount deposited in the Axis Bank amounting to Rs. 4,50,000/- were personal savings which would be explained after examination of credit and debit in the bank account. It was also stated that the some amount was received at the time of marriage in the form of Shagun/gift from the friends and relatives. However the Ld. CIT(A) did not find merit in the submissions of the assessee and sustained the addition made by the A.O. Thereafter the assessee filed an application under section 154 of the Act before the Ld. CIT(A) and submitted that this contention of the assessee that no notice under section 148 of the Act was served had not been considered. It was also stated that the issue relating to non service of notice under section 148 dt. 26/03/2017 be admitted as additional ground under Rule 46A of the Income Tax Rules 1962. The Ld. CIT(A) However did not find merit in the submissions of the assessee by observing that the additional ground of appeal could not have been taken by the assessee after the appeal had been already decided.
Now the Assessee is in appeal.
Ld. Counsel for the Assessee reiterated the submissions made before the authorities below and further submitted that neither the A.O. nor the Ld. CIT(A) appreciated the facts in right perspective and even the Ld. CIT(A) had not disposed off the legal ground taken by the assessee relating to service of notice under section 148 of the Act. It was contended that the A.O. had not afford any opportunity of being heard to the assessee.
In his rival submissions the Ld. Sr. DR strongly supported the orders of the authorities below.
8. I have considered the submissions of both the parties and perused the material available on the record. In the present case it is an admitted fact that the A.O. framed the assessment under section 144 of the Act ex-parte and the Ld. CIT(A) had also not commented on the submission of the assessee relating to service of notice. It is also noticed that the legal issue relating to service of notice under section 148 of the Act was not specifically raised before the Ld. CIT(A), however in the written submission (which had been incorporated by the Ld. CIT(A) in his order dated 28/08/2018 ) the assessee during the course of first appellate proceedings vide letter dt. 07/06/2018 had submitted that notice pertaining to the assessment order under section 147 of the Act was never served upon him. In the present case it is not in dispute that the assessee had not filed the return of income, even no response was given to the notice issued under section 148 of the Act and that the A.O. made the impugned addition without affording an opportunity of being heard to the assessee. It is well settled that nobody should be condemned, unheard as per the maxim, “audi alteram pertam”. Therefore by considering the peculiar facts of this case, I am of the view that this matter requires fresh adjudication at the level of the A.O. by providing due and reasonable opportunity of being heard to the assessee. Accordingly this case is set aside to the file of the A.O. to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
In the result, appeal of the assessee is allowed for statistical purposes.