C I T JAIPUR vs. KAMALJEET SINGH AHLUWALIA

By way of this appeal, the appellant has challenged the judgment of the Tribunal whereby the Tribunal has partly allowed

While admitting the appeal, this Court framed the following substantial question of law: “(1) Whether on the facts and circumstances o the case, the learned Income Tax Appellate Tribunal was right and justified in allowing the assessee to raise ground regarding validity of notice under Section 148 of the Act before it for the first time as the said ground was neither raised before the Assessing officer nor before the CIT(A) ? (2) Whether on the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was right and justified in holding that the reassessment proceedings are bad in law as the reasons recorded while issuing notice under Section 148 have no link with the facts not disclosed by the assessee, which is very much incorrect and perverse and also contrary to the law laid down by the Hon’ble Apex Court, which provides that at the time of issuance of notice

Heard learned counsel for the parties.

1 The issue is squarely covered by the decision of this Court in D.B. Income Tax Appeal no.566/2008 (C I T Jaipur Vs. Hanuman Tube Well Co.) decided on 09.05.2017. which reads as under:

Counsel for the appellant contended that tribunal in para no.12 observed as under:- “We have perused the facts of the case. There is no dispute that the assesee has declared all the advances in the impugned year and as stated by the assessee that the work has been completed in the following year and the advance so received has been declared as income in the following year. The required documents of the following year are on record where the assessee has declared the said advances as income. First of all, the issue will arise whether a person can be taxed twice i.e. in the impugned year and also in the following year, as has been done in the present case. It is settled law that no income can be taxed twice. The statement of three persons that they have paid lesser advances will not lead to a conclusion that the assessee has concealed the income of Rs.50.00 lacs as has been held by the authorities below. The ld. AR has pointed out the letter of surrender dt. 17.3.99 (PB 140) which has been surrendered by the tax consultant. The said letter of surrender has not been signed by the assessee. In the case of surrender where the tax liability arises on the assessee, the Department cannot admit such surrenders signed by the Consultant and that too in the absence of any specific power of attorney given to such Consultants. Moreover, the admissions made cannot be held to be conclusive in view of Hon’ble Apex Court decision in the case of treated as Cash Credit u/s 68 of the Act only on the basis of statement of three persons who have also confirmed to have given the advances. The explanation of the assessee appears to be satisfactory with regard to the persons who have given the advances are uneducated and have not come forward to make the statement or have been given defective statement as in the case of three persons mentioned hereinbefore. In the circumstances and facts of the case, the advances received by the assessee which have been declared as income in the following year, cannot be taxed in the impugned year for the reasons mentioned hereinbefore. Hence the orders of the authorities below on this issue are reversed. Thus ground No.2 and 3 of the assessee are allowed.”

Taxman 112 (Delhi) and judgment of Punjab & Haryana High Court in Aravali Engineers (P) Ltd. vs. Commissioner of Income Tax & Anr. (2011) 335 ITR 508 relied upon by the department wherein it has been held as under:- “As regards question (I), we do not find any reason to take a view different from the view taken by the Tribunal. No doubt that an appellate authority can allow a question to be raise for the first time even if such a question was not raised at a lower forum but the discretion to do so has to be exercised in the interest of justice in the facts and circumstances and not mechanically. Normally a question of fact may not be allowed to be raised for the first time as it may prejudice the other side. If such question is raised at the earliest opportunity, the orther side can lead evidence which it may not be able to do if such a question is raised for the first time before the appellate authority. Of course, there can be no total bar on such question being allowed, if interest of justice so requires. In National Thermal’s case (supra) it has not been laid down that in every case a question of fact can be mechanically allowed to be raised for the first time. The Madhya Pradesh High Court in CIT vs. Premium Capital Market & Investment Ltd. (2005) 198 CTR (MP) 680: (2005) 275 ITR 260 (MP) held that question of validity of notice may not be allowed to be raised for the first time in appeal. Subsequent legislative amendment adding s.292BB supports this principle. The question has, thus, to be answered against the assessee. What is clear from the facts stated above that the process server with the tax assistant went to the property which was mentioned in the notice but as the respondent-assessee could not be found at the said address, they took steps and went to the new address which was made available. The respondent-assessee does not dispute that he was residing at the said address. There the notice was served by the affixation. The assessee thereafter in the assessment proceedings had appeared and filed various documents and details. The said documents are available on the file./ After the assessment order was passed u/s 143(3), the respondent filed an appeal. In the ground of appeal no specific ground regarding service of notice u/s 143(2) or or before 31.10.2001 was taken. The said ground was taken belatedly by way of an additional ground. The Tribunal in the impugned order has commented and stated that in the affidavit/service report

We have heard counsel for the appellant.

In view of the submissions made by the counsel for the appellant, the matter is required to be remitted back to the tribunal in view of the fact that tribunal has committed an error in deleting the disallowance and wrongly allowed the appeal preferred by the assessee ignoring the submissions made by the department in this regard.

In view of the above, the issue is answered in favour of the department. The matter is remitted back to the tribunal to decide the same afresh in accordance with law. The order of tribunal is set aside.”

2 Mr. Kasliwal, counsel for the respondent states that he has no instructions in the matter.

Since the appeal is very old, in view of statement of learned counsel for the appellant, we accept his statement and in view of the above decision of this Court, the issue is decided in favour of the Department and against the Assessee.