COMMISSIONER OF INCOME TAX vs. MADHVAN GANGADHAR BHANOO

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 351/2013 . . . COMMISSIONER OF INCOME TAX .... Appellant . Through: Mr.Karan Khanna, Sr. Standing . Counsel with Ms. Asmita Kumar, Advocate . . . versus . . . MADHVAN GANGADHAR BHANOO ..... Respondent . Through: Nemo. . . . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE SANJEEV SACHDEVA . O R D E R . 19.08.2013 . . . 1. This appeal filed by the revenue which pertains to assessment year 2006-07 has to be dismissed as it raises purely factual disputes. . 2. The assessing officer had passed an ex parte order dt. 24.12.2008 under Section 144 recording that the respondent assessee had been served by affixation. Addition of Rs.1,27,27,118/- was made, treating the entire investment mentioned in the Annual Information Report as undisclosed income. . 3. The respondent assessee was subsequently informed about the assessment and pending demand by the office of the appellant on telephone at his Pune address. Thereupon the respondent filed an appeal before the CIT (Appeals) and challenged the ex parte proceedings and the order on merits. . 4. The assessee-respondent was working as a Liaison Officer of a foreign company and after his retirement at the age of 68 years, shifted to Pune in September, 2007. The respondent, as per the CIT (Appeals) and the Tribunal had duly informed and had made an application in a prescribed form for correction of address in the PAN data record on 20.9.2007. Though factual finding is not disputed. It is apparent that the assessing officer has not verified or tried to locate and serve notice under section 143(2) at the correct address. He did not even get in touch with the company where the respondent-assessee was earlier working but after the demand was raised, attempts were made to locate him and he was asked to pay up. . 5. In the said circumstances, CIT (Appeals) called for a remand report in view of the factual matrix explained by the respondent assessee. The respondent-assessee had set out and stated the sources of investment of Rs.1,27,287,118/-. In terms of Section 251 of the Income Tax Act, 1961, the First Appellate Authority could not have quashed the assessment order and asked the assessing officer to make a fresh or denovo assessment. In the remand report, the assessing officer did not touch upon the merits or contest the facts stated by the respondent-assessee on the source of investment. He insisted that the ex parte assessment was correct and justified. In view of the facts noted above, the ex parte proceedings were not justified and the appellate authorities were justified in making observations and finding against the assessing officer. . 6. On merits, the CIT (Appeals), had no option but to accept the explanation and stand of the respondent-assessee, which was duly supported by the documents. The respondent-assessee had disclosed and mentioned that he was filing returns declaring substantial taxable and non-taxable income from the assessment years 2001-02 onwards. Amounts/income declared have been mentioned by the First Appellate Authority. The respondent-assessee had also stated that the investments were through bank accounts maintained by him in normal course and details were furnished and not disputed by the assessing officer in the remand report. . 7. Revenue filed an appeal before the Tribunal but again without verification or mentioning result of any enquiry to show that the claim of the respondent-assessee was incorrect and wrong. . 8. In view of the above, we do not see any reason to issue notice in the appeal and it is dismissed in limine. . . . . . SANJIV KHANNA, J. . . . . . . . SANJEEV SACHDEVA, J. . AUGUST 19, 2013 . sv . . . $ R-II-A-22 .