JIWAN LAL ,LUDHIANA vs. ITO, W-2(4), LUDHIANA

आदेश/Order

PER DIVA SINGH :

The present appeal has been filed by the assessee assailing the correctness of the order dated 10/12/2018 of CIT(A)-I, Ludhiana pertaining to 2010–11 assessment year on the following grounds:

l. That the impugned assessment order dated 15.12.2017 passed by the Ld. Assessing Officer, Ludhiana and impugned order dated 10.12.2018 passed by the Ld. CIT (Appeals)-I, Ludhiana is liable to be set aside in view of the most material facts that the Ld. AO has erred in passing the impugned assessment order without giving any opportunity of hearing as admittedly no notice u/s 148 was ever served bv the Ld AO. It is the well settled law that any proceedings initiated u/s 148 of Income Tax Act, 1961 without duly serving the notice to the assessee is bad in law and thus not valid. The consequence flowing from Non/improper service of notice is that

ITA-234/CHD/2019 A.Y. 2010-11 Page 2 of 7

assessment becomes void ab initio. It is submitted that the non service of the notice would lead to render the assessment order a nullity. 2. That the impugned assessment order dated 15.12.2017 passed by the Ld. Assessing Officer, Ludhiana and impugned order dated 10.12.2018 passed by the Ld. CIT (Appeals)-I, Ludhiana is liable to be set aside in view of the most material facts that the Ld. AO in assessment order dated 15.12.2017 on various occasions had stated that the notices were served through affixture. It is relevant to mention here that nowhere in the impugned assessment order the address of the affixture of the notices was mentioned. It is submitted that it is the well settled law that the whenever the notice is served by affixture there should be an evidence on record regarding any individual person being associated with the identification of place at which notices are supposed to be affixed. In the present nowhere in the order, any reference was made to the person identifying the place. Further it is submitted that the Hon'ble Income Tax Appellate Tribunal, Delhi in the case of ESS Aar Exports Vs ITO (2005) had held that if there is no evidence with regard to identification of place of affixture of notice, then the notice u/s 144 is bad in law. The relevant extract of the judgment is reproduced here as under for the kind perusal of this Hon'ble Tribunal:- “There is no evidence of any independent person having been associated with identification of place of business of the assessee. There is no evidence that the process server had persona knowledge of place of business of the assessee and was thus, in a position to identify the same. In the absence of above material evidence notice cannot be accepted as served on the assessee in accordance with law. Constructive knowledge of the above notice cannot be attributed to the assessee. In these circumstances, we hold that assessment made under Section 144 was bad in law. The same is required to be set aside." Further it is submitted that the perusal of the impugned assessment order shows that the Ld. AO Sh. Dara Singh only once attempted to send the notice through post which was never received to the appellant/assessee, thereafter the notices was served through affixtures which were not in the knowledge of the appellant. Further the Ld. AO had never mentioned the address where the notices were affixed. The Hon'ble Delhi High Court in the case of Commissioner of Income Tax Vs. Hotline International Pvt. Limited decided on 03.04.2007 had specifically held that if there is no proper service of notice, then the notice under section 148 is bad in law. The relevant extract is reproduced here as under for the kind perusal of this Hon'ble Tribunal: "Under Order V Rule 17 of the Code of Civil Procedure, the affixation can be done only when the assesse or his agent refuses to sign the acknowledgment or could not be found. Here, in the present case, no effort was made by the Income Tax Department to serve the notice upon the assessed, admittedly, no efforts was made by the serving officer to locate the assessee. Even otherwise, as per Order V Rule 19 of CPC, the notice sent by registered post ought to have been sent along with acknowledgment due but admittedly it was not sent along with acknowledgment due.

ITA-234/CHD/2019 A.Y. 2010-11 Page 3 of 7

So, from the entire material available on record we have no hesitation in holding that there has been no valid service of notice under section 148 of the Act upon the assessee as the same was neither tendered to the assessee or his agent, nor the same was either refused by either of them. Since there has been no proper service of notice on the assessee, we hold that the re- assessment proceedings, resulting in the order, are bad in law" Moreover, it is most important to mention here that the appellant/assessee has admitted that he is in receipt of the notices issued by another officer of the department i.e. Sh. Ashok Kumar Gulati. It is submitted that if there is any malafide intention of the appellant to not to appear before the Ld. AO then why he would accept the other notices. 3. That the impugned assessment order dated 15.12.2017 passed by the Ld. Assessing Officer, Ludhiana and impugned order dated 10.12.2018 passed by the CIT (Appeals)-I, Ludhiana is liable to be set aside in view of the most material facts that no opportunity of being heard was ever given to the appellant/assessee. It is submitted that the impugned order passed without giving any opportunity of hearing is against the principle of natural justice. It is the well settled law that no one should be condemned unheard and the opportunity of being heard should have been granted to the assessee. 4. That the impugned assessment order dated 15.12.2017 passed by the Ld. Assessing Officer, Ludhiana and impugned order dated 10.12.2018 passed by the Ld. CIT (Appeals)-I, Ludhiana is liable to be set aside in view of the most material facts that as it is prima facie clear that the present appellant has been victimized and without any fault suffering a lot. The appellant also went in custody though no offence has been committed by him and he is very poor person doing the job of scooter mechanic and entire family of the appellant is under distress. (emphasis supplied) 2. At the time of hearing no one was present on behalf of the

assessee. However considering the material available on record it

was deemed appropriate to proceed with the present appeal ex-parte

qua the assessee appellant on merit after hearing the ld. CIT-DR.

the fact that the assessee is apparently not aware either of the

statutory rules or the provisions. A perusal of the impugned order

also brings out the fact that admittedly the statutory Appellate

ITA-234/CHD/2019 A.Y. 2010-11 Page 4 of 7

Forum provided to the assessee namely First Appellate Authority in

the facts of the present case has not been availed of by the assessee

effectively. The reasons for making the said observation is evident

not only from the manner in which the prayer in the grounds has

been couched. It is further fortified on a reading of the extract of

the written submissions extracted in the impugned order. These

are reproduced hereunder for the sake of completeness:

"I, Jiwan Lal son of Shri Sham Lai, r/o 151, Industrial Area-A, Cheema Chowk, Ludhiana, am Holder of PAN No. AAWPL7559H. I want to say that I was the owner of firm M/s Jangra Impex (TIN No.3482009920). Ishu Sharma started using my Tin Number without my consent. He started incurring transactions in this account without letting to know about it, because of which in the year 2010 I was arrested from my house and criminal case was registered against me Under Section 420/467/468/471/120-B IPC with P.S. Division No.5, Ludhiana and was bearing Case No.213. I was sent to Central Jail, Ludhiana. After that Sales Tax Department lodged another case no. 193/2010 against me Under section 420, 467, 468, 471, 120-B IPC. The said case was handed over to BIPC Police Station, Basti Jodhewal, Ludhiana and allegations which were put by them are that I have done so many transactions but I do not have any receipt/ bill of the same. After 4 month, I got bail orders from the Hon'ble Punjab & Haryana High Court, Chandigarh and was accordingly released from Jail and the case is still in the court of Ms. Lovejinder Kaur, JMIC, Ludhiana and is fixed for 18.08.2018. I am now Scooter Mechanic. Due to lodging of above said two criminal cases, my reputation and business have affected very badly. I closed the rental shop and started doing property dealing business. Due to monetization, my business is running in loss and due to which I am not able to earn my livelihood. During search, no documents were found in my house and firm. So I request you to kindly waive off the amount of fine imposed on me." (emphasis supplied) 4. A perusal of the record shows that the assessee admittedly was

required to address during the assessment proceedings the deposits

in his bank account. On account of inability to address the facts

ITA-234/CHD/2019 A.Y. 2010-11 Page 5 of 7

with supportive evidences addition of Rs. 16,54,127/- stood made

as a result of estimation of profits @ 5% of the deposits amounting

to Rs. 3,30,82,547/- made in assessee's bank account. A perusal of

the above extracted written submissions before the CIT(A)

demonstrates that the assessee was under a bonafide belief that on

the advancing of arguments of having been framed by some person

named Ishu Sharma, the ld. CIT(A) would have the power to

“waive” the fine imposed”. The assessee appearing in person

admittedly did not comprehend the nature of relief being sought

and failed to comprehend that there was no such power vested by

the Statute in the Authority of the First Appellate Authority and

further that no fine had been imposed. In the interests of

substantial justice, the prayer made in the above extracted Ground

No. 3 is being considered in the present proceedings. Admittedly

the aforesaid circumstances lead to the indelible conclusion that

the Right to Appeal cannot be said to have been exercised by the

assessee in all fairness as the assessee failed to comprehend the

nature of the order and the magnitude of the evidences required. It

also emanates on a reading of the submissions as set out in para 4

of the impugned order that either the written submission of the

assessee were incomplete or that the facts of some other case

ITA-234/CHD/2019 A.Y. 2010-11 Page 6 of 7

appear to have crept in. For ready reference the relevant findings of

the Ld. CIT(A) is extracted hereunder:

The aforesaid written submissions of the appellant as well as his oral averments do not throw any light on the allegation of lack of jurisdiction of the AO in framing the impugned assessment. Refusal to receive the notice sent through Postal Authorities cannot be considered to be non-service of the notice. Besides, the appellant has also challenged the territorial jurisdiction of the AO but has fallen miserably short of justifying the said allegation. No evidence has been adduced regarding the appellant being subjected to assessment proceedings by another AO by the name of Shri Ashok Kumar Gulati, Ward 6 (4), Ludhiana. It is also part of record, which has not even been refuted by the appellant that there was no compliance before the AO who framed the impugned assessment despite several notices and reminders. The appellant cannot, therefore, put up a gripe of not being given an opportunity of being heard. The appellant could not even state whether he had filed any return for the period under consideration and if so, in which jurisdiction. (emphasis supplied) 5. Accordingly, in the interests of substantial justice after

hearing the Ld. CIT DR it is deemed appropriate to restore the issue

back to the file of the Ld. CIT(A), directing the assessee to address

the relevant facts on the basis of which the Ld. CIT(A) can grant

relief if maintainable in law. It is made clear for the benefit of the

tax-payer that the Ld. CIT(A) has no power to “waive” the tax and

there is no fine imposed on the assessee.

stage of the ITAT, the assessee appears to be advised by some

counsels namely S/Shri Aman Bansal, Anjali Bansal, Mavpreet

Singh and Dixit Garg who ideally should have vetted the grounds

raised to which they have also affixed their signatures. Accordingly,

ITA-234/CHD/2019 A.Y. 2010-11 Page 7 of 7

while directing a remand, it is hoped that the opportunity so made

available is not abused and is utilized by the assessee fairly and

properly by making proper compliance. With these observations the

issue is remanded back to the file of the CIT(A) who may carry out

his enquiries if deemed fit qua the claim of being framed by some

Ishu Sharma and pass an order in accordance with law after giving

the assessee a reasonable opportunity of being heard. Said order

was pronounced in the Open Court at the time of hearing itself.

purposes.

Order pronounced in the Open Court on 23 rd August,2019.

Sd/- �दवा �संह, ( DIVA SINGH) �या�यक सद�य / JUDICIAL MEMBER AG/Poonam आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar