Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: SH. R. K. PANDA
Date of hearing: 14/08/2019 Date of Pronouncement: 14/10/2019 ORDER PER R.K PANDA, AM:
This appeal filed by the assessee is directed against the exparte order dated 27.02.2018 of the CIT(A)-2, New Delhi relating to A. Y. 2009-10.
There was delay of 32 days in filing of this appeal by the assessee for which the assessee has filed a condnonation petition alongwith an affidavit explaining the reasons for such delay. After considering the contents of the condonation petition filed alongwith the affidavit of the assessee and considering the fact that the assessee is a widow of 78 years old and resides in a village and being an illiterate lady who puts her thumb impression, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.
Facts of the case, in brief, are that on the basis of AIR information received that the assessee has invested Rs.40,65,000/- for purchasing an immovable property at village Kalanjari, Pargana- Meerut, the case of the assessee was reopened after recording reasons. Notice u/s.148 of the IT Act dated 17.03.2016 was sent to the address of the assessee through speed post which was received back undelivered. Therefore, a copy of the notice was served by ITI through affixture. The Assessing Officer thereafter issued notice u/s. 142 (1) of the IT Act 1961 dated 17.10.2016 through speed post for compliance 26.10.2016. Since there was non attendance from the side of the assessee another show cause notice u/s. 144 of the IT Act dated 26.10.2016 was issued by the AO through speed post for compliance on 04.11.2016. Since there was again non compliance from the side of the assessee the AO completed the assessment u/s. 144 of the IT Act determining the total income of the assessee at Rs.40,43,000/-.
Before CIT(A) the assessee apart from challenging the addition on merit challenged the validity of the reassessment proceedings. However, the assessee was unsuccessful and the CIT(A) appeal sustained the addition made by the AO and also upheld the validity of the reassessment proceedings.
Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :-
1. That on the facts and in the circumstances of the petitioner’s case, the learned Assessing Officer erred in law and on facts in wrongly assuming jurisdiction under section 148 of the Income tax Act, 1961 in the case of the petitioner and without there being any application of mind or having sufficient reasons to believe that any income chargeable to tax has escaped assessment. Thus the action of framing the assessment for the relevant assessment year in appeal is based on suspicion, surmises and conjectures. That on the facts and in the circumstances of the petitioner’s case, the 2. learned Assessing Officer erred in law and on facts in framing the assessment under section 144/147 of the Income tax Act, 1961 on 31-10- 2016 whereas the date fixed for hearing was on 04-11-2016, as such the action of the learned assessing in making the assessment order under section 144/147 of the Act is not only illegal and bad in law but such order is also nullity in law which needs to be quashed forthwith.
3. That on the facts and in the circumstances of the petitioner’s case, the learned Assessing Officer erred in law and on facts in failing to issue the notice under section 148 of the Act to the petitioner and further effecting its service on the petitioner within the limitation period on 31st March, 2016.
4. Without prejudice the Learned Assessing Officer has miserably failed to follow the mandated procedure to affect the service of notice under section 148 through affixture, thus defying the legal compliance as contemplated in law leading to framing the assessment under section 144/147 of the Act also bad in law. 5. That on the facts and in the circumstances of the petitioner’s case, the learned Assessing Officer erred in law and on facts in making the additions of Rs.4340000 being investment made by the petitioner for purchase of immovable property, without considering the material evidence placed on record and framing the ex parte assessment on the basis of suspicion and without bringing on record any material evidence whatsoever in support of his action.
6. That on the facts and in the circumstances of the petitioner’s case, the learned Assessing officer erred in law and on facts in charging interest under section 234A and 234b amounted to Rs.1336849. 6. The Ld. Counsel for the assessee strongly challenged the order of the CIT(A) sustaining the addition as well as upholding the validity of reassessment proceedings. The Ld. Counsel for the assessee referring to the page 17 of the paper book drew the attention of the bench to the notice u/s. 148 of the IT Act which was affixed at the address of the assessee on 06.06.2016 whereas the time period for issue of notice within a period of six years lapsed on 31.03.2016. Referring to page 119 of the paper book he drew the attention of the bench to the address of the assessee as per the sale deed which is the address in the letter issued u/s. 148 of the IT Act. Referring to page 4 of the paper book the Ld. Counsel for the assessee submitted that before CIT(A) the assessee had categorically stated that the notice issued u/s. 148 by the AO dated 17.03.2016 was returned back by the postal authorities undelivered due to wrong address. The AO has stated that the notice was served on the assessee through affixture. However, on inspection of the file no such record was found of such service of notice other than the report on the copy of notice itself by the ITI. The date of affixture as per the report is 06.06.2016 which is way beyond the due date by which notice must have been served on the assessee i.e. 31.03.2016. It was accordingly argued before the CIT(A) that the service of notice by affixture is merely an eye wash. Further the assessee is a well known lady in the small village where she is living since long and the Inspector has not approached any person nor there is any Page | 4 witness of such alleged affixture. He accordingly submitted that the service through affixture as alleged is sham and an eye wash. Referring to the copy of the assessment order he submitted that the AO has issued the show cause notice u/s.144 dated 26.10.2016 for compliance on 04.11.2016. However, the AO has passed the order on 31.10.2016 i.e. before the date of compliance as per the notice, therefore, on this ground also the assessment order is illegal.
7. So far as the merit of the case is concerned the Ld. Counsel for the assessee submitted that the assessee explained the source before the CIT(A) through additional evidences which were forwarded by him to the AO for remand report according to which the assessee has obtained an amount of Rs.35 lacs as gift from her son Sh. Sharvan Kumar and an amount of Rs. 8 lacs was out of her own savings. He accordingly submitted that both legally and factually the CIT(A) was not justified in sustaining the addition and upholding the validity of reassessment proceedings.
The Ld. DR on the other hand heavily relied on the order of the AO and the CIT(A).
I have considered the rival arguments made by both the sides and perused the orders of the authorities below. I have also gone through the paper book filed on behalf of the assessee. I find the AO in the instant case issued notice u/s.148 dated 17.03.2016 through speed post which was returned back undelivered by the postal authorities. Thereafter as per the AO the same was served by ITI through affixture. A perusal of the copy of the report of the Inspector placed at page 17 of the paper Page | 5 book shows that the Inspector has given his report to the AO on 06.06.2016 wherein he has mentioned that the notice was affixed on the address of the assessee on 06.06.2016. However, the period of six years for issue of notice u/s. 148 in the instant case expires on 31.03.2016. Therefore, the notice has not been properly served on the assessee before the due date. Further a perusal of the assessment order shows that the order has been passed on 03.10.2016 which the AO has mentioned in the body of the order. The Ld. CIT(A) has also at para-1 of the order has mentioned as under : ‘This appeal has been preferred against the order dated 31.10.2016 passed under section 144/147 of the IT Act, 1961 (hereinafter referred to as the Act) by the Income Tax Officer, Ward 1 (2), Ghaziabad for the Assessment Year 2009-10.’ 10. I find the AO at para -3 of the assessment order has mentioned as under : “3. In response to above issued notices, neither any one attended or any reply was received in the office of the undersigned. Finally, a show-cause notice u/s. 144 of the IT Act, 1961 dated 26.10.2016 was issued by the undersigned through Speed Post {EU200347762IN} for compliance on 04.11.2016. In response to this notice, the assessee again failed to file any return of income for A.Y.(2009-10) and further made non compliance of this notice. Thus, the assessee had chosen to make no compliance and continued to exhibit non cooperative attitude towards the assessment proceedings.”
From the above it is seen that the date given for compliance was on 04.11.2016 whereas the AO has passed the order on Page | 6 31.10.2016. From the above it is crystal clear that just to cover up the limitation the AO has served a notice through affixture after the specified date and has also passed the assessment order before the due date of compliance given by him. Viewed from either angle the order passed by the AO is illegal and nonest. I, therefore, set aside the order of the CIT(A) and allow the grounds raised
by the assessee on the issue of validity of the reassessment proceedings. Since the assessee succeeds on the legal ground raised by her, the ground on merit is not being adjudicated being academic in nature.
12. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 14.10.2019.