MANOJ KUMAR SHARMA,GREATER NOIDA vs. ITO, WARD- 2(2), GAUTAM BUDH NAGAR

This appeal filed by the Assessee is directed against the Order of the Ld. CIT(A)-I, New Delhi pertaining to assessment year 2009-10 on the following grounds:- 1. That the assessee has not given reasonable opportunity

for showing the cause before the AO as the assessee

was ill on the said day. Further no notice has been

Page 1 of 11

received by the Assessee during the entire proceeding of

the case before the AO.

was not given by the Ld. Appellate Authority i.e.

Commissioner of Appeal in the circumstances of the

case. The Ld. Officer have relied only the remand

report by Assessing Officer to safeguard the revenue but

delivery of justice not considered by them as it was

deemed as the claim function of Appellate Authority.

the fact of the case which contains the grounds of

appeal has not been reproduced here again.

authority to urge any further grounds at the time of

hearing.

kindly be entertained for hearing without payment of

disputed demand because the assessee has not been

given reasonable opportunity of heard.

quashed or set aside and sent back to the Assessing Page 2 of 11

Officer for assessment or a reassessment may be done

by the appellate authority or any other relied is

reasonable under any other section if any of the income

tax.

Page 3 of 11

more opportunity, show cause notice u/s. 144 of the Act was issued to the assessee on 3.11.2016 for fixing the case for 21.11.2016 and again on 21.11.2016 no compliance was made. Therefore, AO observed that the source of the cash amounting to Rs. 32,66,200/- deposited in saving bank of the assessee remained unexplained, hence, he treated the same amount as unexplained investment of the assessee within the meaning of section 69 of the Act and added the same to the income of the assessee by completing the assessment at Rs. 32,66,200/- u/s. 144 of the Act read with Section 148 of the Act vide order dated 28.11.2016. Against the said assessment order, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 03.7.2017 has dismissed the appeal of the assessee by upholding the action of the Assessing Officer. Aggrieved with the order of the Ld. CIT(A), assessee is in appeal before the Tribunal. 3. Ld. Counsel for the assessee submitted that AO has not given reasonable opportunity for showing the cause before him as the assessee was ill on the said day. He further submitted that no notice has been received by the Assessee during the entire proceeding of the case before the AO. It was further submitted that reasonable opportunity to hearing of the case was also not given by the Ld. CIT(A). It was further submitted that Ld. CIT(A) has only relied upon the remand report of the Assessing Officer to safeguard the revenue but delivery of justice not considered by him as it was deemed as the main function of Ld. CIT(A). In view of above, he requested to quash or set aside the order of the AO and sent back the issues in dispute to the AO for assessment or a reassessment.

Page 4 of 11

but the fact remained that the appeal was filed late. It is for the assessee to seek condonation of delay on the ground of non-receipt of the impugned assessment order. Considering the totality of the controversy between the assessee and the revenue the delay in filing of appeal was condoned and appeal was admitted by the Ld. CIT(A). In this case the assessee has deposited Rs. 32,66,200/- in his bank account during the assessment year relevant for AY 2009-10 and neither the return of income was filed nor any information was provided either u/s 133(6) of the Act when that was asked by the AO or u/s 147 of the Act and 148 of the Act or u/s 142(1) of I.T. Act, 1961, the said amount was treated as unaccounted income of the assessee and was added to the income of the assessee. The assessee who appeared in person sought to leave the office of the Ld. CIT(A) to lead fresh evidence which was not before the AO and the same was allowed and the evidence brought on record by the assessee was forwarded to the AO for its necessary consideration and report. The AO by his report dated 26.03.2018 submitted his response to the fresh evidence of the assessee and rejected the same and recommended that the grounds raised by the assessee were neither maintainable nor acceptable in the eyes of the law and the appeal of the appellant deserved to be dismissed by this office. A copy of the report of the AO was provided to the assessee for its response and by its letter which is undated the assessee submitted its response to the report of the AO. The assessee raised a ground that the address on which the notices were sent by the AO being "Manoj Kumar Sharma, Nai Abadi, Dadri, G.B. Nagar” was not the correct address as there could be more than one Manoj or Manoj Kumar or

Page 6 of 11

Manoj Kumar Sharma in Dadri and the post office might have ended up serving the notices of the AO to anyone of those persons named Manoj. It was contended by the assessee’s AR that merely because the notices sent by the AO were not returned by the postal authorities it cannot be presumed that those notices stood served upon the appellant and the service of notice was complete in terms of the provisions of law. Based upon such logic, the assessee has contended that there was no service of notice u/s 148 of the Act and therefore, the impugned assessment order was bad in law. I further find that the assessee has stated in its reply to the report of the AO that the assessee came to know about the best judgment assessment in its case only when it received the notice u/s 274 of I.T. Act, 1961 asking it to show cause vide a penalty u/s 271 (1)(c) of I.T. Act, 1961 be not imposed on the assessee. A copy of the said notice was placed on record under self authentication by the assessee. It was further observed that the said notice vide F. No. ITO/W- 2(2)/Noida/271(1)(c)/2017-18 dated 04.05.2017 file F. No./PAN/229/148 was issued on the same address on which the AO has issued earlier notices, i.e., Manoj Kumar Sharma, Nai Abadi, Dadri, G.B. Nagar. Once the postal authorities have duly served the notice issued by the AO upon the assessee on that address as on May, 2017 there can be no ground unless proved otherwise to assume that postal authorities would not have been able to serve the notices issued by the AO upon the assessee on that very address earlier, i.e., prior to the service of notice in May 2017. As none of the notices were returned by the postal authorities as unserved for want of complete or correct address the presumption of bonafide as obtaining

Page 7 of 11

in favour of the State would hold the ground. In any case, the assessee has received the notices sent by the AO on that same address as late as May 2017 and it cannot claim that the address was incorrect or incomplete. Therefore, in view of the admission of the assessee, the claim of the assessee that it did not receive the notices issued by the AO because of the address on which the said notices were sent by the AO was either incomplete or incorrect was not tenable. As the ground taken by the assessee that it did not receive any of the notices as issued by the AO because of the incorrect or incomplete address used by the AO is incorrect and not maintainable in law as the assessee has received notice on the same address as late as May 2017 the only issue that needs to be considered is whether the service of notice by the AO can be held to be complete under the provisions of Section 282 of I.T. Act, 1961 as in that case the assumption of jurisdiction by the AO both u/s 147 as well as u/s 144 of I.T. Act, 1961 was correct. The provisions of Section 282 of I.T. Act, 1961 require that any notice sent to the assessee is to be sent by post or such courier service as approved by the Board or in the manner as provided under the CPC 1908 or in the form of any electronic record as provided in Chapter IV of the I.T. Act, 2000 or by any other means or transmission or documents as provided by the Board. In the instant case, the AO has issued the notice on the address on which the postal authorities were able to locate the assessee and on which the postal authorities have also served upon the assessee the notice issued by the AO. The notices issued by the AO was never returned by the postal authorities for being unserved and which is the standard procedure in case the postal

Page 8 of 11

authorities were unable to either locate the addressee or to serve upon the addressee if the addressee was located the packet handed over to the postal authorities and therefore the inherent presumption under Article 12 of the Constitution regarding the bonafide of the State action would apply as the postal authorities being the instrumentality of the State has no reason not to serve the notices as issued by the AO upon the assessee. Therefore, the service of the notice as issued by the AO was rightly held to be complete. Once the notice u/s 148 of I.T. Act, 1961 is duly served upon the assessee in terms of the provisions of Section 282 of I.T. Act, 1961, the AO was well within the jurisdiction conferred upon him to frame the reassessment under the provisions of Section 147 of I.T. Act, 1961. Once the notice issued by the AO u/s 144 of I.T. Act 1961 was also duly served upon the assessee in terms of the provisions of Section 282 of I.T. Act, 1961. The AO was well within the jurisdiction conferred upon him to frame the reassessment to the best of his judgment. Therefore, in view of the valid service of notice in terms of the provisions of Section 282 of I.T. Act, 1961 the impugned assessment order cannot be faulted with and upholding of this action by the AO is correct one. Hence, I uphold the action of the revenue authorities on the issue of notice and reject the grounds raised by the assessee.

5.1 As regards merit of the case is concerned, I find that AO in his assessment order as well as in its remand report very specifically pointed out that the amount of Rs. 32,66,200/- was deposited by the assessee in its bank account during the previous year 2008-09 while the sale of immovable property which has been claimed by the Page 9 of 11

assessee to be the source of cash deposit took place much earlier on 23.08.2006 which was separated from the period of cash deposit by almost 2½ years. Further, the AO has brought on record that one of the properties sold fetched only Rs. 11,30,000/- of which only 1/6th was the share of the assessee being a co-owner of 1/6th of the said property and therefore, the assessee could have got only Rs. 1,88,330/- out of the said sale of the immovable property. The other transaction of sale of immovable property was by the wife of the assessee Smt. Bhavna Sharma and was for Rs. 6,46,000/- only. Even if it is assumed for the sake of argument but without conceding anything the maximum amount which was available with the assesse and his wife as per the explanation of the appellant was Rs. 8,34,330/- when the cash deposited by the assessee in its bank account was Rs. 32,66,200/-. Further, the receipt of cash from the transactions of sale of property and the deposit of cash in the bank account is separated in time by almost 2½ years. The assessee has brought nothing on record to show that the cash which was received by the appellant and the wife of the appellant remained available with the appellant through the intervening period of 2½ years and was utilized for depositing Rs. 32,66,200/- in its bank account. The assessee has also brought nothing on record to explain the source of remaining amount of cash or Rs. 24,31,870/- which was found by the AO to have been deposited in the bank account of the assessee. In view of the above, the grounds taken by the assessee regarding the source of cash deposited in the bank account of the assessee is neither tenable nor acceptable. Therefore the same was rightly rejected and action of the AO was confirmed by the Ld. CIT(A),

Page 10 of 11

which does not need any interference on my part, hence, I uphold the action of the Ld. CIT(A) of affirming the addition in dispute and accordingly reject the grounds raised by the Assessee.

[H.S. SIDHU] JUDICIAL MEMBER Date:03/10/2019 SRB