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Income Tax Appellate Tribunal, DELHI ‘F’ BENCH,
Before: SHRI T.S. KAPOOR, & SHRI SUDHANSHU SRIVASTAVA,
PER T.S. KAPOOR, ACCOUNTANT MEMBER
This appeal has been filed by the assessee against the order of the Ld. CIT(A)-16, New Delhi, dated 18/12/2018, for Assessment Year 2014-15. The assessee has taken a number of grounds both on legal issues and on merits of the case. However, during the course of proceedings before us, only ground No.1, which is on legal issue of non-service of notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter ‘the Act’) was argued which for the sake of completeness is reproduced below.
“That no notice u/s 143(2), of the Income Tax Act, 1961, issued by the Assessing Officer having jurisdiction over the assessee, was served upon the assessee on or before the time limit stipulated in the proviso to section 143(2) of the Act and, therefore, the assessment order is illegal, unjustified and void ab initio. 2. The Ld. AR at the outset, submitted that assessee in this case has been assessed by the Assessing Officer, Circle-47(1), New Delhi who is the Assessing Officer of the assessee and who has not issued and served the statutory notice u/s 143(2) of the Act. The Ld. AR submitted that during the course of assessment proceedings itself, the assessee had objected to the assessment proceedings being without statutory notice u/s 143(2) and had filed affidavit before the Assessing Officer claiming therein that no notice u/s 143(2) was served and in this respect our attention was invited to page 3 of the assessment order where the Assessing Officer himself has reproduced the affidavit filed by the assessee. It was submitted that the Assessing Officer claimed that notice u/s 143(2) was duly issued and was served upon the assessee and he has scanned the receipt of the speed post along with tracking history of the envelope containing notice and has reproduced the same in the assessment order itself. The Ld. AR submitted that the address mentioned in the notice is B-37, Maharana Pratap Enclave, Pitampura Delhi-110034, which means that the said notice was to be dispatched at the above noted address.
In this respect, the Ld. AR took us to page 253, where a copy of said notice was placed. The Ld. AR then took us to paper book page 254 where the tracking report of India Post was placed and in which the destination Pin Code 110006, was mentioned. The Ld. AR submitted that instead of sending the notice at Pin Code-110034 to the assessee, the Assessing Officer had sent the notice at some Delhi address with Pin Code-110006, therefore there is discrepancy in the address noted in the notice u/s 143(2) of the Act and address on which delivery is made. Further, it was argued that the name of the assessee is Rajeev Goel and not Ranjeev Goel as bearing in the postal receipt and therefore in such circumstances, it cannot be presumed that the Ld. Assessing Officer had discharged its onus.
It was submitted that the case of the assessee is squarely covered by the order of the Delhi ITAT in the case of M/s. Micro Space matrix Solution Pvt. Ltd., vs ITO in wherein, it has been held that if there are discrepancies in the address stated in the notice, envelope containing notice and the address noted by the Post Officer, then there cannot be any presumption as to the valid service of notice.
The Ld. AR further placed his reliance on judgments of Hon’ble Delhi High Court in the case of CIT vs Lunar Diamonds Ltd. (ITA No.62 of 2005), wherein, the Hon’ble High Court under similar facts and circumstances had dismissed the appeal of the Revenue. It was submitted that in that case also, the assessee had filed affidavit regarding non-receipt of notice u/s 143(2) and there was difference in the address on the receipt issued by post office and therefore, the Hon’ble Tribunal had allowed the appeal of the assessee which the Hon’ble High Court had upheld. The Ld. AR also relied upon a number of case laws as listed in the brief synopsis filed by him. The Ld. AR further submitted that the in view of the above facts and circumstances, the assessee was not served noticed u/s 143(2) of the Act and therefore, any assessment order passed without service of notice u/s 143(2) is null and void as held by the Hon’ble Supreme Court in the case of ACIT vs Hotel Blue Moon (2010) 321 ITR 362 (SC). It was submitted that in that case, the Hon’ble Supreme Court has clearly held that in absence of service of notice u/s 143(2) of the Act, the assessment becomes null and void. It was submitted that Hon’ble Supreme Court even dealt with the provisions of section 292BB and has held that even section 292BB cannot cure the defect of not serving of notice u/s 143(2) of the Act. It was submitted that in the present case, the assessee before the Assessing Officer itself had objected to the assessment proceedings, because of non-service of notice and therefore, section 292BB is also not applicable to the assessee.
Without prejudice, it was argued that the notice issued by the Assessing Officer of Ward 34(1) u/s 143(2) was not issued by the jurisdictional Assessing Officer. It was submitted that official address of assessee is 1705, 3rd Floor, Onkar Bhawan, Bhagirath Place, Delhi- 110006 and jurisdiction of which lies with Circle 47(1), New Delhi and the jurisdiction at the time of issuance of notice also lied with such Circle 47(1) and our attention was invited to copy of jurisdiction chart extracted from the website of Income Tax Department placed at paper book page no. 301 to 327. It was submitted that the Assessing Officer of Circle 34(1) does not hold jurisdiction even over the residential address of the assessee for which the Assessing Officer of Circle 39(1) holds the jurisdiction and therefore it was argued that the notice issued by non-jurisdictional Assessing Officer is liable to be quashed.
Regarding the contention of the Ld. CIT(A) that assessee should have raised the issue within one month of notice, it was submitted that the assessee could not have known that the notice has been issued by a non-jurisdictional Assessing Officer as the notice itself was not served and thus could not have filed the objection in this regard. It was submitted that the notice u/s 142(1) was duly issued by Circle 47(1) only and accordingly no objection was filed and further the order was passed by the Assessing Officer Circle 47(1) and thus no objection was filed. It was submitted that the aforesaid fact came to light of assessee after receiving the remand report and immediately thereafter objection was raised vide rejoinder to the remand report.
Thus, there is no breach of section 124(3) of the Act. As regards the case laws relied upon by the Ld. CIT(A), it was submitted that the these are distinguishable on facts as in the case of Mega Corporation Ltd. in and CIT vs Kapil Jain in ITA No.613 of 2009 and Abhishek Jain vs ITO 94 taxmann.com 355 (Del.) notice had been served upon the assessee and assessee had failed to raise the objections within the stipulated period prescribed u/s 124(3) of the Act, whereas, in the present case no notice was served upon the assessee as already demonstrated.
The Ld. AR, further, argued that no order u/s 127 for transfer of case from one Assessing Officer to another Assessing Officer was passed, whereas the Commissioner of both the Assessing Officer are different. It was submitted that such order has to be passed by Chief Commissioner or Commissioner from whose jurisdiction, the case is to be transferred. It was submitted that Circle-34 and Circle 47 are under the jurisdiction of different CCITs, therefore, the order u/s 127 was mandatory. The Ld. AR further argued that the Chief Commissioner of Circle 34 also did not pass any order u/s 127 to transfer the case back to the Circle 34 and therefore there is violation of the provisions of section 127 of the Act and therefore, the order passed by the Assessing Officer, Circle 47(1) is not valid and liable to be quashed. In this respect, reliance was placed on the following cases:-
i. Shri Harvinder Singh Jaggi vs ACIT in ii. KIE Infrastructures & Projects (P.) Ltd. vs ITO in IT Appeal No.23(Del) of 2012. iii. Cabbana Infrastructure Pvt. Ltd. vs DCIT (ITA No.183 and 526/Asr./2017). iv. Tata Sons Ltd. vs ACIT (ITA No.4497 and 4542/Mum/2005) (Mum. Trib.) 8. The Ld. DR on the other hand, vehemently argued that the arguments raised by the Ld. AR are baseless and are aimed at depriving the Revenue of its legitimate share. The Ld. DR filed a copy of letter written by the Assessing Officer, Circle 47(1) and also stated that complete assessment record was available with him. The Ld. DR filed a print out of PAN directory showing the address of the assessee and submitted that while filing PAN application, the assessee duly mentioned its address as B-37, Maharana Pratap Enclave, Pitampura Delhi-110034 and therefore as per the PAN records, notice u/s 143(2) was generated by the Assessing Officer where the PAN of the assessee lied which in the present case was Assessing Officer Circle-34(1).
Inviting our attention to the copy of notice, the Ld. AR submitted that the same was generated by the same Assessing Officer where the PAN of the assessee was laying and the assessee filed returns of income stating therein different address and in this respect, invited our attention to paper book page 5 where a copy of return along with address mentioned on it was placed. The Ld. DR stated that assessee did not inform the Assessing Officer for change of address and therefore raising of such plea of notice by a different Assessing Officer does not hold good. The Ld. DR placed his reliance on a decision of Hon’ble Bombay High Court in the case of Sky Light Hospitality LLP (2018) 405 ITR 296 wherein, the Hon’ble Court had held that where the name and even the PAN number mentioned were incorrect, human errors and mistakes cannot and should not nullify proceedings which are otherwise valid and where no prejudice had been caused. The ld. DR further placed his reliance on order of the Hon’ble Delhi High Court in the case of Abhishek Jain vs ITO (2018)
405 ITR 1, where the Hon’ble High Court has held that sub-section-3 of section 124 clearly states that no person can call in question jurisdiction of an Assessing Officer in case of non-compliance and/or after the stipulated in clause (a) and (b), and therefore, it was argued that at this stage, the arguments of the assessee cannot be accepted and it was therefore argued that the Ld. CIT(A) has rightly dismissed this grounds of appeal.
The Ld. AR in this rejoinder submitted that the assessee is not under any obligation to inform the Assessing Officer regarding change of address and in this respect relied upon the judgment of Hon’ble Delhi High Court in the case of Pr. CIT vs Atlanta Capital Pvt. Ltd. and filed a copy of the decision. The Ld. AR submitted that the arguments of the ld. DR that notice u/s 143(2) is generated by the Assessing Officer where the PAN number lies also goes in favour of the assessee as the Assessing Officer while issuing notice u/s 143(2) has not applied his mind whereas the section itself requires that the Assessing Officer should have been satisfied before issuing of notice u/s 143(2) and if the Assessing Officer issued notice u/s 143(2) without taking into account the return filed by the assessee, such notice itself is also bad in law.
We have heard rival parties and have gone through the material placed on record. We find that it is correct that the assessee obtained his PAN number by stating residential address as B-37, Maharana Pratap Enclave, Pitampura Delhi-110034. Print out of PAN directory showing the address and PAN number of the assessee is placed in page-4 of paper book filed by Revenue. Further, it is also correct that the assessee filed his return of income by stating therein address as 1705, 3rd Floor, Onkar Bhawan, Bhagirath Place, Delhi-110006, therefore, it is an undisputed fact that there is difference between the address mentioned in PAN data base as well as in the return of income filed by assessee. As per jurisdiction chart of Income Tax Department in Delhi, extracted from the website of Income Tax Department, placed at page book page 301 to 327, the jurisdiction of assessee as per his address in PAN application is with Assessing Officer Ward 39(1). The jurisdiction of the Assessing Officer, as per the address mentioned in the return of income is with Assessing Officer Circle No.47(1) who has passed the assessment order. The notice issued u/s 143(2) has been issued by the Assessing Officer Circle 34(1) who is neither the Assessing Officer of assessee on the basis of address in PAN application nor is the Assessing Officer of assessee as per address mentioned in the returns of income.
The jurisdiction chart placed in paper book page 308 reflects the area covered under Circle 34(1) which includes Sarai Pepal Thala, Shalimar Bagh(south), Ashok Vihar, Wazir Pur, Sawan Park, Nimri Colony, Malka Ganj. At none of the places mentioned above, the assessee resides or does his business. Therefore, the notice issued by the Assessing Officer of Circle 34(1) is held to be illegal as the Assessing Officer of Circle 34(1) had no jurisdiction on the assessee either on the basis of his residential address or on the basis of his business address. The Ld. DR also could not produce any order passed u/s 127 of the Act either by the Commissioner of Circle 34(1) or Commissioner of Circle 47(1) of the Act. As regards, the contention raised by the Ld. DR that the assessee should have approached the Assessing Officer for change of address also does not hold good in view of the decision of the Hon’ble Delhi High Court in the case of Pr.
CIT vs Atlanta Capital Pvt. Ltd., where, the Hon’ble Court has held as under:-
“7. On the facts of the present case, it is seen that notice dated 27th March 2008 under Section 148 of the Act was issued to the Assessee by the Assessing Officer ('AO') at the address at B-231, Okhla Industrial Area, Phase-I, New Delhi. Admittedly, the Assessee had shifted from that address with effect from 1st February 2005 to a new address at B-115, Sarvodaya Enclave, New Delhi. For AY 2005-06 and the subsequent AYs, the Assessee disclosed his address as B-115, Sarvodaya Enclave, New Delhi. Even the AO had sent letters to the Assessee at the same address on 8 th August 2007. The intimation under Section 143(1) of the Act dated 25 th January 2008 for AY 2006-07 was also sent by the AO to the Assessee at the same changed address i.e. B-115, Sarvodaya Enclave, New Delhi. There is nothing to show that the notice under Section 148 of the Act was in fact issued by the AO showing the aforementioned changed address.
It is the contention of Mr. N.P. Sahni, learned Senior Standing counsel for the Revenue, that the notice satisfied the requirement as to limitation under Section 149 (b) of the Act. However, as noted by the ITAT, the notice itself was not issued at the correct address. The fact that the said notice, sent by speed post, was not returned unserved, would be to no avail since the address given in the notice was not the last known address of the Assessee.
9. Mr. Sahni then submitted that it was incumbent on the Assessee to have got his changed address entered in the PAN Data Base failing which the AO would only go by the address given in the record of the relevant AY which in the case is AY 2001-02.
10. The Court is unable to agree with this submission. No provision in the Act has been shown to the Court which obliges the Assessee to ensure that his changed address is entered in the PAN Data Base failing which he is precluded from insisting on the notice under Section 148 being issued to him at the known address and being served upon him. In the present case, on facts, it is not in dispute that the AO was aware of the change of address of the Assessee and yet the notice under Section 148 of the Act was issued at the older address.
11. Mr. Sahni submitted that the order of the CIT (A) notes the fact that a photocopy of the notice was given to the Assessee during the re- assessment proceedings and that by itself should constitute sufficient service of notice on the Assessee. In light of the law explained by the Supreme Court in R.K. Upadhyaya v. Shanbhai P. Patel (1987) 3 SCC 96 which has in turn been followed by this Court in Chetan Gupta (supra), the requirement of both the issuance and the service of such upon the Assessee for the purposes of Section 147 and 148 of the Act are mandatory 'jurisdictional requirements'. The mere fact that an Assessee participated in the re-assessment proceedings despite not having been issued or served with the notice under Section 148 of the Act in accordance with law will not constitute a waiver of the said jurisdictional requirement.
On facts, therefore, the Court finds no legal error committed by the ITAT in holding that there was no proper service of notice on the Assessee under Section 148 of the Act.” 12. Even otherwise, we have observed that the Assessing Officer of Circle 34(1) did not have jurisdiction over the assessee neither on the basis of residential address nor on the basis of business address.
Therefore, the notice issued by Assessing Officer of Circle-34(1) cannot be said to be legal as it has been issued by a non jurisdictional Assessing Officer and that too without any order u/s 127 of the Act. The Hon’ble Delhi ITAT in the case of KIE Infrastructures & Projects (P.) Ltd. vs ITO in IT Appeal No.23(Del) of 2012 has held as under:-
“Where in case of assessee, Assessing Officer at ward 4 Agra himself transferred jurisdiction of case to Assessing Officer at ward 5(3), New Delhi and there being no transfer order passed by Chief Commissioner or Commissioner, it was a case of violation of provisions of section 127 and, therefore, impugned assessment order passed by Assessing Officer, ward 5(3), New Delhi was to be regarded as void ab intio.”
Similarly, Lucknow Bench of the Tribunal in the case of M/s Bajrang Bali Industries vs ACIT in order dated 30/11/2018 has held as under:-
“6. In the present case, the return of income was furnished on 30.09.2013. The financial year in which the return was filed expired on 31.03.2014 and therefore, last date for issue of notice was 30.09.2014. The statutory period for issuance of notice u/s 143(2) expired on 30.09.2014 and by 30.09.2014 the notice u/s 143(2), which was within the prescribed period of time, was issued only by DCIT-IV, Kanpur who had no jurisdiction over the case, as the DCIT-IV himself had transferred the case to DCIT-2, Kanpur vide memo dated 20.08.2015, a copy of which is placed at paper book Page 3. Therefore from the above facts and circumstances, it become apparent that the first Assessing Officer who issued notice on 30.09.2014 had no jurisdiction to assess the assessee and, therefore, he transferred the case to DCIT-2, Kanpur who though had jurisdiction to assess the assessee but issued notice u/s 143(2) only on 07.09.2015 by which date period for issuance of notice had expired. We further find that no order u/s 127 of the Act was passed by the Assessing Officer to transfer the case from Kanpur-4 to Kanpur-2. The Assessing Officer who had jurisdiction to assess the assessee issued notice u/s 143(2) only on 07.09.2015 which was beyond the prescribed time limit for issuance of such notice. Therefore, the notice issued u/s 143(2) by DCIT, Kanpur-2 beyond the statutory period of time is without jurisdiction and therefore, any order passed in consequence of such notice is also liable to be quashed. Therefore, we are in agreement with the argument of Ld. AR. Accordingly, additional grounds of appeal 5 to 8 are allowed. Since we have decided the legal issues, in favour of assessee the grounds on merits of the case have become infructuous and have not been adjudicated.” In view of the above facts and circumstances & judicial precedents the arguments of the Ld. AR is accepted & notice issued by Assessing Officer of Circle-34(1) is held to be void-ab-intio.
Moreover, if for a moment, we presume that the notice issued by Circle 34(1) Assessing Officer was valid then its service was not proper as the address mentioned on the notice placed in paper book page 253 is B-37, Maharana Pratap Enclave, Pitampura Delhi- 110034, whereas as per India Post tracking report, the notice has been delivered at Delhi address to one Ranjeev Goel with Pin Code 110006. There is difference between the address mentioned in the notice which is Pin Code 110034 and tracking report which is 110006 and also there is difference in the name mentioned in the notice which is Rajeev Goel and that mentioned in the tracking report which is Ranjeev Goel. The copy of tracking report is placed at paper book page 254. Therefore, in view of these facts, the notice, even if presumed to be by jurisdictional Assessing Officer has not been served properly. The Hon’ble Delhi High Court in the case of CIT vs Lunar Diamonds Ltd. (281 ITR 1) has dealt with similar situation. The facts of the case and its decision is reproduced below:-
“. On appeal before the CIT(A), it was contended by the assessee that it had not received under section 143(2) of the Income Tax Act, 1961 allegedly sent by registered post. An affidavit to this effect was filed. It was contended that the receipt issued by the post office did not bear the address of the assessee but only its name. It was, therefore, submitted that there was a possibility that the correct address of the assessee might not have been written on the envelope and, therefore, the question of service of notice on the assessee did not arise. The contention of the assessee was accepted by the Commissioner (Appeals) and it was held that there was no valid service of notice on the assessee and, therefore, the assessment framed was invalid. On appeal to the High Court, held dismissing the appeal filed by the revenue: "We may also point out that there appears to be some doubt whether the notice was at all sent to the assessee because, as observed by the Commissioner of Income-tax (Appeals), the receipt showing that an envelope was sent by registered post merely contained the name of the assessee without its address. Consequently, it is quite possible that the notice may have been sent to the assessee at some wrong or even some incomplete address. However, it is not necessary for us to go into this question at all because the assessee had filed an affidavit stating that it had not received the notice and the Tribunal rightly held that under these circumstances, the burden was upon the appellant to prove that notice was served upon the assessee within the prescribed time. The appellant had failed to prove its case in this regard."
The above case squarely applies to the facts of the instant case. In the instant case also, there is no reason to believe that the notice was sent to the assessee because the postal receipt showingthat an envelope was sent by speed post merely contained the name of the assessee without its address. Consequently, it is quite possible that the notice may have been sent to the assessee at some wrong or even some incomplete address. The assessee has filed an affidavit stating that he had not received the notice. Hence, applying the ratio, the notice u/s 143(2) is void.
Therefore, on this ground also the assessee succeeds as in this case also the service of notice was not proper. 15. In view of the above facts and circumstances, the legal ground taken by the assessee is allowed. Nothing was argued on the merits of the case and therefore, merits of the case has not been adjudicated. 16. In the result, appeal is allowed. Order pronounced in the open court on 26/09/2019.