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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI DUVVURU RL REDDY & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The Revenue filed this appeal against the order of the Commissioner of Income Tax (Appeals)- 15, Chennai, in dated 30.05.2019 for assessment year 2008-09.
A.M. Satish, the assessee, an individual is a Director of Sea Net Logistics Pvt. Ltd. His regular assessment u/s. 143(3) was completed on 29.12.2010.
Subsequently, the AO re-opened the assessment by issuing the notice u/s. 148 on 31.03.2014 and in the absence of compliance from the assessee, completed the re-assessment u/s. 144 r.w. 147. Aggrieved, the assessee filed an appeal before the CIT(A). The Ld. CIT(A) allowed the appeal. Aggrieved against that order, the Revenue filed this appeal with the following grounds:
“1. The order of the Ld. CIT(A) is contrary to the law and facts of the case.
2. The Ld. CIT(A) erred in holding that the notice issued under section 148 of the Act was not served on the assessee simply on the basis of an affidavit filed by the assessee and without giving any opportunity to the AO to examine the affidavit. 2.1 The Ld. CIT(A) ought to have appreciated that the assessee should have given notice within fifteen days of closure of business to the concerned AO, as per the provisions of section 176(3) of the Act.
3. The Ld. CIT(A) erred in admitting evidence without giving opportunity to the AO under rule 46A of the Rules. 3.1 The Ld. CIT(A) ought to have appreciated that the assessment was completed u/s. 144 r.w.s. 147 of the Act and therefore an opportunity should have been given to examine the evidence submitted for the first time in appeal.
4. For these and other grounds that may be adduced at the time of hearing. It is prayed that the order of the Ld. CIT(A) be set aside and that of the Assessing Officer is restored.”
The case was heard through video conferencing. The Ld. DR submitted that when the assessment was made u/s. 144 r.w.s. 147, the Ld. CIT(A) ought to have given the copies of particulars filed by the assessee during the appeal to the AO and the AO should have been given an opportunity to examine such materials and thereafter, the Ld. CIT(A) ought to have disposed the appeal.
Since, the Ld. CIT(A) did not given an opportunity to the Assessing Officer, the order passed by him is not in accordance with law and thus he presented the case on the lines of the grounds of appeal extracted, supra, and pleaded to set aside the order of the Ld. CIT(A) and restore the order of the AO. Per contra, the Ld. AR submitted that the regular assessment was completed u/s. 143(3).
The AO issued notice u/s. 148 after a period of 4 years, the Ld. CIT(A) examined the case and found that the AO did not have proof of service of notice.
Therefore, the Ld. CIT(A) held that the re-assessment made is void ab initio.
Further, he examined the issue on the basis of merits and then allowed the appeal. Therefore, he relied on the order of the Ld. CIT(A). The Ld. DR further submitted that though the Ld. CIT(A) required the AO to give his comments on the service of notice, on which the officer expressed that it is not readily available, the Ld. CIT(A) has not given due opportunity to the AO both on Jurisdictional issue as well as on the merit issue. The assessee claimed to have closed the business but he has not complied with the provisions of section 176 of the Act. Therefore, he reiterated his submissions.
We heard the rival submissions and gone through the relevant material.
The AO re-opened the assessment and in the absence of compliance completed the re-assessment u/s. 144 r.w.
Aggrieved, the assessee filed an appeal before the CIT(A), before whom the assessee filed the written submissions with an affidavit. The Ld. CIT(A) required the Assessing Officer to furnish proof of service of notice u/s.
The Ld AO submitted that the notice u/s. 148 has been issued by the then Assessing Officer on 31.03.2014. It has been despatched on the same day through despatch section. Though, the acknowledgement for servicing of notice is not available in the MR, there is no indication in the MR for return of notice. The despatch register is not readily available in the despatch section, as the notice under question had been despatched more than 5 years ago. The Ld. CIT(A) held that there is no proof of service of notice, therefore the re-assessment made is void ab initio and disposed the appeal on merit also. The Ld. DR submitted that the AO has not been given proper opportunity and pleads that when the re-assessment is made u/s. 144 r.w. 147, the copies of affidavit and other material filed by the assessee should have been given to the Assessing Officer for due examination and his comments ought to have been considered by the Ld. CIT(A). In this case, on the issue of merits, the AO was not at all given any opportunity. Considering, the entire facts and circumstances, we are of the view that the issues are required to be remitted back to the AO for a fresh examination. The assessee is at full liberty to canvas his case both on the issues of Jurisdiction as well as on merits and all the issues raised by the assessee are open before the AO for due examination and decision.
The AO shall examine all the issues canvassed by the assessee and after affording due opportunity to the assessee shall decide them by a speaking order.
In the result, the Revenue’s appeal is treated as partly allowed for statistical purposes.
Order pronounced on 1st February, 2021 at Chennai.