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Income Tax Appellate Tribunal, DELHI BENCH “G”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI B.R.R. KUMAR
case, hence, following the above order of the earlier Ld. CIT(A) of the assessment year 2007-08 in the case of M/s Samag Construction Ltd., a company of Saamag Group, Ld. CIT(A) has rightly deleted the addition of 21 Rs. 2,04,01,195/- made by the AO u/s. 2(22)(e) of the I.T. Act, 1961 in the case of the assessee, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issues in dispute and reject the ground raised by the Revenue. The case laws cited by the Ld. CIT(A) in his findings, as aforesaid, are directly applicable in the case of the assessee. However, the case laws cited by the Ld. CIT(DR) are distinguished on facts.
10.4 As regards ground no. 3 involved in Appeal No. 2603/Del/14 relating to deletion of addition of Rs. 40,23,220/- on account of cash payment for purchase of land is concerned, we note that the addition in dispute was made on the basis of the observations of the Auditor made in his Report u/s. 142(2A), which were based on the document seized during the course of search proceedings. We further note that the AO observed that the reply of the assessee has been considered, which, for the same reasons as given for making the addition of Rs. 26,40,000/- u/s. 69C, was not found to be acceptable and, therefore, the impugned addition of Rs. 40,23,220/- was made u/s. 69C. Since we have already confirmed the findings of the Ld. CIT(A) of deleting the addition of Rs. 26,40,000/- vide para no. 10.2 of this order, hence, the addition in dispute is not tenable, because the same was made on surmises and conjectures on the basis of a document seized during the course of search which was nothing but was a dumb paper on which rough notings have been recorded which is normal in the real estate business. However, the amounts mentioned on the seized document was unexplained expenditure 22 without analyzing and verifying the contents thereof was not justified, hence, the addition made by the AO was rightly deleted by the Ld. CIT(A), which does not need any interference on our part, therefore, we uphold the action of the Ld. CIT(A) on the issue in dispute and accordingly, reject the ground raised by the Revenue.
In the result, the Appeal No. 2599/DEL/14 (AY 2006-07), 2600/DEL/14 (AY 2007-08) & 2603/DEL/14 (AY 2007-08) of the Revenue stand dismissed.
ITA NO. 4058/DEL/2015 (AY 2011-12)
The brief facts of the case are that the assessee company is engaged in the business of real estate development i.e. acquisition of land, development thereof, construction of residential apartments, commercial complexes etc. The assessee filed its return of income on 30.9.2011 declaring a loss of RS. 8,11,002, which was processed u/s. 143(1) of the Income Tax Act, 1961 (in short “Act”). The case of the assessee was taken up for scrutiny and statutory notices u/s. 143(2) and 142(1) were issued. In response to the same, the AR of the assessee attended the assessment proceedings and furnished necessary details, information and documents as called for by the AO from time to time.
Thereupon, the assessment in this case was completed in terms of an order u/s. 143(3) dated 03.3.3014 at a total income of Rs. 1,68,80,020/-, as against the returned loss of Rs. 8,11,002/- wherein the AO made an addition of Rs. 1,76,91,022/- in the income of the assessee u/s. 2(22)(e) of the I.T. Act, 1961 on protective basis. Aggrieved by the assessment order dated 03.03.2014, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 09.03.2015 has allowed the appeal of the Assessee. Against the impugned order dated 09.3.2015, the Revenue is in appeal before us.
Ld. CIT(DR) relied upon the order of the Assessing Officer and stated that Ld. CIT(A) has erred in law as well as on facts in holding that the notice u/s. 142(1) of the Act was not served upon the assessee within the prescribed time limit. He submitted that the assessee vide letter dated 30.7.2013 and 11.11.2013 submitted that the notice u/s. 143(2) of the Act was not received by the company within the time specified in the Income Tax Act for service of notice. In this regard, it was informed to the assessee that the notice u/s. 143(2) of the Act in this case for the assessment year 2011-12 was issued on 25.9.2012 i.e. within six months from the end of financial year in which return was furnished and duly dispatched and served upon the assessee through speed post.
On the other hand, Ld. Counsel for the assessee relied upon the order of the ld. CIT(A) and stated that he has passed a well reasoned order, which does not need any interference on our part.
We have heard both the parties and perused the records especially the orders of the revenue authorities. We find that as pr the provisions of section 143(2) of the Act, statutory notice u/s. 143(2) of the Act is required to be served on the assessee within 6 months from the end of the financial year in which the return for the assessment year under consideration was furnished and it is not only required to be issued within 6 months from the end of the financial year in which the return for the assessment year in dispute was furnished. it mean that the onus to prove the service of notice within the statutory period was on the AO and not upon the assessee. In the instant case on considering the facts of the case, the AO failed to discharge the onus of proving the service of notice upon the assessee u/s. 143(2) of the Act within the statutory period of limitation. We note that in the case of the assessee a speed post booking list is lying in the assessment record indicating the issuance of notice to the assessee but there was no evidence on record to show that either the same was received back by the AO or the same was served upon the assessee on or after the prescribed time limit. Thus, in this case, the notice u/s. 143(2) of the Act was not proved to have been served upon the assessee on or before 30.9.2012. Therefore, Ld. CIT(A) by following the various case laws relied upon by the assessee including the decision of the Hon’ble Supreme Court of India in the case of Y. Narayana Chetty vs. ITO reported in 31 ITR 388 (SC) has held that a notice prescribed in section 143(2) of the Act is not merely a procedural requirement. Such notice will have to be served on the assessee within the state date. If no notice is issued or if notice is issued but not served on the assessee within the state time, then the validity of the proceedings taken by the AO would be illegal and void, has rightly held that since there was no service of notice u/s. 143(2) of the Act within statutory time limit in this case, the proceedings initiated thereafter were null and void as it was assumption of jurisdiction without following the procedures laid in the Act and accordingly, quashed the assessment order passed by the Assessing Officer in this case as null and void, which does not need any interference on our part, therefore, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the grounds raised by the Revenue. In the result, the Revenue’s appeal stand dismissed.
In the result, all the 04 Appeals i.e. (AY 2006-07) (DCIT VS. SAAMAG CONSTRUCTION LTD.); 2600/DEL/14 (AY 2007-08) (DCIT VS. SAAMAG INFRASTRUCTURE LTD.; 2603/DEL/14 (AY 2007-08) (DCIT VS. SAGA DEVELOPERS (P) LTD.) AND 4058/DEL/2015 (AY 2011-12) (DCIT VS. SAAMAG DEVELOPERS LTD. filed by the Revenue stand dismissed.
Order pronounced on 08/07/2019.