RANJEET SINGH,PATNA vs. ITO, WARD- 5 (5), PATNA
Facts
The assessee is challenging an order that confirmed additions of Rs. 30,50,000/-. The additions were based on unexplained cash deposits of Rs. 14,50,000/- made during demonetization and other credits of Rs. 16,00,000/- in the bank account. The primary contention of the assessee is that the reassessment proceedings were vitiated due to non-service of mandatory notices.
Held
The Tribunal held that the reassessment proceedings were vitiated due to non-service of notice u/s 148 of the Act, which is a mandatory procedural requirement for making an assessment. The Tribunal directed the Assessing Officer to serve the notice u/s 148 and then proceed to make the assessment de novo after providing the assessee an opportunity to file a return and be heard. Relief was granted to the extent of Rs. 2,50,000/- out of the cash deposit addition, and a verification was ordered for the other addition. The grounds related to double addition were allowed.
Key Issues
Whether the reassessment proceedings are valid when the notice u/s 148 was not served on the assessee, and whether the additions made under section 69A are justified.
Sections Cited
250, 147, 143(3), 148, 69A, 115BBE, 142(1), 133(6), 292BB, 143(2), 149, 148(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
आयकर अपीलीय अधिकरण पटना पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH AT KOLKATA [वर्चुअल कोटु] [Virtual Court] श्री संजय शमाु, न्याधयक सदस्य एवं श्री राकेश धमश्रा, लेखा सदस्य के समक्ष Before SHRI SONJOY SARMA, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh ITO, Ward-5(5), Patna Vs. (Appellant) (Respondent) PAN: BXUPS0267H Appearances: Assessee represented by : A. K. Rastogi, Adv. Department represented by : Ashwani Kr. Singal, JCIT. Date of concluding the hearing : December 17th, 2024 Date of pronouncing the order : March 17th, 2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18 dated
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“7.1 In the Ground No.1 to 4 of the appeal, the assessee has raised objection basically on two issues the first being that notice u/s.148 was never served on to him and no notice u/s.143(2) was ever issued to him by the AO. Though, the appellant is making open statement that notice u/s148 was never served upon him but he is completely silent as to whether this issue was ever raised by him before the AO while participating in the assessment proceedings. If so, is there any written document/letter available with him and why the copy of same is not being filed during the course of appeal proceedings. From the body of assessment order, it is clear that a notice u/s.148 dated 01.08.2018, was duly generated and issued by the AO. It is also clear from the assessment order that in response to show cause notice dated 09.10.2019, the appellant did file written submission thereby participating in the assessment proceedings. His participation in the proceedings and his action of not having raised any objection before the AO regarding the service of notice u/s.148 is in complete contradiction to the statement(s) made by him at the appellate stage. Nevertheless, even if the assessee chooses to raise such a contradictory issue at the stage of appeal, the same should have been supported by way of some kind of a cogent evidence such as a certificate from the postal authorities and or extracts of his e-mail ID registered with the Department etc. Prima-facie the objection of the assessee of not having served with a notice u/s. 148, that too not supported by way of any evidence, appears to be a self-serving statement which cannot be taken cognizance of. 7.1.1 The assessee submits that the assessment order is bad in law as no notice u/s. 143(2) was issued to him. On the identical issue the Hon'ble Bench of ITAT, Hyderabad in the case of Gonuguntla Nirmala Devi Vs ACIT (ITAT Hyderabad) in the Appeal Number: ITA No. 412/Hyd/2022, pronounced recently on 17/08/2023 has held that the absence of a Section 143(2) notice did not affect the proceedings when no return was filed by the assessee within the stipulated time. In the case under consideration, the fact remains that the assessee has never filed any income-tax return in response to notice u/s.148 and the AO issued notices u/s.142(1) from time to time and hence, there is no infirmity in the action of AO in completing the assessment proceedings. The appellant in his submission, as reproduced above under para 6 of this order has repeatedly stated that issuance of notice u/s.143(2) is a prior requisite for completing the assessment proceedings for which the reference to several case-laws has also been made. However, in all the cases referred by the
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“143(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of three months from the end of the financial year in which the return is furnished.” 11. It is also imperative to understand the provisions of section 292BB of the Act which are as under:
“292BB. Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was— (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.” 12. Apparently, no such objection was raised before the Ld. AO therefore the assessee was precluded from raising any such objection subsequently. The assessee has relied upon the decision of Hon'ble Supreme Court in the case of R.K. Upadhyaya vs. Shanabhai P. Patel
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“Section 34, conferred jurisdiction on the Income-tax Officer to reopen an assessment subject to service of notice within the prescribed period Therefore, service of notice within limitation was the foundation of jurisdiction. The same view has been taken by this court in Jani v. Induprasad Devshanker Bhatt [1969] 72 ITR 595 as also in CIT v. Robert [1963] 48 ITR 177 (SC). The High Court, in our opinion, went wrong in relying upon the ratio of Banarsi Debi v. ITO [1964] 53 ITR 100, in disposing of the case in hand. The scheme of the 1961 Act so far as notice for reassessment is concerned is quite different. What used to be contained in section 34 of the 1922 Act has been spread out into three sections, being sections 147, 148 and 149, in the 1961 Act. A clear distinction has been made out between " issue of notice" and "service of notice" under the 1,961 Act. Section 149 prescribes the period of limitation. It categorically prescribes that no notice under section 148 shall be issued after the prescribed limitation has lapsed Section 148(1) provides for service of notice as a condition precedent to making the order of assessment. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the Income-tax Officer to proceed to reassess. The mandate of section 148(1) is that reassessment shall not be made until there has been service. The requirement of issue of notice is satisfied when a notice is actually issued. In this case, admittedly, the notice was issued within the prescribed period of limitation as March 31, 1970, was the last day of that period. Service under the new Act is not a condition precedent to conferment of jurisdiction on the Income-tax Officer to deal with the matter but it is a condition precedent to the making of the order of assessment. The High Court, in our opinion, lost sight of the distinction and under a wrong basis felt bound by the judgment in Banarsi Debi v. ITO [1964] 53 ITR 100. As the Income-tax Officer had issued notice within limitation, the appeal is allowed and the order of the High Court is vacated. The Income-tax Officer shall now proceed to complete the assessment after complying with the requirements of law. Since there has been no appearance on behalf of the respondents, we make no orders for costs. Appeal Allowed.” {emphasis supplied} Page 15 of 19
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Assistant Registrar ITAT, Kolkata Benches Kolkata
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