ANIL,DELHI vs. ITO, WARD- 34(5), NEW DELHI

ORDER The present appeals have been filed by the assessee assailing the correctness of the separate orders dated 31.08.2017of Commissioner of Income Tax (Appeals)-12, New Delhi pertaining to 2011-12 A.Y. in the quantum proceedings and the penalty proceedings respectively.

by the assessee in the quantum proceedings i.e. ITA 6452/Del/2017 read as under: “On the facts and in the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals)-12 erred in –

1. Confirming the addition of Rs. 15,00,000/- against the income assessed at Rs. 17,99,998/- by the Assessing Officer.

2. The appellant craves leave to alter, amend or add to the foregoing grounds before or at the time of hearing of the appeal.”

3. Both the parties were heard. The Ld. AR addressing the facts and the additions assailed stated that infact the assumption of jurisdiction by the AO itself was contrary to law in the facts of the present case. The said fact, it was submitted, was evident from para 7.4 of the impugned order. It was stated on query that infact the assessee has not received the copy of recorded reasons as he was not even properly advised. The Ld. Sr. DR submitted that no such ground has been raised by the assessee as the assessee has only challenged the addition on merits. The Ld. AR in response submitted that the jurisdictional issue going to the root of the material can be addressed at any stage and since he was not praying for an adjudication at this stage and was only praying for a remand for addressing the facts, the reference to the facts available on record cannot be objected to. It was his submission that on the basis of facts recorded by the CIT(A) itself i.e. the order on which ld. DR would rely the issue is covered in assessee's favour. Thus, it was his prayer that the oral argument assailing the jurisdiction can be said to be covered under the residuary ground moved by the assessee as the limited prayer of the assessee is only for remand at this stage. In the circumstances, ld. Sr. DR relies upon the assessment order and the impugned order and requested that the facts be first seen by the CIT(A) and relief may not be granted by quashing the order.

4 I have heard the submissions and perused the material available on record. It is seen that the assessee before the CIT(A) raised the following specific grounds for adjudication on the jurisdictional issue :

"2. That no notice u/s 148 of Income Tax Act, 1961 was served upon the assessee before framing the orders of assessment.

“7.4 I have gone through the facts of the case and considered the submission of the appellant. It may be seen that the Assessing Officer issued the notices on the available address. The notices were not received back as unserved. The address was taken by the AO from the bank as per KYC details. These facts clearly suggest that the notices have been validly served on the assessee. The assessee did not call for the reason recorded before issuing notice u/s 148 of the Act so the allegation that reason was not recorded is based on presumption, liable to be dismissed. In view of these facts I hold that the assessment order passed by the AO is valid with no legal lacunae.” 4.2 The Ld. Sr. DR inviting attention to the assessment order in her submissions has sought to make out a case that notice u/s 148 had been issued on 17.04.2013 after recording reasons and it was duly served upon the assessee as noted at page 1 line 6 and 7 of the assessment order. However, she was unable to state on query as to the mode of delivery and the date of service of the same as these relevant facts have not been addressed either by the AO or the CIT(A). In view of the patent and evident lack of discussion on the relevant facsts, she was unable to clarify. The Ld. AR, on the other hand, referring to para 7.4 of the impugned order submitted that it was the responsibility of the CIT(A) while affirming the order to atleast refer to the necessary facts supposedly having been noticed by him which if noticed, ought to have been brought on record. It was his vehement submission that the assessee’s address continuous to remain the same and the assessee has received the assessment order in the subsequent assessment year at the very same address. Thus, it was stated that according to his instructions, no such notice has been received by the assessee. It has been argued that no finding is given by the CIT(A) that reasons recorded have been seen by him. The Sr.DR’s argument that there is a presumption under law that notice has been served upon the assessee, it was submitted, is a rebuttable presumption and when the department is called forth to justify the same, the authority needs at that stage to demonstrate by way of positive evidences to show that there was an effective service of notice. 5. In the light of the submissions of the parties and lack of relevant and cogent discussion in the order considering the grounds raised in appeal before the CIT(A), I find that the impugned order cannot be upheld. Accordingly, the said order is set aside back to the file of the CIT(A) with the direction to pass a speaking order in accordance with law, after giving the assessee a reasonable opportunity of being heard.

5. In the result, the appeal of the assessee is allowed for statistical purposes.

6. In Assessing Officer u/s 271(1)(c ) of the Act, which has been upheld by the CIT(A). Since the correctness of the penalty order passed by the CIT(A) in appeal is dependent on the Quantum order which order has been set aside, the impugned order, accordingly, passed in the penalty proceedings is also set aside back to the file of the CIT(A) with a direction to pass a speaking order in accordance with law, after first deciding the Quantum appeal and thereafter providing the assessee a reasonable opportunity of being heard separately in the penalty proceedings. Accordingly, in view of the above, the impugned order also is set aside back to the CIT(A) with the aforesaid direction.

The order is pronounced in the open court on 26/06/2018.