KHUSHAL,NEW DELHI vs. ITO, NEW DELHI

सुनवाई क� तार�ख/Date of Hearing : 27/04/2017 घोषणा क� तार�ख /Date of Pronouncement: 28/04/2017 ORDER

This appeal of the assessee arises from the order of CIT(A)-17 New Delhi vide order dated 22.12.2015 for the assessment year 2009-10. The assessee has raised as many as 6 grounds of appeal and at the outset the Id. Counsel for the assessee argued ground no. 1 and 2 being the legal grounds which are reproduced as under: i. Whether on the facts and in the circumstances of the case and in law, where the notice u/s 148 of the Income Tax Act, 1961, was not served upon the Appellant, the Assessing Officer was justified in taking proceedings against the assesse. The Ld. Commissioner of Income Tax (Appeals) has not adjudicated this issue and passed his order, which is against law. He has not even acknowledged section 147 under which the impugned Assessment Order was passed alongwith section 143(3) of the Act, in his Appeal Order. Whether on the facts and in the circumstances of the case and in law, ltd. Assessing Officer was justified in carrying out assessment proceedings u/s 143(2) and passing the Assessment Order u/s 143(3) of the Act, as the appellant had never filed income tax return for the said assessment year.

"As per AIR information assesse has deposited cash of Rs.47,13,135/- during FY 2008-09 in his saving bank account. No Return was filed by the assessee for AY 2009-10. Notice u/s 133(6) was issued on 30.01.2012 fixing the case for hearing on 10.2.2012. The AR of the assessee has filed reply dated 22.2.2012 stating that assessee was petty walking broker/commission gent working at Gaffar Market, Karol Bagh, New Delhi having no permanent business place there and earned approximately Rs.5,000/- to Rs.6,000/- per month as brokerage/commission from various parties who come from outside Delhi to purchase the various items. In the month of Nov. 2008 one person named Ram Naresh Yadav contacted the assessee and offered him Rs.12,000/- per month on the condition that he will operate assessee's bank account and will keep the cheque books himself to be used by him exclusively. Assessee agreed to 'it and received Rs.72,000/- approximately from Ram Naresh Yadav and commission of Rs.60,000/- during the year 2008-09. As assessee failed to file any details of the person who used his bank account and any other documents, case was re-opened u/s 148 of the IT Act after recording reasons. Subsequently, notice u/s 148 was issued on 6.3.2013 but no reply received from the assessee nor any return filed. Notice u/s 143(2) and 142(1) was issued on 23.8.2013 fixing the case for hearing on 3.9.2013 alongwith questionnaire. Notice u/s 143(2), was issued fixing the case for hearing on 13.03.2014, but received back unserved. AR of the assessee has filed reply on dated 24.03.2014 s per questionnaire issued on 23.8.2013, stating that assessee has no bank account and the tax already paid the tax due on estimated basis 23.8.2013, stating that assessee has no bank account and the tax already paid the tax due on estimated basis. Assessee has replied vide letter dated 27.9.2013 and enclosed earlier reply in which he had submitted that some other person had used his bank account. Assessee vide his letter 24.10.2013 has submitted reply alongwith computation of income and submitted that though the assesse is unaware of the bank transaction under the circumstances to be peace and to avoid mental tension amount is surrendered voluntarily to be assesse u/s 44AF of the IT Act, and offered Rs.2,35,656j- @5% of the income of gross receipts and paid tax thereon.

Assessee's contention has been considered but not acceptable. Assessee had earlier submitted that some other person has used his bank account and all the cash deposits are done by him and he used to receive some commission only in return of that. Now assesse is claiming this amount as his gross, receipts which is not acceptable. Assessee has contradicted his own statement and moreover his declaring income u/s 44AF is after thought since he has not filed his return. Hence

Rs.47,13,135/- is considered as undisclosed income of the assesse." 3. Before the Id. CIT(A), the assessee raised the issue that notice u/s 148 of the Act and notice u/s 143(2) of the Act was bad in law, especially notice u/s 148 was never served on the assessee and notice u/s 143(2) of the Act was barred by limitation. This issue was never decided by the Id. CIT(A), though the assessee raised the additional ground of appeal before me in this regard which are reproduced hereinbelow:

1. Whether on the facts and in circumstances of the case and in law Id. Commissioner of Income Tax (Appleals) has erred in upholding the validity of assessment framed under section 147/143(3) of the Income Tax Act, 1961, which order is bad in law and be quashed for the reason that no Income Tax Return was filed and for proceedings under sections 143(2) filing of the return is since qua non.

2. Because there being no service of notice under section 148, no Income Tax Return was filed by the appellant; the entire assessment framed under section 148 is bad in law and be quashed.

4. The said additional grounds have been admitted in view of the decision of Hon'ble Supreme Court in the case of NTPC 229 ITR 383 since the issue goes deep into the root of the matter.

5. The Id. DR however conceded that the issue has not been decided by the Id. CIT(A), though the said issue was raised before the Id. CIT(A), is a matter of record.

6. I have heard the rival contentions and perused the facts of the case. There is no dispute to the fact that issue was raised before the Id. CIT(A) w.r.t. non service of notice u/s 148 of the Act and notice u/s 143(2) is barred by limitation. Therefore in the interest of justice, the matter is set aside to the file of the Id. CIT(A) to decide the issue with regard to the notice u/s 148 and 143(2) of the Act who will decide the same denovo but by affording adequate opportunity of being heard to the assessee. Thus Ground No.1 and 2 are allowed for statistical purposes.

7. As regard the grounds on merit, the assessee is changing the stand from time to time that his income is below taxable limit firstly, his income is above taxable limits and he has paid the taxes but not filed the return and his turnover is above Rs. 40/- lacs secondly, he was getting commission only during the year and somebody else has used his bank account on commission basis thirdly and so on. The Id. CIT(A) is directed to obtain the address of the person who has used the said account and summon the said person and examine the veracity of the stand taken by the assessee and also summon the assessee to examine the stand taken by the assessee. Thus the issues on merit are also set aside to the file of the AD i.e. ground no.3 to 6 are directed to be decided denovo by the Id. CIT(A) as per the directions hereinabove but by providing adequate opportunity of being heard to the assessee. Thus grounds no.3 to 6 are allowed for statistical purposes.