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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 37 / 2009 Alokik Kumar Jain R/o Mangal Niwas, Vijaypada, Rampura, Kota ----Appellant Versus 1. Income Tax Appellate Tribunal, Jaipur 2. Commissioner of Income Tax (Appeals), Kota 3. Income Tax Officer, Ward-I (i) Kota ----Respondent Connected With D.B. Income Tax Appeal No. 131 / 2009 Rajendra Kumar Jain, R/o Mangal Niwas, Vijaypada, Rampura, Kota ----Appellant Versus 1. Income Tax Appellate Tribunal, Jaipur Bench, SMC Jaipur 2. Commissioner of Income Tax (Appeals), Kota 3. Income Tax Officer, Ward-I (i) Kota ----Respondent D.B. Income Tax Appeal No. 414 / 2009 Alokik Kumar Jain R/o Mangal Niwas, Vijaypada, Rampura, Kota ----Appellant Versus 1. Income Tax Appellate Tribunal, Jaipur Bench, Rajasthan Chamber Bhawan, Jaipur 2. Commissioner of Income Tax (Appeals), Near CAD Circle Kota 3. Income Tax Officer, Ward-I (I), Near CAD Circle, Kota ----Respondent _____________________________________________________ For Appellant(s) : Mr. Anant Kasliwal For Respondent(s) : Ms. Parinitoo Jain _____________________________________________________
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HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 01/08/2017 In these appeals common questions of law and facts are involved, hence, they are decided by this common judgment. 1. By way of these appeals, the appellant has assailed the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeals preferred by the assessee confirming the order of AO. 2. This court while admitting the matter framed the following questions of law:- DBITA No. 37/2009 “i) Whether the ITAT has erred in not having considered the issue of non-service of notice u/s 148 within the prescribed time frame despite this fact emerging from the assessment record? ii) Whether the ITAT was justified in law in having disallowed the claim for loss suffered by the Appellant-assessee in trading of Mustard undertaken through M/s Hari Agro Mills Private Ltd., Jamshedpur despite the same having been duly confirmed by the M/s Hari Agro Mills Private Ltd., Jamshedpur.?” DBITA No. 131/2009, DBITA No. 414/2009 i) Whether the ld. ITAT has erred in having taken the view that the issue relating to the validity of service of notice u/s 148 of the Act, 1961 within the prescribed time frame is no more open to the appellant in view of its order dated 21.12.2004. ii) Whether the ITAT has erred in not having considered the issue of non-service of notice u/s 148 within the prescribed time frame despite this fact emerging from the assessment record.?”
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Counsel for the appellant contended that in the original order which came to be passed it has been admitted on page 23 that notice was served on Radhe Shyam Nagar on 14th March, 2000 and that date was not known to the assessee. The same fact was also admitted by the CIT(A) observing as under:- “2.3. The submissions that the notice was not served is also not acceptable because it is an admitted fact that the notice was served on the business premises of the assessee and therefore it is not acceptable that it was not in the knowledge of the appellant. The appellant has admittedly attended the office of the AO, subsequently and within the financial year i.e. before 31.3.2000 and this was admitted to be in response to his knowledge that the notice was issued in his name.” 4. However, CIT(A) has dismissed the appeal holding that after first round of litigation, the assessee has gone in appeal wherein it has been observed as under:- “I have considered the argument of the appellant and perused the assessment order as well as the facts available on record. It is seen that this issue came up for consideration before the erstwhile CIT(A), Rajasthan-II. She has considered the issue and has observed as under:- 2.2 I have considered the facts of the case and the submissions made, and don’t find the arguments given to be acceptable for the following reasons. The appellant has not filed any return of income for the relevant assessment year up to the finalization of the assessment by the AO. The AO has as per records, the information that the appellant was in receipt of substantial income above the taxable income being determined share of business income from firms in which the appellant was a partner. Such determined share of the appellant form the firms was substantially above the limit prescribed for taking action under section 148 within the time limit up to the date of issuance of notice under section 148 in the case of the appellant for this assessment year. Therefore there is no justification in the appellant’s submissions that
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action under section 147 was bared by limitation and therefore the proceedings are void abinitio. 2.3 The Submissions that the notice was not served is also not acceptable because it is an admitted fact that the notice was served on the business premises of the assessee and therefore it is not acceptable that it was not in the knowledge of the appellant. The appellant has admittedly attended the office of the AO subsequently and within the financial year i.e. before 31.03.2000 and this was admitted to be in response to his knowledge that the notice was issued in his name. There is also no evidence with the appellant that the income declared by him for the year was correct income because the return filed at Rs.12,200/- in assessment year 1990-91 and Rs.19,980/- for assessment year 1991-92 was much lower than the determined share from the firm which is very much higher. It is not the case of the appellant that the AO is incorrect in stating that he was a partner in the firms as indicated in the assessment order. Accordingly therefore, computation of Income is justified and the same is confirmed.” Besides the various facts mentioned by the erstwhile CIT(A), It is seen that the notice u/s 142(1) was issued on 13.03.2000, which was returnable on 21.03.2000. This notice was admittedly received by Shri Radheshyam Nagar. Admittedly, the appellant has attended in response to the notice u/s 142(1), though belatedly before the AO and therefore, he has also filed return of income. These facts indicate that the appellant was in knowledge of the notice u/s 147/148, which was issued on 27.03.1998. In view of these facts and circumstances, the objection of the appellant in this regard is rejected and ground taken by the appellant failed.” 5. However, the same contention was raised by the assessee before the Tribunal in present appeal where the Tribunal after considering the case has held that it is not open for the assessee to raise the same contention.
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Counsel for the respondent has supported to the order and contended that in view of the remand order where department has in the previous litigation agreed for remand to consider that the notice is served on the assessee. Therefore, after considering the case no error has been committed by the Tribunal and it is purely a question appreciation of facts. In that view of the matter, no question of law arises. 7. We have heard counsel for both the sides. 8. Counsel for the appellant has relied upon the two decisions of Delhi High Court in the case of Commissioner of Income Tax vs. Chetan Gupta reported in [2016] 382 ITR 613 (Delhi) wherein it has been held as under:- “Held accordingly, that no attempt had been made by the Department to serve the assessee at the address provided by him. All the notices were addressed to him at another address C/o. Kiran Cinema. Therefore, this was not a case where an attempt was made by the Department to serve the assessee at his known address, and upon not finding him there the Department learnt of the address where he would be found. Merely because other notices sent to the ‘assessee group” were received by the employees of Kiran Cinema it did not automatically lead to the inference that the assessee’s place of business was also Kiran Cinema. In any event, there could not be an inference that V was duly empowered by the assessee to receive notices on his behalf. In the very first notice dated March 28, 2008 the endorsement made by V Showed him describing himself as “accountant, Kiran Cinema” and nothing more. The assessee made a specific request to the Assistant Commissioner that a copy of notice under section 148 along with basis and reason of opening the case under section 148 be provided to them to enable him to comply with it. However, the Assistant Commissioner in his reply of the same date continued to show the addresses of the assessee as C/o Kiran Cinema and insisted that
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notice had been validly served on V, accountant of Kiran Cinema (who also received other notices of the concerned group concerns). Section 292BB is prospective. In any event the assessee in the present case, having raised an objection regarding the failure by the Department to effect service of notice upon him, the main part of section 292BB was not attracted. Since no proper service of notice had been effected under section 148(1) of the Act on the assessee, the reassessment proceedings were liable to be quashed. 9. He has also relied upon the decision of Jammu Kashmir High Court in the case of Dina Nath vs. Commissioner of Income Tax reported in (1993) 204 ITR 667 wherein it has been held as under:- “The admitted facts of the case are : that, on the last day when the assessment was to be made, a notice was served upon one Som Nath, who is neither a member of the family of the assessee nor his duly authorised agent having specifically been authorised to accept the notice on behalf of the assessee. It is also established that Som Nath had been accepting the notice earlier for and on behalf of the assessee and prosecuting the cases on his behalf before the Income Tax authorities. In order to appreciate the rival contentions of learned counsel for the parties, a reference is required to be made to the provisions of Sub-section (2) of Section 143 of the Act, which provides : "143. Assessment.--. . . . (2) Where a return has been made under Section 139, or in response to a notice under Sub-section (1) of Section 142, the Assessing Officer shall, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return :
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Provided that no notice under this sub-section shall be served on the assessee after the expiry of the financial year in which the return is furnished or the expiry of six months from the end of the month in which the return is furnished, whichever is later." 10. Having considered the order, the first contention that notice was not served, is not open after the remand order. In our considered opinion, the view taken by the Tribunal is just and proper. 11. The question is required to be answered in favour of the department against the assessee. 12. The appeals stand dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. A.Sharma/7-9