ASHOK KUMAR GUPTA,NEW DELHI vs. ITO, WARD- 39(1), NEW DELHI

This appeal filed by the assessee is directed against the order dated 08.05.2018 of the CIT(A)-13, New Delhi relating to A. Y. 2009-10. 2. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 30.03.2009 declaring total income of Rs.2,66,893/-. On the basis of information received from the Investigation Wing of the department that cash amounting to Rs.2,30,96,884/- was deposited in the bank account of M/s. Pooja Home Appliances, the proprietary concern of the assessee, the case of the assessee was reopened as per provisions of section 147 of the Act and notice u/s. 148 of the Act was issued on 29.03.2016. Thereafter the notice u/s. 142 (1) of the Act was issued directing the assessee to file copy of the return of the income, profit and loss account, balance sheet, tax audit report and statement of affairs. However, there was no compliance for which another letter was issued. There was also no proper compliance from the side of the assessee. The Assessing Officer, thereafter, completed the assessment u/s. 147/144 of the IT Act determining the total income of the assessee at Rs.16,51,910/- wherein the Assessing Officer made addition of Rs.13,85,813/- being income from unexplained source.

4. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal :-

1. The appellant is an Individual, having business income amounting Rs. 2,66,093/- in FY 2008-09 relevant to A.Y. 2009-10.

2. As informed to the appellant his case was reopened u/s 147/148. 3. Notice u/s 148 was never served to the assessee.

1. That the Ld. CIT(A) erred in considering the fact that the Ld. AO has passed an order u/s 144/147 without issuing an notice u/s. 143 (2).

6. After hearing both the sides the additional ground raised by the assessee is admitted for adjudication.

7. The Ld. Counsel for the assessee submitted that the assessee has never received any notice u/s. 148 of the IT Act since the same was neither issued nor served upon the assessee and, therefore, the reassessment proceedings u/s. 148 of the IT Act are not valid. Further no notice u/s. 143 (2) has been issued/ served on the assessee during the assessment proceedings u/s. 147 of the IT Act. Further the copy of the reasons recorded was not provided by the Assessing Officer to the assessee which are mandatory. Relying on various decisions the Ld. Counsel for the assessee submitted that non service of Page | 3 notice u/s. 143 (2) makes the assessment proceedings invalid. Similarly non service of notice u/s. 148 and non service of reasons recorded by the Assessing Officer for reassessment proceedings makes the proceedings invalid. Referring to the para No.5.11 of the order of the CIT(A) he submitted that it was brought to his notice that no notice u/s. 148 of the Act was ever received by the assessee. He accordingly submitted that the reassessment proceedings should be quashed. The Ld. Counsel for the assessee, however, did not argue the case on merit.

8. The Ld. DR on the other hand strongly supported the order of the CIT(A) on the issue of validity of reassessment proceedings. In his alternate contention he submitted that he has no objection if the matter is restored to the file of the CIT(A) for adjudication of the issue afresh.

9. I have considered the rival arguments made by both the sides and perused the orders of the AO and CIT(A). I have also considered the various decisions cited before me. I find the AO on the basis of information received from the Investigation Wing that assessee has made huge cash deposits in the bank accounts reopened the assessment u/s. 147 of the Act and notice u/s. 148 of the Act was issued on 29.03.2016 as per the assessment order. I find due to non compliance from the side of the assessee the Assessing Officer completed the assessment u/s. 147/144 determining the total income of the assessee at Rs.16,51,910/- which has been upheld by the CIT(A). The Ld. CIT(A) further upheld the reassessment proceedings. It is the submission of the Ld. Counsel for the assessee that the Page | 4 assessee neither received the notice u/s. 148 nor the notice u/s. 143 (2), therefore, the proceedings are void ab initio. It is also his submission that the reasons recorded by the Assessing Officer for reopening of the assessment was never supplied to the assessee by the AO. I find all these issues were not properly adjudicated by the Ld. CIT(A) while adjudicating the validity of reassessment proceedings. Considering the totality of the facts of the case and in the interest of justice I deem it proper to restore this issue to the file of the Ld. CIT(A) with the direction to decide the issue afresh and in accordance with law after giving a reasonable opportunity of being heard to the assessee. He may also call for a remand report from the AO, if necessary. The grounds raised by the assessee are accordingly allowed for statistical purposes.

10. In the result, the appeal filed by the assessee is partly allowed for statistical purpose. Order pronounced in the open court on 08.08.2019.