SMT. KARAMJEET KAUR,LUDHIANA vs. ITO, W-III(4), LUDHIANA

आदेश/Order

PER ANNAPURNA GUPTA, AM This appeal has been filed by the assessee against the order passed by the Commissioner of Income Tax –(Appeals)- I, Ludhiana [in short referred to as” CIT(A)”], u/s 250(6) of the Income Tax Act,1961 (in short referred to as “Act”)dated 15-03-2018, relating to A.Y. 2009-10.

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Bank during the period covered by the assessment year

under consideration. Acting upon this information, the AO,

exercising the power vested in him to call for any

information under the provisions of section 133 (6) of the

Income Tax Act, 1961 [henceforth, "the Act"], requisitioned

the account statement from the aforesaid bank to find that

there had been a deposit of cash on various dates,

aggregating to Rs.36,71,000/-. Since the assessee was stated

to have not responded to notices under section 148/142 (1)

of the Act, the AO was constrained to pass an ex parte order

under the provisions of section 144/148 of the Act,

assessing the aforesaid deposit of cash of Rs.36,71,000/- as

unexplained investments under the provisions of section 69

of the Act. The said account statement also had credit of

interest amounting to Rs.14,205/-, which amount was also

treated as income of the assessee. The assessee was thus

fastened with the liability of tax and interest amounting to

Rs. 24,73, 110/-.

jurisdiction assumed u/s 148 of the Act for reassessing the

income of the assessee and also the addition made to the

income of the assessee on merits. The Ld. CIT(A) dismissed

the legal ground raised by the assessee and partly deleted

the additions made ,restricting it to Rs.21,71,000 as against

Rs.36,71,000 made by the Assessing Officer. Aggrieved by

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the same, the assessee has come up an appeal before us

raising the following grounds of appeal:

of assessment proceedings u/s 148 of the Act, Ld. Counsel

for the assessee stated that the notice u/s 148 was not

served on the assessee, therefore making the proceedings

thereunder invalid ,since service of the notice was a

mandatory requirement of law for initiating proceedings u/s

147 of the act. Ld. counsel for the assessee stated that this

argument has been raised before the CIT(A) also who had not

given any findings on the same .Our attention was drawn to

the order of the CIT(A) at para 6 wherein it was pointed

out that the CIT(A) had summarised the contentions of the

assessee on this issue which included the above contention

of non-service of notice u/s 148 of the Act as under:

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“6.It has further been alleged that the impugned notice under section 148 dated 28/05/2012 was not served on the appellant, making the assessment pursuant notice invalid in the eyes of law. Attention in this regard was invited, 'interalia, to the judgement of the Hon'ble Delhi High Court in the case of CIT Vs. Chetan Gupta, reported in 126 DTR 0401. The conclusion of the said judgement was extracted in the written submissions of the appellant to challenge the validity of the impugned assessment order. The same is extracted hereinbelow: "46. To summarize the conclusion: (i) Under Section 148 of the Act, the issue of notice to the Assessee and service of such notice upon the Assessee are jurisdictional requirements that must be mandatorily complied with. They are not mere procedural requirements. (ii) For the AO to exercise jurisdiction to reopen an assessment, notice under Section 148 (1) has to be mandatorily issued to the Assessee. Further the AO cannot complete the reassessment without service of the notice so issued upon the Assessee in accordance with Section 282(1) of the Act read with Order V Rule 12 CPC and Order III Rule 6 CPC. (iii) Although there is change in the scheme of Sections 147, 148 and 149 of the Act from the corresponding Section 34 of the 1922 Act, the legal requirement of service of notice upon the Assessee in terms of Section 148 read with Section 282(1) and Section 153(2) of the Act is a jurisdictional pre-condition to finalizing the reassessment. (iv) The onus is on the Revenue to show that proper service of notice has been effected under Section 148 of the Act on the Assessee or an agent duly empowered by him to accept notices on his behalf. In the present case, the Revenue has failed to discharge that onus." (v) The mere fact that an Assessee or some other person on his behalf not duly authorized participated in the reassessment proceedings after coming to know of it will not constitute a waiver of the requirement of effecting proper service of notice on the Assessee under Section 148 of the Act."

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(vi) Reassessment proceedings finalized by an AO without effecting proper service of notice on « the Assessee under Section 148 (1) of the Act are invalid and liable to be quashed." (vii) Section 292 BB is prospective. In any event the Assessee in the present case, having raised an objection regarding the failure by the Revenue to effect service of notice upon him, the main part of Section 292 BB is not attracted." "47. On the facts of the present case, the Court finds that the ITAT was right in its conclusion that 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. Consequently, the question framed is answered in the affirmative, i.e., in favour of the Assessee and against the Revenue." 5. Thereafter, our attention was drawn to the findings of

the Ld.CIT(A) at para 8 of the order as under:

“8. The submissions of the appellant have been considered. From the version of the ' AO by way of the remand report, it is gathered that the then jurisdictional AO, on having received information by way of Annual Information Return of non-PAN depositors of cash, issued a verification letter dated 07/03/2012 to the appellant, which was duly served upon her through her husband, Sh. Swaran Singh on 15/03/2012, seeking therein information regarding the sources of cash deposit by 19/03/2012. Since no further information was provided to the AO, he formed a belief of escapement of income to the extent of substantial cash deposits of Rs.36,71,000/- and after duly recording the reasons, issued the 28/05/2012, which was followed by notice under section 142 (1) of the Act. he assessment records, it is noticed that a summons under the provision quisite notice of escapement of income under the provisions of section 148 on of section 131 of the Act was also issued to the appellant by affixture on the last known address, which also remained un complied, forcing the AO to frame the ex parte assessment. From the factual records, it cannot be said that the appellant was not served with the requisite notice under section 148 of the Act and that the jurisdictional AO's assumption of jurisdiction to assess the escaped income was without adherence to the provisions and procedure in this regard. Once the verification letter regarding the sources of

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cash deposit in the bank account maintained by the appellant was not attended to, the AO rightly formed a belief of escapement of income to that extent and, therefore, assumption of jurisdiction to assess the income escaping taxation, under the provisions of section 148 was not without either authority or compliance to the procedural requirements. Considered in this background, the grounds of appeal pertaining to the allegation of reassessment notice being invalid or not having been served on the appellant, stand rejected.” 6. Referring to the same, it was pointed out that the

CIT(A) had taken no cognizance of this contention of the

assessee while dismissing the legal ground raised by the

assessee.

Ld. Council for the assessee. Ld.DR could not point out any

findings of the CIT(A) on the issue of non-service of the

notice u/s 148 of the Act raised by the assessee.

justice would be served if the issue was restored back to the

CIT(A) to consider this contention of the assessee, vis-a-vis

non service of the notice u/s 148 of the Act and adjudicate

the same after duly verifying all necessary facts relating to

the same.

to the CIT(A) and direct him to first adjudicate the legal

ground raised ,after dealing with all the contentions raised

by the assessee and after duly verifying all facts necessary

for the same. The grounds raised on merits of the case may

thereafter be dealt with by the CIT(A).

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Order pronounced in the Open court. Sd/- Sd/- �दवा �संह अ�नपणा� ग�ता (DIVA SINGH) (ANNAPURNA GUPTA) �याय�क सद�य/ Judicial Member लेखा सद�य/ Accountant Member �दनांक /Dated: 25th September, 2018 *रती* आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to :

आदेशानसार / By order, सहायक पंजीकार/ Assistant Registrar