ITO 16(1)(3), MUMBAI vs. SURENDRA R. SHAH, MUMBAI

This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-5, Mumbai, dated 29.04.2013 for A.Y. 1998-99 on following grounds:

“1. On the facts and circumstances and in law, the Ld. CIT(A) has erred in quashing the re-assessment proceedings u/s.143(3) r.w.s. of the I.T.Act 1961.

(a) While doing so the ld. CIT(A) has failed to appreciate the facts that assessee’s representative has been regularly attending and making submissions before the A.O. in the re-assessment proceedings without challenging the validity of the notice.

2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in recalling the re- assessment proceedings for deciding the matter fresh on merit though the A.O. has passed the re- assessment proceedings after giving proper opportunity of being heard.”

2.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) granted relief to assessee. A.Y. 98-99 [ITO vs. Shri Surendra R. Shah] Page 3 2.2 Same has been opposed on behalf of Revenue before us inter alia submitting that in facts and circumstances, CIT(A) erred in quashing re-assessment u/s.143(3) r.w.s. of the Act. While doing so CIT(A) has failed to appreciate the facts that assessee’s representative has been regularly attending and making submissions before the Assessing Officer in re- assessment proceedings without challenging the validity of the notice. On the other hand, ld. Authorized Representative supported the order of CIT(A).

2.3 In appellate proceedings, affidavit was filed along with letter dated 10.03.2011 inter alia stating that no notice dated 20.04.2001 issued u/s. 148 of the Act as alleged in the assessment order passed u/s. 143(3) r.w.s. 147 of the Act for A.Y. 1998-99 has ever been served upon deponent, Shri Surendra R. Shah. For the said reason, the assessment order passed u/s. 143(3) r.w.s. 147 of the Act for A.Y.1998-99 was alleged to be without jurisdiction, invalid and void ab initio. The copy of the said letter dated 10.03.2011 with the copy of affidavit was marked by assessee to concerned ITO. In spite of specific order of CIT(A), no case records were sent. Subsequently, vide letter dated 29.01.2013 addressed to ITO with a copy to Addl. CIT duly received in their offices on 18.02.2013. Assessing Officer was required to send the report regarding service of notice u/s. 148 of the Act alongwith evidence thereof by return of post. It was also desired that the report be sent through Addl. CIT 16(1), A.Y. 98-99 [ITO vs. Shri Surendra R. Shah] Page 4 Mumbai. However, no report has been received in this regard till relevant point of time. The stand of assessee has been taken a specific ground before the ITAT that notice u/s. 148 of the Act for re-opening the assessment was never served on the assessee. While restoring the issue to CIT(A) required to find out whether any notice u/s. 148 of the Act was served or not. CIT(A) required the concerned Assessing Officer to send the case records for perusal. However, no case records were sent. Subsequently, letter was written to the concerned Assessing Officer, which was also not responded as discussed above. Under these facts and circumstances, specially keeping in mind the affidavit filed by assessee that no notice has been served upon assessee in the absence of any evidence produced it can only be concluded that notice u/s. 148 of the Act has not been served. Under these circumstances, without any evidence that notice u/s. 148 of the Act was served, proceedings u/s 143(3) r.ws. 147 of the Act were not justified. Since the proceedings u/s 147 of the Act are quashed, CIT(A) did not go into the merits of the issues. Further, CIT(A) observed that in case Assessing Officer at any stage can come through necessary evidence show that the notice u/s. 148 of the Act was sent through ordinary post/UPC/Registered Post/through Notice Server/by any other mode/means etc. the same shall be treated as proper service of the notice u/s. 148 of the Act and the proceedings shall be re-called and the matter decided afresh on merits and the assessee shall be liable for ITA No.5192/Mum/13 A.Y. 98-99 [ITO vs. Shri Surendra R. Shah] Page 5 consequences. Nothing new facts have been brought on record on behalf of Revenue, under these circumstances, we are not inclined to interfere with the finding of CIT(A). Same is upheld.

Pronounced in the open Court on this the 24th day of June, 2016.

Sd/- Sd/- (RAJESH KUMAR) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai: Dated 24/06/2016 True Copy S.K.SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार, आयकर अपील�य अ�धकरण, मुंबई ।