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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
Per Dr. M. L. Meena, AM:
The present appeal has been filed by the assessee against the order
dated 27.09.2021 passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi in respect of Assessment Year 2012-13.
The assessee has raised the following grounds of appeal:
2 ITA No. 104 /Asr/2021 Harbhajan Kaur v. ITO “1. That on facts and circumstances of the case, order passed by the Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi is illegal and bad in law and has been passed without considering the submissions of the assessee.
That on the facts & circumstances of the case, Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, has grossly erred in law in holding that assessing officer has rightly assumed jurisdiction over the case and proceedings u/s 148 of the Act have been validly initiated by the assessing officer.
That on the facts & circumstances of the case, Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, has grossly erred in law in holding that issues raised in grounds of appeal no. 2 & 3 are factually wrong and as such are dismissed without appreciating:
a) That notice u/s 148 of the Act has never been served on the assessee.
b) That notice u/s 142(1) of the Act has never been served on the assessee. 4. That on the facts & circumstances of the case, Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, has grossly erred in law in upholding addition of Rs. 11,44,800/- being alleged unexplained investment u/s 69 of the Act. Addition confirmed is illegal and bad in law.
That on the facts & circumstances of the case, Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi ought to have deleted the addition of Rs. 11,44,800/- since Rs. 10,00,000/- were paid as advance in the year 2010-11 as evidenced by agreement to sell, copy of which was filed during appeal proceedings.
That order passed by Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi is based on assumptions & presumptions far away from facts of the case. Orders based on assumptions and presumptions are not permitted under law and are void ab-initio.
That the Appellant requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed off.”
3 ITA No. 104 /Asr/2021 Harbhajan Kaur v. ITO 3. Apropos ground no. 3, the ld. counsel for the assessee has
challenged validity of assumption of jurisdiction in absence of non-service
of notice under section 148 and 142(1) of the act on the assessee with the
support of the affidavit in annexure-A filed on record He argue that the
assessment order is illegal and bad in law. In support, he files a brief
written submission which reads as under:
Ground of appeal no. 3
That detailed submissions have been made at page no. 10 to 13 of written submissions before CIT(A) wherein assessee challenged that neither notice u/s 148 of the Act nor notice u/s 142(1) of the Act have ever been received. Assessee submitted that valid service of notice u/s 148 of the Act is a condition precedent for validity of proceedings u/s 147 of the Act. Mere issuance of notice u/s 148 of the Act within the time allowed u/s 149 of the Act is not enough but it has to be proved that notice u/s 148 of the Act was served upon the assessee. Similar is the position of notices u/s 142(1) of the Act and u/s 143(2) of the Act.
For this proposition reliance was placed on
a) Commissioner Of Income Tax Vs. Avtar Singh High Court Of Punjab & Haryana (2008) 219 CTR (P&H) 588 : (2008) 304 ITR 333 : (2008) 5 DTR 55 Pg. 38 to 41 case laws.
b) Commissioner of Income Tax Vs. LaxmiNarain High Court Of Punjab & Haryana (2008) 1 DTR (P&H) 209: (2008) 168 Taxman 128. Pg. 42 to 45 case laws.
c) Commissioner Of Income Tax Vs. Mani Kakar High Court Of Delhi (2009) 18 DTR (Del) 145 : (2009) 178 Taxman 315 Pg. 46 to 48 case laws.
d) Commissioner Of Income Tax Vs. MintuKalita High Court Of Gauhati (2001) 170 CTR (Gau) 149: (2002) 253 ITR 334 (Gau) : (2001) 117 Taxman 388 (Gau) Pg. 49 to 52 case laws.
4 ITA No. 104 /Asr/2021 Harbhajan Kaur v. ITO e) Commissioner Of Income Tax Vs. Ashok Kumar Bharti & Vijay Kumar Goel High Court Of Allahabad (2005) 198 CTR (All) 260 : (2006) 282 Taxman 496 (All) : (2005) 149 Taxman 247 Pg. 53 to 58 case laws. f) Commissioner Of Income Tax Vs. Rajeev Sharma High Court Of Allahabad: Lucknow Bench (2010) 232 CTR (All) 303 : (2010) 192 Taxman 197 : (2010) 40 DTR 129 Pg. 59 to 71 case laws.
g) Commissioner Of Income Tax Vs. Cebon India Ltd. High Court Of Punjab & Haryana (2010) 229 CTR (P&H) 188 : (2009) 184 Taxman 290 : (2010) 34 DTR 119 Pg. 72 to 74 case laws.
That affidavit to the effect that neither notice u/s 148 of the Act nor u/s 142(1) of the Act have ever been served on the assessee was also filed as Annexure A, same enclosed at page no. 16of paper book.
That submissions made have been rejected with one line observation that assessee did not bring any material on records that the said notices were not served on him. No observations on affidavit filed by the assessee have been made. No observations on case laws relied upon by the assessee have been made.
That it is an established law that if there is no material on records to doubt the veracity of the statement made in the affidavit and deponent has also not been crossed examined for bringing out falsity of the statement made in the affidavit, affidavit cannot be doubted. An affidavit is a piece of evidence which alongwith other material on records has to be taken into consideration before arriving at a finding.
For this proposition reliance was placed on
a) MEHTA PARIKH & CO. vs. CIT(1956) 30ITR181 (SC). Pg. 75 to 82 case laws.
b) DR. SYAMAL BARAN MONDAL vs. CIT (2011) 244CTR (Cal) 631: (2011) 200 TAXMAN 107: (2011) 60 DTR 247 Pg. 83 to 92 case laws.
c) GLASS LINES EQUIPMENTS CO. LTD. vs. CIT (2001) 119 TAXMAN 813 (Guj) Pg. 93 to 99 case laws.
d) MEENAKSHY LUCKY CENTRE vs. JCIT (2002) 74TTJ (Coch) 458 Pg. 99 to 144 case laws.
Briefly facts are that based on information in possession of the
department that assessee has purchased immovable property of
5 ITA No. 104 /Asr/2021 Harbhajan Kaur v. ITO Rs.10,80,000/- of which purchase deed was executed on 06.02.2012
where stamp duty charged was Rs. 64,800/-. After verification of
registration deed, Assessing Officer held that land purchased by the
assessee was “capital asset” within the meaning of section 2(14) of the
Income Tax Act, 1961 and unexplained investment in the said property was
taxable which escaped income in terms of section 147 of Income Tax Act,
1961 and required to be charged to tax as unexplained investment in the
purchase of immovable property. The AO issued notice u/s 148 of the Act
and further notice u/s 142(1) of the Act were issued which were never
served on the assessee. Assessment was framed u/s 144 r.w.s. 147/148 of
the Act vide order dated 30.11.2019 at income of Rs. 11,44,800/-.
In appeal, the Ld. CIT(A) has confirmed the issue of assumption of
jurisdiction and service of notice u/s 148 of the Act by observations in para
and 7. on page 20 and 21 of the impugned order as follows:
“6. Reopening: 6.1 In the grounds of appeal, the appellant contested that the assessment framed under section 144 r.w.s.147 is without jurisdiction and as such is illegal and bad in law.
6.2 In the written submission, the A.R stated that from the reasons recorded it is noticed that A.O received some information based on which he recorded reasons for re-opening and there was no basis or jurisdiction nor any material before the A.O to form a belief that income had escaped assessment.
6 ITA No. 104 /Asr/2021 Harbhajan Kaur v. ITO 6.3 In the Assessment Order the Assessing Officer stated the reasons for reopening asunder:
“I have examined the relevant records and after verification of the same with reference to the above discussed issues, I have reason to believe that income to the extent of Rs.11,44,800/-, unexplained investment as discussed above and also the income in respect of any issue which comes to the notice of the assessing officer during the course of proceedings under this section, chargeable to tax for the Assessment Year 2012-13 has escaped assessment within the meaning of Expl. 2(a) of section 147 of the Income Tax Act, 1961.”
6.4 The above extract from the assessment order proves beyond any doubt whatsoever that the Assessing Officer examined the relevant records and after verification of the same believed that the income chargeable to tax had escaped assessment.
Hence this ground of appeal is dismissed and the reopening of assessment is upheld.
Notices u/s 148 and u/s 142(1):
7.1 In the grounds of appeal the appellant contested that the impugned assessment framed u/s 144 r.w.s.147 is illegal and bad in law since notices u/s 148 and u/s 142(1) were not served on the assessee.
7.2 In the Assessment Order at Para No. 4 and 5 the Assessing Officer dearly stated that the notices u/s 148 and u/s 142(1) were served on the assessee.
Appellant did not bring any material on record that the said notices were not served on him. Hence these grounds of appeal are dismissed as factually wrong.
Per Contra, the learned DR supported the order of the CIT.
We have heard the rival contentions, considered relevant material,
citations and return submissions filed by both the sides. The assessee has
challenged the validity of the assessment order on account of non service
7 ITA No. 104 /Asr/2021 Harbhajan Kaur v. ITO of the notice should under section 148 of the Income Tax Act 1961. The
learned AR argued that valid service of notice under section 148 of the act
is a condition precedent for validity of the proceedings under section 147 of
the act and mere issuance of notice under section 148 of the act within the
time allowed under section 149 of the act is not enough as it has to be
proved that notice under section 148 of the act was served upon the
assessee and similar is the position of the service of notice under section
143 (2) and 142 (1). The learned council has filed an affidavit as annexure
in support of the submissions that neither notice under section 148 of the
Act nor notice under section 142(1) of the act had ever been served on the
assessee. The appellant has alleged that the learned CIT appeal has
disposed off the ground of validity of the assessment challenged by the
assessee in a very casual manner without appreciating the fact of service
of notice under section 148 of the Income Tax Act.
The Hon’ble jurisdictional Punjab and Haryana High Court in the
case of Commissioner of Income Tax v. Avatar Singh [2008] 219 CTR
(P&H) 588 has held that the service of notice under section 148 of the act
is a condition precedent for validity of the reassessment proceedings under
section 147 of the Act by observing vide para 8 as follows:
8 ITA No. 104 /Asr/2021 Harbhajan Kaur v. ITO “8. We are not inclined to accept the submission made by learned counsel for the appellant Revenue, as in the present case, no evidence in the shape of postal receipt was produced by the Revenue before the authority that actually, the said notice was sent by registered post and was served upon the assessee. The Tribunal has affirmed the categoric finding recorded by the CIT(A) that in the present case, the Revenue has not led any evidence to show that notice under s. 148 of the Act was actually served upon the assessee. In our view, the CIT(A) as well as the Tribunal have recorded a pure finding of fact, after considering the material available on record to the effect that notice under s. 148 of the Act was actually not served upon the assessee, which was a condition precedent for making reassessment or recomputation under s. 147 of the Act. We do not find any ground to interfere in the said finding of fact, and in our view no substantial question of law is arising from the order of the Tribunal. Dismissed.”
It is evident from the record that the claim of the Assessee
regarding non service of the notice under section 148 of the act and 142 (1)
of the act was duly supported with an affidavit and annexure as placed on
record at APB, Pg. 16. The learned CIT appeal has merely rejected the
submissions of the appellant assessee and its affidavit with one line
observation that assessee did not bring any material on records that the
said notice were not served on him. In our view, the learned CIT appeal
was not justified in summarily rejecting the submissions and contentions of
the appellant assessee which are duly supported with the affidavit and case
laws.
From the above, it is evident that the statutory notice under section
148 of the act has never been served upon the appellant assesse. The
revenue authorities, the AO, the CIT(A) and the Ld. DR has failed to
9 ITA No. 104 /Asr/2021 Harbhajan Kaur v. ITO brought on record any material evidence to controvert the contention of the
appellant. In our considered view, the impugned order suffered legal
infirmities and perversities to the peculiar facts on record which cannot be
approved. Accordingly, we hold that the assumption of jurisdiction u/s 147
of the act, in absence of service of notice under section 148 in invalid and
therefore, the consequent assessment order is held to be illegal and bad in
law. Thus, the ground no. 3 on legal issue, challenging the validity of
assessment on account of non-service of notice u/s 148 of the act is
allowed.
Since, the assesse gets relief on legal ground, the other grounds
on merits are not adjudicated as not pressed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 20.12.2022
Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr/PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned
10 ITA No. 104 /Asr/2021 Harbhajan Kaur v. ITO (5) The Sr. DR, I.T.A.T True Copy By Order