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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI SAKTIJIT DEY, & SHRI N.K. BILLAIYA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the Revenue is preferred against the order of the ld. CIT(A) – 1 New Delhi dated 27.06.2016 pertaining to A.Y. 2008-09.
The grievances of the Revenue read as under:
“1. (i) Ld. CIT (A) erred in law and on facts in treating intimation u/s “143(1) as "non-est" and in cancelling consequent demand raised while processing the return on 27.03.2010.
(ii) Ld. CIT (A) exceeded his jurisdiction in entertaining appeal against intimation where no adjustment of income was carried out resulting in demand.
(iii) Ld. CIT(A) erred in cancelling the demand raised on the basis of book profit u/s 115JB as disclosed in the schedule 7 of return of the return of income for A.Y. 2008-09.”
2. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”
Briefly stated, the facts of the case are that the assessee filed its return of income u/s 139(1) of the Income-tax Act, 1961 [the Act, for short] on 21.09.2008 declaring income of Rs. 7,45,029/-. Return was allegedly processed by the CPC, Bangalore but intimation was never served upon the assessee.
When the return for A.Y 2014-15 was processed, a notice u/s 245 of the Act was sent to the assessee and the assessee came to know about the intimation for A.Y 2008-09. As the intimation u/s 143(1) of the Act was never communicated to the assessee, the assessee claimed that adjustment made by the department u/s 143(1) of the Act becomes non-est and legally not sustainable.
Strong reliance was placed on the decision of the Hon'ble Delhi High Court in reference to Writ Petition [Civil] 2659/2012. The contention of the assessee was dismissed by the Assessing Officer but accepted by the ld. CIT(A). Hence, the Revenue is in appeal before us.
The ld. DR placed strong reliance on the order dated 17.07.2015 and referring to the computation sheet, the ld. DR vehemently stated that the assessee has fraudulently claimed the tax credit and, therefore, is not covered by the decision of the Hon'ble Jurisdictional High Court of Delhi in WP(C) 2659/2012.
Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authorities.
We have given careful consideration to the orders of the authorities below. The entire quarrel revolves around the following findings of the Hon'ble High Court of Delhi – Court on its Own Motion in WP(C) 2659/2012 which reads as under:
“34. The onus to show that the order was communicated and was served on the assessee is on the Revenue and not upon the assessee. We may note in case an order under Section 143(1) is not communicated or served on the assessee, the return as declared/filed is treated as deemed intimation and an order under Section 143(1). Therefore, if an assessee does not receive or is not communicated an order under Section 143(1), he will never know that some adjustments on account of rejection of TDS or tax paid has been made. While deciding applications under Section 154, or passing an order under Section 245, the Assessing Officers are required to know and follow the said principle. Of course, while deciding application under Section 154 or 245 or otherwise, if the Assessing Officer comes to the conclusion and records a finding that TDS or tax credit had been fraudulently claimed he will be entitled to take action as per law and deny the fraudulent claim of TDS etc. The Assessing Officer, therefore, has to make a distinction between fraudulent claims and claims which have been rejected on ground of technicalities but there is no communication to the assessee of the order/intimation under Section 143(1). In the later cases, the Assessing Officer cannot turn around and enforce the demand created by excommunicated order/intimation under Section 143(1). This is the fifth mandamus which we have issued.”
From the perusal of the above, the onus is on the Revenue to show that the TDS or tax credit had been fraudulently claimed by the assessee.
Facts on record show that the Revenue has grossly failed in showing that the intimation u/s 143(1) of the Act ever served upon the assessee as the Revenue failed to give any proof of service of such intimation to the assessee. Therefore, intimation u/s 143(1) of the Act has to be treated as non-est or invalid.
Now coming to the observations of the Hon'ble High Court, again the onus is on the Revenue to show that the claim of TDS is fraudulent.
A perusal of the computation sheet shows that inadvertently the assessee has mentioned the tax payable at normal rates at Sl. No. 3 instead of tax payable of deemed total income u/s 115JB of the Act.
In our considered opinion, this by any stretch of imagination, cannot be considered as fraudulent activity of the assessee to deny the benefit of the decision of the Hon'ble Jurisdictional High Court of Delhi [supra].
Considering the facts of the case in totality, we decline to interfere with the findings of the ld. CIT(A).
In the result, the appeal of the Revenue in is dismissed.
The order is pronounced in the open court on 21.12.2023.