TMI Blog2019 (5) TMI 1538X X X X Extracts X X X X X X X X Extracts X X X X ..... , a particular course of action. The second reason is that the said course whatever be its merits, is, without doubt, only as per the advice of the assessee s legal counsel. The same should not therefore operate to the detriment of the assessee (refer: Concord of India Insurance Co. Ltd. v. Nirmala Devi and Ors . [ 1979 (4) TMI 29 - SUPREME COURT] . The appeal was accordingly admitted, and the hearing in the matter proceeded with. Reopening of assessment u/s 147 - as urged notice u/s. 133(6), 147/148 and notice u/s. 142(1), 143(2) and Assessment Order were never validly served on the assessee - HELD THAT:- Referring to the issue of service of notice u/s. 148(1), a question of fact, the same assumes relevance as, in its absence, the matter would necessarily have to travel back to the file of the AO to enable him to provide opportunity to the assessee to join the proceedings and state his case, and frame the assessment accordingly per a speaking order. In this regard, the Revenue, on its part, has also not shown that the address at which the said notice was sent was the assessee s current address at the relevant time, the date of its issue, i.e., as per its record. The same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not be required to raise this issue in further appeal, which would then be restricted, as is the case, only to the legal ground/s, also raised in first appeal. The ld. CIT(A) disposed the assessee s application vide order dated 30.5.2016, which was received in the first week of July, 2016, and the instant appeal, assuming only the legal ground/s, filed on 29.8.2016, i.e., within 60 days of the receipt of the order u/s. 154 dated 30.5.2016. This, therefore, it was averred by him, constituted a reasonable ground for the delay. The ld. Departmental Representative (DR), Sh. Charan Dass, would object. The assessee s grievance with the impugned order is in respect of the legal grounds challenging the assessment. As such, the same could be preferred independent of the rectification application which was in respect of the quantification of the addition made, being, rather, as contended, in view of a mistake apparent from record, i.e., the extent of the actual payment made by the assessee during the relevant year toward the purchase price of the shop acquired by him during the year. The assessee had, he continued, it was apparent, accepted the order of the first appellate authority, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the addition, all that he was required to do was to raise a grievance qua the non-adjudication of Gd. 10 of the appeal by the first appellate authority. If, therefore, the assessee, as a matter of strategy thought it fit to seek rectification a separate matter altogether entailing only a mistake/s apparent from record, it cannot be said that there was sufficient cause for the three month delay in filing the appeal. Why, for all we know, the said rectification application may have remained undisposed by the ld. CIT(A) for months, as in fact is usually the case. The assessee s explanation defeats his case in-as-much as it clarifies that the reason for the delayed filing of the appeal before the tribunal, rather than extraneous, beyond the assessee s control, was on account of a deliberate thought of action plan by him. That the filing of appeal was an after-thought, i.e., after obtaining the section 154 order from the ld. CIT(A), as apprehended by the ld. DR, also cannot be ruled out. Be that as it may, I am inclined to admit the appeal. The reason is two-fold. The explanation, whatever its merits, is bona fide . The ld. CIT(A) was appealed both on the legal g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 14.20 lacs, is unexplained. The assessee had in fact, filed his return of income for the year on 26/5/2004. How could, then, he would argue, the AO have a reason to believe that the impugned sum had not been disclosed, i.e., without reference to the assessee s return, and had therefore escaped assessment? A perusal of the assessment order, stating the reasons recorded u/s. 148(2), shows that the AO, prior to forming his belief as to the escapement of income, sought information from the assessee u/s. 133(6) of the Act, including about the filing of the return for the relevant year. The same being not responded to, he inferred the assessee to have not filed any return of income for the year. The said notice u/s. 133(6), Sh. Bahl would explain, was not received by the assessee, who had since left the said address. Toward this, he would point to the assessee s return for the subsequent years, beginning AY 2005-06, filed with the same Range (Range-V, Amritsar). In fact, even the return for AY 2004-05, the relevant year, was filed stating the same address, different from that on which the notice u/s. 133(6) was sent by the AO. His attention was at this stage was draw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othing to show that the address at which these notices were sent is no longer the assessee s address, i.e., of he having left it, with nothing to that effect brought on record even at the appellate stage. For all one may know, the said address may be the assessee s address as per the return for AY 2003-04, the immediately preceding year. The claim of the assessee of having left that address long ago, as claimed, cannot therefore be accepted and, accordingly, the ld. CIT(A) cannot be said to have faulted in this regard. The question of the validity of the service apart, it is, however, clear that the assessee did not receive the notice u/s. 133(6) or the subsequent notice u/s. 148(1). The assessee has also not intimated the change in his address, i.e., from that as stated in his PAN, as required u/s. 139A(5)(d); he having shifted his residence to 82B, GF, Ranjit Avenue, Amritsar in December, 2008 (PB pgs. 20-21), so that a notice at the address stated in the PAN would also not have been received by the assessee. The question, however, is, would the assessee be better placed than he is now had he had received the said notices ? The allotment of the shop, which is by Amritsar Improve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he service of the notices by the assessees whose income had escaped assessment. Here one cannot help but refer to the similar sentiment expressed by the Hon ble jurisdictional High Court in Jasbir Singh (infra) and V.R.A. Cotton Mills (P.) Ltd. v. Union of India [2013] 359 ITR 495 (P H). Both the Hon ble jurisdictional and the Patna High Court dissented from the decision in Shanabhai P. Patel v. Upadhyaya [1974] 96 ITR 141 (Guj), which was subsequently reversed by the Apex Court. Service under the Act (referred to as a new Act), it held, is not a condition precedent to confer jurisdiction to the Income-Tax Officer (ITO), though is one for making the order of assessment. This would also meet the assessee s reliance on CIT v. Ramendra Nath Ghosh [1971] 82 ITR 888 (SC). 4.4 It was at this stage enquired with the assessee s counsel, Sh. Bahl, as to the prejudice, if any, caused to the assessee on account of the non-service of the aforesaid notices. The reason is simple. The function of a notice is to put the noticee to notice that the proceedings in his case have been initiated, affording him an opportunity to comply with the said notice as well as to present hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant opportunity to the assessee to state his case. Sh. Bahl would answer in the negative. This is understandable as the assessee has already availed sufficient opportunity to explain his case, with, in fact, the addition restricted to the amount admittedly paid during the current year (₹ 2.70 lacs), which aspect of assessment, i.e., addition on quantum as sustained, has not even been agitated in appeal. Restoration, entail as it does time and effort, is not an empty formality, and must achieve some substantive purpose. Reference in this context may also be made to the decision in CIT v. Jasbir Singh [2014] 103 DTR 427 (P H), referred to by the ld. Sr. DR during hearing. In the facts of that case, the AO could not get the current residential address of the assessee and, accordingly, the notice was served through affixture at the Dharmshala of the village, which had, on account of the acquisition of the village land by PUDA, been converted into a residential colony. The assessment was, accordingly, framed u/s. 144 in view of the non representation by the assessee. The matter was in appeal set aside to the AO for framing the assessment afresh after hearing th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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