TMI Blog2015 (6) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... , is also devoid of merit as receipt of sanction by A.O. on 01.06.2001 by post does not mean that A.O. was not conveyed sanction telephonically or otherwise. Thus notice u/s 148 has been rightly served upon the assessee - Decided against assessee. It has been established that NRE account of donor Shri Subhash Sethi was being used for the purpose of making bogus gifts as the alleged donor has himself stated before Enforcement Directorate that he had not made any gift to any person in India out of his said NRE account as he has not remitted any money from abroad into this account. As noted by Ld. CIT(A) a letter dated 07.08.1995 written by alleged donor Shri Subhash Sethi denying any gift to any person in India finds mention in the order of Enforcement Directorate dated 27.06.2002. We further find that in the case of brother of assessee, Shri Ved Prakash Chug, similar addition has been made and was confirmed by Ld. CIT(A) vide his order dated 01.08.2003. As per the statement of Ld. A.R., he was not aware of the status of any appeal filed by Shri Ved Prakash Chug before the Tribunal wherein Ld. D.R. categorically stated that the issue had attained finality in that case as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns u/s 131 of the Act and in response to which assessee was represented by one Shri Ashok Kumar and assessee was required to furnish the following information:- 1. On perusal of record it is noticed that you have received a gift of ₹ 10 lacs from one Sh: Subhash Chander of Delhi during the F.r. 1993-94 relevant to the A.Y. 1994-95. You are requested to produce Sh: Subhash Chander along with documentary evident regarding the capacity to make the gift as claimed by you. Please also intimate what relations you have with Sh: Subhash Chander and also inform the occasion on which the same was received by you. 2. You are a/so requested to give copies of your account from the different firms in which you have deposited the amount/you are having interest in those firms relevant to the A. Y. 1994-95. 3. Prove the reasonableness of household expenses with reference to the size of family and standard of living. 4. Produce post office/Bank pass books and other books of account if any maintained by you. 5. Give the details of movable/immovable properties owned by you during this period along with date of purchase and source of investment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /61/JC/02/SPS elated 27-6-2002 and file No. T- 4173/JIJ200213086, no favour has been made for assessee as alleged. The assessee could not produce the donor for examination. Moreover, could not establish that the gift had been shown in the return of income. There is no force in the version that the set of documents being given now was appended with return as no acknowledgment of filing of return has been so furnished. The assessee even could not give the GIR No. Allotted to the assessee for that asstt. Year. It is the onus of the assessee that he has filed any return of income for that asstt. Year. The assessee stated that genuineness of gift is not in doubt and identity of donor is sought to be established through his confirmation to the donee. The donor is stated to be a distant relation of father of assessee. One time the assessee is trying to float a bond of relationship between donor and himself (although without any basis or stretch of imagination) and on the other hand state that relationship and occasion of gift is not required for having and receiving any gift The gift has been claimed to be genuine on reasons :- (i) Existence of Subhash Sethi proved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee was confronted vide letter dated 17-2-2003 that notice u/s 148 was duly served and was legally in nature as per provisions of Income Tax Act. to produce the donor and registered documents of Sift and affidavit, bank pass book and prove the filing of return/of income of donor. and assessee was also asked to file a copy of return stated to have been filed earlier along with its annexures, books of accounts and bank pass books relevant to F.Y. 1993-94 and to justify household withdrawals. Incompliance to it, the assessee filed reply dated 10-3-2003 vide which nothing was added to the reply filed earlier and almost reiterated the reply filed on 13-2-2003. When the assessee could not produce the donor for examination he was asked to give his address of India. The address was given Subhash Sethi s/o Sh. Tara Chand Sethi, 84, Sunder Nagar, New Delhi. Summons u/s. 131 of IT Act was issued to the donor through registered post on 24-2-2003 which returned back on 5-3)003 with the remarks No such person in 84, Sunder Nagar . Although, the assessee was confronted on the issue but he could not be satisfactory answer and only stated that this was the latest avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee and upheld the addition and rather increased the amount of addition by an amount of ₹ 75,140/- by holding as under: The matter has been considered. It is seen that the AO allowed more than sufficient opportunity to the appellant to prove the genuineness of the alleged gift but the apparent could neither produce Shri Subash Sethi before the A.O. for verification of the gift nor could file any other document/evidence in support of his claim. Even the summons u/s '131 could not be served upon Sh. Subhash Sethi on The address given by the appellant. The appellant could also not establish as to what was the relationship of the donor with the appellant and as to what was the occasion on which the gift was alleged to have been given, The AO, on the other hand, has pointed out that under similar facts and circumstances and for the same asstt. year an addition of Rs. 11,50,000/- comprising of bogus gift of ₹ 10 lacs and premium of ₹ 1,50,0001- made by the ITO, Ward 25(3), New Delhi in the case of Sh. Ved Prakash Chugh, brother of the appellant, has been confirmed by the CIT(A), X.XIV, New Delhi vide his order dated 01.08.2003. The CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the above, income of the appellant is enhanced to ₹ 11,75,140/- and the AO is directed to tax the same as per the tax rates applicable for the year under appeal. 7. Aggrieved, the assessee is in appeal before us. 8. Ld. A.R. at the outset invited our attention to synopsis filed by him and also submitted that he will be making reference to the paper book filed by revenue. Ld. A.R. further submitted that grounds no.1, 2 6 relate to legal issue of which is agitated by appellant on various counts. He submitted that service of notice u/s 148 was not according to law contained in order V Rule 20 of CPC and in this respect, he invited our attention to paper book page 20 of Revenue s paper book where a copy of notice dated 29.05.2001 was placed. Inviting our attention to the date of notice, Ld. A.R. submitted that at the back of notice dated 29.05.2001 the inspector had mentioned that he had made various repeated visits to serve the notice but the notice could not be served as the assessee had gone out. Ld. A.R. submitted that on the same date i.e. on 29.05.2001, the inspector was authorized to serve the notice by affixture and invited our attention to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that reopening itself was bad in law as the action u/s 148 was approved on 29.05.2001 and was alleged to have been served by A.O. on 31.05.2001, whereas the A.O. received the sanction for issue of notice on 01.06.2001 as is apparent from paper book page 22. Ld. A.R. further argued that the reasons recorded as contained in Revenue s paper book page 17 do not contain any material to show nexus with the firm belief that some income had escaped assessment. He submitted that reasons were recorded on the basis of some report received from ADIT of Investigation wing carried out by ADIT, Ghaziabad. He submitted that entire reasons revealed that there was no material to indicate that there was escapement of appellant s income. He submitted that reasons recorded are quite vague and cannot be the basis for reopening of assessment. He submitted that the reasons recorded indicate that there was no application of mind as the same were based on the basis of report received from ADIT and there is no application of mind by A.O. Ld. A.R. submitted that Hon'ble Supreme Court in the case of M/s. Ganga Saran Sons (P) Ltd. Vs ITO reported at 130 ITR 01 had said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges 16-24 is copy of passport of donor and paper book 13 is certificate from bank certifying that the amount was out of NRE account of donor. In view of above documents, Ld. A.R. Submitted that the assessee had furnished all the documents demonstrating the gift was a genuine gift and was received through banking channel from a NRE account of a donor who happened to be a relative. Ld. A.R. took us to paper book pages 36-40, 57-63 wherein copy of detailed submissions made before A.O. and Ld. CIT(A) were placed. Therefore he argued that on merits also, the assessee has a strong case and the gift is liable to be accepted. 13. Ld. D.R. on the other hand submitted that though the A.O. seems to have received the permission from higher authorities on 01.06.2001 through letter but the fact remains that A.O. must have obtained verbal permission through telephone or by hand and formal permission was received afterwards and, therefore, it cannot be said that the notice u/s 148 was issued before the approval was obtained. In respect of service of notice, Ld. CIT(A) had remanded back this issue to A.O. and had obtained remand report and then decided the issue after recording ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings in the case of Shri Ved Prakash Chug Ld. A.R. stated that he was not aware regarding the case of Shri Ved Prakash Chug. However, Ld. D.R. stated that in that case Ld. CIT(A) has upheld the action of A.O. and assessee has not challenged the action of Ld. CIT(A) and therefore, the proceedings in that case had attained finality. 16. We have heard the parties and have gone through the material placed on record. As regards legal grounds taken by assessee regarding service of notice u/s 148, we find that Ld. CIT(A) after obtaining remand report from A.O. has passed a detailed and exhaustive order. The relevant findings of Ld . CIT(A) are reproduced below: Regarding the service of notice, it has been claimed that n notice was served jupon the appellant on 31st of May 2001. It has been argued that it was the duty of the revenue to establish that the service of a notice was made on the appellant itself or on someone duly authorized by him in that behalf. The Ld. A.R. further argued that the impugned notice u/s 148 was issued on the last date of limitation, which could not have, in any case, been served on the appellant 011 the same very day. Accordingly, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) This letter was duly received in the Income-tax office, (Sonipat on 20.5.2001. iii) On the basis of the direction the AO has allegedly sent the reasons for reopening the proceedings u/s 148 strongly on 25.5.2004 itself. iv) These reasons were approved by the Addl. Commissioner of I. Tax, Rohtak Range, Rohtak vide his office letter No. 672 dt. 29.5.2001 which is received by the AO allegedly on 31.5.2001. v) Sir, one more important fact which need your kind consideration that the stamp of the receiving office was of dt. 1.6.2001. vi) The AO has received the prior approval on 31.5.2001 or on 1.6.2001 whereas notice u/s 148 was issued on 29.5.2001. vii) The notice server has reported on 29.5.2001 itself that assessee was not available at his residence after repeated visits by tile notice server. Sir, your Honour will agree that there is no law in India, which requires the assessee to be present at his known address all time to facilitate the service of notice by the I. T Department on any date convenient to the department officials. viii) The AO i.e. the DCIT, lnv. Circle, Panipat passed the order under Rule 20 of order V o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Department that assessee along with his brother had taken bogus gifts therefore, this reason itself is sufficient to ascertain the correct facts. At the time of issuance of notice, the A.O. only needs a prima facie view that some income had escaped assessment. 18.1 As regards the argument of Ld. A.R. that the Revenue had not made necessary efforts to serve notice in the ordinary course before taking resort to notice by affixture, we find that notice server has clearly submitted a report that notice could not be served despite various visits. It is not required to note down time and date of visit on every visit. If he submits a report regarding non service of notice, it is a sufficient compliance for making alternative arrangement of serving the notice. 18.2. The other argument of Ld. A.R. that notice was issued before sanction, is also devoid of merit as receipt of sanction by A.O. on 01.06.2001 by post does not mean that A.O. was not conveyed sanction telephonically or otherwise. 18.3 In view of the above we are of the considered view that notice u/s 148 has been rightly served upon the assessee and, therefore, grounds No.1, 2 and 7 are dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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