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2015 (8) TMI 416 - ITAT DELHI

2015 (8) TMI 416 - ITAT DELHI - TMI - Validity of assessment - non serving with mandatory notice u/s 143(2) - CIT(A) held that as considering the difficulties of tax administration by the department and distribution of jurisdiction of the cases to salaries ITO, it is not possible to monitor service of notice 142(1)/143(2) on each case exclusively, thus non service of notice 143(2) is dismissed - Held that:- If what is concluded by the Ld. CIT(A) is correct then there is no legal mandate for the .....

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Even if the view expressed is only an opinion based on the personal misreading of the procedure by the Ld. CIT(A) under a mistaken belief that issuance of notice u/s 143(2) is an empty formality inspite of the legal position on this statutory mandate, then it throws a very public glare on the “serious malaise” which the tax administration can be said to be infected with and in such a situation also we are confident that the Competent Authority in the Department would be equally concerned to addr .....

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al principles the CIT(A) shall decide the Jurisdictional issue and then proceed to decide the appeal on merits if so warranted on facts. - Decided in favour of assessee for statistical purposes. - I.T.A .No.-1377/Del/2013 - Dated:- 7-8-2015 - SMT DIVA SINGH AND SH. J.S.REDDY, JJ. For The Appellant : Sh. Santosh Agarwal, CA For The Respondent : Ms.Y.Kakkar, DR ORDER PER DIVA SINGH, JM By the present appeal filed by the assessee the correctness of the order dated 07.01.2013 of CIT(A)-XXX, New Delh .....

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63/- which was processed u/s 143(1) and subsequently selected for scrutiny through CASS. The subject matter of the dispute is on the issuance of notice u/s 143(2). As per the assessment order para 1, this notice is stated to be sent on 12.08.2009 by registered speed post at the address of the assessee available with the department. Subsequently, notice u/s 142(1) was issued on 22.06.2010. As per para 2 of the assessment order the assessee appeared before the AO on 24.11.2010 and objected that no .....

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rejected the claim of the assessee as an after thought holding as under:- Further, it is important to note here that as per records the assessee s authorized representative has attended the hearings on the following dates 02.07.2010, 23.08.2010, 02.09.2010, 15.09.2010, 22.10.2010 & 19.11.2010 and no where he has raised the issue of non-receipt of notice under Sec.143(2). Only when the show case was issued to him to clarify as to why not the loss under the head house property of ₹ 3.23. .....

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,000/- was made by way of disallowing the claim of House Rent Allowance u/s 10. Accordingly the assessment was completed at an income of ₹ 12,36,000/-. 3. Aggrieved by this, the assessee went in appeal before the CIT(A). The assessee again challenged the proceedings on the ground that notice u/s 143(2) had not been issued. Reliance was placed upon the following decisions so as to canvass that the proceedings for want of issuance of notice u/s 143(2) deserved to be dropped:- (i) CIT vs Vard .....

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es Ltd. [2011] 11 taxmann.com 150 (Delhi); (iv) CIT vs Rajeev Sharma [2002] 192 TAXMAN 1697 (All.); (v) P.Sukumar HUF vs ACIT [2011] 15 taxmann.com 326 (Chennai); (vi) CIT vs H.Gouthamchand [2012] 17 taxmann.com (Kar.); and (vii) DCIT, Central Circle-11, New Delhi vs Mayawati [2010] 42 SOT 59 (Delhi). 4. A perusal of the record shows that the CIT(A) after considering the issue of service of notice dismissed the same by a reasoned order holding as under:- ……………& .....

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The Ld. AR relying upon the finding recorded in the assessment order submitted that in view of the fact that the CIT(A) has not given a positive finding holding that notice u/s 143(2) has been issued the assessment deserves to be quashed. Inviting attention to the decision of the Jurisdictional High Court in the case of CIT vs Lunar Diamonds Ltd. [2006] 281 ITR 1 (Del.) it was his submission that the said prayer is fully supported by this decision of the Jurisdictional High Court. 5.1. Inviting .....

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ch of the dates mentioned by the AO and only when the AO adamantly insisted that the issue would be rejected without dealing with the objections orally conveyed that the objections were put in writing. It was submitted that since his statement at bar is based on personal knowledge thus accepting the statement the proceedings should be quashed. 5.2. Referring to the record it was re-iterated that when the CIT(A) accepts that it is not possible to give a positive finding on the issuance of notice .....

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s been issued on 12.08.2009 at the correct address and it has not come back unserved. In these circumstances, it was her submission that the AO taking note of the fact that the objection was posed only on 21.04.2010 has correctly come to the conclusion that it was an after thought. 6.1. Referring to the impugned order in the context of the arguments made by the Ld. AR, it was her request that the issue may be sent back to the file of the CIT(A) as the findings in the second half of the penultima .....

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ed that the observations made in the order may not be considered as the departmental stand as possibly due to some strange mistaken personal philosophy it may have been included as a justification of the proceedings by the Ld. CIT(A) but the perceived casualness if any in the finding may kindly be considered a personal opinion of the concerned officer and not the departmental stand. It was her firm stand that the duty and responsibility to ensure service of notice is always discharged with due c .....

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e u/s 143(2) has been served or not. Quashing the assessment in the peculiar facts and circumstances, it was submitted, would not meet the ends of justice. The personal thoughts/opinions of the CIT(A) having travelled to the finding, it was submitted, cannot distract from the factual position that as per record the notice u/s 143(2) has been served. The assessment it was submitted on facts cannot be quashed relying upon CIT vs Lunar Diamonds Ltd.(cited supra) as canvassed by the Ld. AR as the sa .....

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ettled legal principles always has the inherent powers to take corrective actions wherever the situation in facts and law warrants such an action. It was her submission that the Tribunal vested with all the inherent powers under the Act to set right what patently and evidently is an error in fact and law may in the facts of the present case exercise the inherent powers. 7. We have heard the rival submissions and considered the material available on record. On a consideration thereof, we find tha .....

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e raised on facts appears to have utilized the opportunity to either express his personal opinion/knowledge or experience of enormity of the difficulties and burden faced by the tax administration in monitoring whether notice to the assessee has been served or not when the tax administration is challenged in the appellate proceedings. The position in law on the service of notice u/s 143(2) is well settled. The issuance of notice u/s 143(2) is mandatory in nature as per settled legal jurisprudenc .....

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essee has not understated the income or has not computed excessive loss or underpaid the tax in any manner setting out clearly the date, time and place for the hearing. Thus in case where on a challenge posed by the taxpayer the Revenue is unable to prove on the basis of record that the service of notice u/s 143(2) of the Act has been affected on the taxpayer then the consequences in law for this error in procedure necessarily follow. The statutory mandate insulates the tax payer in the event th .....

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the inability at the field level of the Department to monitor whether notice u/s 143(2) has been served upon the assessee or not. Either of the conclusions are fraught with grave dangers to the system and required to be addressed at the earliest. 8. However, before we address these issues, we find on facts that before us the Ld. AR has sought for quashing the proceedings relying upon the decision of the Hon ble High Court in the case of CIT vs Lunar Diamonds (cited supra). On a consideration of .....

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on the same. In these circumstances their Lordships concluded that it was doubtful whether the notice at all had been sent to the assessee. In the facts of the present case we find that there is no affidavit of the assessee on record and the evidence on record has not been cared to be addressed by the Ld.CIT(A) in his wisdom. It may not be out of place to refer that Rule 10 of the ITAT Rules, 1963 mandates that where a fact contrary to record is alleged then the Rule mandates that it should be .....

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course of post within 2/3 days by virtue of presumption under section 27 of the General Clauses Act, 1897. In the facts of that case notice had been sent to the address indicated in the return of income dispatched by speed post and had not been received back. In the said background holding that the prayer of the ld. AR in the facts on record is not maintainable, we now propose to address the issues arising from the findings of the First Appellate Authority. 9. In order to invite attention to th .....

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relevant provisions and become well versed with the law on the subject. Any remission on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. (emphasis provided) 10. It need not to be emphasized that it is the issuance of notice u/s 143(2) which empowers the AO to pass an order u/s 143(3) and in case the AO is unable to ensure the service of the said notice then relying upon the principles settled by the Apex Court in the case of Parsuram .....

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istry to mark this specific order for consideration of the Chairman, CBDT who may consider taking appropriate corrective actions at the least that the concerned officers who administer the law not only know the law but also respect the law as appointment of unsuitable persons to these sensitive positions seriously undermines the faith in the capability and fairness of the tax administration which should always remain beyond reproach. If what is concluded by the Ld. CIT(A) is correct then there i .....

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