TMI Blog2012 (5) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... and other assesses at vill. Noorpur Dona/Mansoorwal Dona, Distt. Kapurthala, is bad in law and assessments so made are quashed - I.T.A. Nos.190(Asr)/2010, I.I.T.A. Nos.191(Asr)/2010, I.T.A. Nos.192 (Asr)/2010 - - - Dated:- 21-5-2012 - SH. H.S. SIDHU, AND SH. B.P.JAIN, JJ. Appellant By: Sh. Surinder Mahajan, CA Respondent By: Sh. Tarsem Lal, DR ORDER PER BENCH: These three appeals of different assessees, arise from three different orders of the CIT(A), Jalandhar, each dated 28.01.2010 for the assessment year 1999-2000. Since the issues involved in all the appeals are identical, therefore, all the appeals of the assessees are being taken up by this consolidated order. All the assessees in the present appeals have taken identical grounds of appeals, which are reproduced as under: (taken in ITA No.190(Asr)/2010): 1) That the Ld. CIT(A) has grossly misread the most unambiguous directions of the ld. CIT as given in his order u/s 264, on different issues brought before the former, so as to simply reject various material contentions of the assessee. 2) That, at the outset, the ld. CIT(A) misdirected himself in upholding the jurisdiction of ITO, Kapu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on record to establish that the assessee was resident of vill. Mohadipur, Jalandhar since 1947 and not of vill. Mansoorwal Dona, Kapurthala. 12. That without prejudice to above legal grounds, on merits, the ld. CIT(a) grossly erred in holding that the agriculture land acquired by PUDA was a capital asset within the meaning of section 2(14). 13. That the said finding of the ld. CIT(A) is also opposed to the recent decision of Hon ble Jurisdictional High Court in the case of CIT vs. Satinder Pal Singh (2009) 33 DTR (P H) 281. 14. That the orders of the authorities below are against law and facts of the case. 2. The Ld. counsel for the assessee, Sh. Surinder Mahajan, CA filed a petition under Rule 29 of the ITAT Rules, for admission of additional evidence. For the sake of clarity, the said application is reproduced, as under: ITA No.190/Asr/2010 for A.Y. 1999-2000 Jasbir Singh NRI Sub: Petition under rule 29 of ITAT Rules, for filing of additional evidence. Respectfully showeth, That the appellant herein, craves leave to file the following documents, being additional evidence, which he intends to refer to and rely upon, while arguing the above appeal bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Jalandhar, dated 29.08.2007, whereby a new Ward 2(6) was created as new assessee s ward w.e.f. 10.09.1997. This document is of great significance to decide the validity of first notice issue u/s 148 by the ITO Ward 2(6) on 16.05.2000, to appellant being a new assessee, against which return was filed and after verification, the matter was closed. Much later, ITO Kapurthala again issued notice u/s 148 on 21.03.2006 which the assessee disputed as without jurisdiction and also barred by time. However, the CIT(A) has held the notice issued by ITO Ward 2(6) as invalid without taking cognizance of this order of CIT dated 29.08.1997. In fact, this order, though on record with the department, remained untraced and hence could not be relied upon. However, the counsel now engaged to represent before the Bench was aware of existence of this order and hence, the same is now sought to file as additional evidence. Since this document strikes at the jurisdictional issue, it is of prime importance to resolve the controversy brought before the Hon ble Bench. It is therefore humbly prayed that appreciating the submissions made above, the bonafides of the assessee in the matter and to advance the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded available at PB 16 17 are also in the name of the assessee Sh. Jasbir Singh, by ITO, Kapurthala. The reasons for reopening assessment available at PB 18 19 by the ITO Kapurthala-1, are in the name of the assessee. The notice sent by the ITO, Kapurthala to the assessee, which is dated 2.6.2006 was not served on the assessee as per report of the Notice Surveyor available on the said letter PB-20. AT PB-21 22, the ITO, Kapurthala again issued a letter dated 2.6.2006 to the assessee which was not served on the assessee. The report of the Sarpanch of the village Noorpur Dona is on the said letter at PB-22 that Sh. Jasbir Singh S/o Sh. Jit Singh is not residing in village Noorpur Dona alongwith the report of the Municipal Councilor, Kapurthala that Sh. Jasbir Singh S/o Sh. Jit Singh does not reside in village Noorpur Dona. The report of the notice surveyor of the Income Tax Department is also on record, on the notice itself at PB-22 that this man does not reside in this village and therefore notice could not be served. This report was given by the notice server after inquiring from Sarpanch and other people of the said village. The report dated 6.9.2006 of the said notice s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --- Date of completion of assessment 17.11.2006 Income Returned -- Name Designation of A.O. : Sh. Ashok Arora, Income Tax Officer, Kapurthala-1. Who complete the assessment In this case, proceeding u/s 147 were initiated by the AO by issue of a notice u/s 148 with the prior approval of JCIT Range IV, Jalandhar. This noti8ce was sent under Regd. Cover vide dispatch no.2076 dated 21.03.2006. The reasons recorded before issue of the said notice indicate that taxable capital gain of ₹ 1,000,9746/- had escaped assessment in this case for the A.Y. 1999-2000. In this assessment order framed u/s 144 the AO has stated that the assessee received compensation amounting to ₹ 1,04,54,574/- from PUDA against compulsory acquisition of land belonging to the assessee. 2. A perusal of assessment record indicates that the notice u/s 148 issued by the AO has been received back unserved with the postal remarks could not be contracted at home. Hence returned. Thus, the notice issued by the AO u/s 148 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.4. The said Review Note by the CIT, Jalandhar, clearly indicates in para 2 hereinabove, that the notice issued by the AO under section 148 has not been served upon the assessee. No effort has been made by the AO to serve notice u/s 148 by other means i.e. by Affixture etc.Even notice u/s 142(1) could not be served upon the assessee. The notice server had given report that the assessee does not reside in village Noorpur Dona. This fact has been certified by the Sarpanch of the village of Noorpur Dona, Kapurthala. The AO decided to affix notice u/s 142(1) on the main gate of Janjghar/Dharamsala, vill. Noorpur Dona. The aforesaid notice indicates that no attempt has been made by the AO to service notice u/s 148 by affixture. No efforts were made by the AO to find out the actual address of the assessee in the wake of report of the Sarpanch that the assessee does not reside in village Noorpur Dona. A statutory notice is required to be affixed at the last known address of the assessee and not the village Jhanghar/Dharamsala. The compensation has been made by PUDA through cheques. The AO could have attempted by making enquiries from PUDA or from the Bank where the cheques of compensati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them in the assessment order without allowing reasonable opportunity of being heard. No substance in the contention of the assessee with regard to adequate opportunity of being heard was found by the ld. CIT(A) and accordingly he set aside the matter to be made afresh after allowing adequate opportunity of being heard to the assessee and directed the AO to ensure that following contentions are judiciously dealt with: (i) Whether the assessee ever resided in village Noorpur Dona/Mansoorwal Dona and whether the last known address of the assessee could lawfully be determined as the Dharamshala of village Mansoorwala Dona for the purposes of service of notice u/ 148/142(1) of the Income Tax Act. (ii) Whether the land of the assessee qualifies to be termed as an asset within the meaning of section 2(14) of the Act in the light of notification No.9447/F.No.164/3/87-ITA-I dated 06.01.1994. iii) Proper inquiries are made from PUDA Authorities with regard to the person to whom the cheques were issued and from the bank encashing the said cheques/drafts. iv) Proper inquiries are made from the office of ITO Ward IV(2), Range-IV, Jalandhar with regard to the fate of proceedings initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Hon ble Allahabad High Court in the case of CIT vs. Vali Brothers (2005) 282 ITR 149 (All). He accordingly prayed to declare the notice u/s 148 to be bad in law and quash assessment made in the case of present assessee and two other assessees which are having the identical facts, mentioned hereinabove. 7. The Ld. DR, on the other hand, argued that at PB-6, notice has been served upon the assessee Sh. Jasbir Singh S/o S. Jit Singh at vill. Noorpur Dona which is available at assessee s paper book page 6-7 by the Assistant Director of Income Tax (Investigtion-II), Jalandhar. Once the notice has been served on the assessee on this address of Noorur Dona and which has been replied by the assessee and the reply is available at assessee s paper book-7. This proves that the assessee is misleading the Income-tax Department and also further proves that the assessee is living in village Noorpur Dona. It was pointed out by the Ld. DR that when assessment order had reached to the assessee at Noorpur Dona address then how other notices issued by the ITO Kapurthala have not reached to the assessee. Service of assessment order on the assessee at Noorpur Dona address speaks of confus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained finality. The jurisdiction of the assessee after dropping of the jurisdiction of ITO, Ward IV(2), Jalandhar, now vests with the ITO, Kapurthala-I. The judgments relied upon by the Ld. counsel for the assessee are not applicable to the assessee s benefit but for the benefit of the Revenue. As a matter of fact, the assessee intentionally diverted the department to Kapurthala from the beginning so that the Department may not reach Kapurthala at a right address. Therefore, the conduct of the assessee should be taken on record and assessee s appeal be dismissed on legal grounds. 8. The Ld. counsel for the assessee, Sh. Surinder Mahajan, CA, in the rejoinder invited our attention that all the notices by the ITO, Kapurthala alongwith assessment order were taken by Inspection after the assessment was made. The said inspection is available at PB-30 is a matter of record, which cannot be denied by the Revenue. The assessee is a Non Resident Indian and settled in UK for the last more than 20 years. The assessee s only agricultural land is in village Noorpur Dona, District Jalandhar, part of which was acquired by PUDA for which compensation was paid in 1999. As regards service of noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jalandhar, on the Power of Attorney holder, Sh. Jarnail Singh, dated 16.05.2000 for the assessment year1999-2000 at village Dhina, Distt. Jalandhar, the same was served on the assessee. In response to the said notice, the Power of Attorney holder, Sh. Jarnail Singh had filed return of income for the said assessment year 1999-2000 with the ITO Ward 2(6), Jalandhar. The verification in the return of income has been done by Sh. Jarnail Singh, Special Power of Attorney holder is a matter of record at PB-9 alongwith copy of computation of paper book at PB-10. The ITO Ward 2(6) vide notice dated 22.08.2000 available at PB-11 had issued a letter on the Power of Attorney holder Sh. Jarnail Singh that the capital gain on the acquisition of agricultural land situated at village Noorpur Dona, Distt. Kapurthala, has not been declared and to clarify the position. Agaian there was a letter dated 04.12.2003 at PB-12 by ITO IV(2), Jalandhar to Mr. Jarnail Singh, Vill. Dhina, Distt. Jalandhar with regard to the clarification about the compensation for acquisition of the land in vill. Noorpur Dona, Distt. Kapurthala. On 13.01.2004, the Chartered Accountant, Authorised Representative of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. It is also not disputed that the notice server of the Income Tax Department has also given the report that Sh. Jasbir Singh does not reside at the given address of vill. Noorpur Dona, Distt. Kapurthala. There is a report of the Sarpanch and the Municipal Corporation of Kapurthala also that Sh. Jasbir Singh and others do not live at vill. Noorpur Dona/Mansoorwal Dona, Distt. Kapurthala. As regards the affixation of notice at Jhanjghar/Dharamsala in vill. Noorpur Dona, Distt. Kaurthala, the said address is not even the last known address of the assessee. As argued by the ld. counsel for the assessee, Mr. Surinder Mahajan, CA that the copies of the said notices and orders of the assessments were taken by Inspection only, after the assessment was made and the said Inspection is available at PB-30 is a matter of record and it cannot be denied by the revenue. Therefore, the argument made by the Ld. DR that how the notices and orders have been served upon the assessee at vill. Noorpur Dona, Distt. Kapurthala, do not have any value and such arguments have been made for the sake of making the arguments only since no notice u/s 148, 142(1), 133(6) or any order u/s 144 r.w.s. 147 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 264 of the Act. The Ld. CIT kept the issue alive by sending the matter back to the AO for deciding the issue available at PB 3 4 of CIT s order or at PB 41 42 i.e. (i) whether the assessee ever resided in vill. Noorpur Dona/Mansoorwal Dona and whether the last known address of the assessee could lawfully be determined as the Dharamshala of village Mansoorwal Dona for the purposes of service of notice u/s 148/142(1) of the Act, (ii) whether the land of the assessee qualifies to be termed as an asset within the meaning of section 2(14) of the Act, (iii) whether proper inquiries are made from PUDA authorities and ITO Ward IV(2), Jalandhar and about the return filed by the assessee to be taken into account while making the reassessment. Therefore, none of the issues have been decided u/s 264 by the CIT and, therefore, assessee was authorized to agitate such issues in appeal. The reliance placed by the ld. counsel for the assessee on the decision of the ITAT, Hyderabad Bench, in the case of Dr. A Naresh Babu vs. Income Tax Officer, 123 TTJ 836 (supra) supports our views. Therefore, the arguments made by the Ld. DR that the issues have attained finality vide order of CIT u/s 264 of t ..... 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