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2015 (10) TMI 1513 - ITAT JAIPUR

2015 (10) TMI 1513 - ITAT JAIPUR - TMI - Reopening of assessment - mode of service of notice - CIT(A) quashed reassessment - Held that:- As the facts emerge the first notice was transmitted by ld. AO through speed post which is not been disputed by the assessee after inspection. It is thus clear that the notice was under transmission by handing over to the postal authority who acted as an agent of the recipient. The speed post notice has been returned mentioning the address as wrong or undeliver .....

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sed over the relevant facts and committed an error in quashing the reassessment proceedings. Consequently the order of ld. CIT(A) quashing the reassessment is quashed - Decided in favour of revenue.

As held in the case of Phool Chand Bajrang Lal (1993 (7) TMI 1 - SUPREME Court), that sufficiency of reasons cannot be gone into by the court at the time of recording of reasons as it is the beginning of the process of reassessment. Assessee attitude was totally non-cooperative in complian .....

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grounds are raised by both the parties as under:- Revenue's ground in ITA No. 83/JP/2013 "Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) was justified in quashing the assessment order passed u/s 147/144 holding that the notice u/s 148 was not validly served upon the assessee." Assessee's ground in C.O. No. 13/JP/2013 "The ld. CIT(A) has erred in law and on fact by dismissing Ground No. 4 to 7 after quashing the assessment order in para .....

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ng of the Department, New Delhi got information that bogus entry operations were being carried out at large scale in Delhi and some of which were attributable at Jaipur. The operators and beneficiaries thereof were identified in which assessee's name was found to have received a sum of ₹ 5,01,000/- vie cheque no. 4490098 dated 13-12-2002 from one Shri Narendra through the bank account No. 24558 with SBBJ, New Rohtak Road, New Delhi. This sum was credited to the assessee's saving ba .....

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date of hearing on 19-10-2010. In response thereto, the ld. AR of the assessee Shri N.K. Shrimal, CA attended the hearing and filed an application for adjournment. The case was adjourned to 29-10-2010. No compliance was made from the assessee. However, on 9-11-2010, the CA of the assessee attended and again filed adjournment application. The case was adjourned to 26-1-2010. No compliance was made on this date as well. The AO again issued query letter dated 26-11-2010 alongwith notice u/s 142(1) .....

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ice u/s 148 was issued in the name of Ms. Shubashri Paniker, F-58, Kailash Marg, Bani Park, Jaipur on 22-03-2010 and sent for service through speed post on 22-03-2010. Inspection of the assessment record were made by your A/R on 30-11-2010 and this fact has also been verified by you A/R. The said notice was also not received back unserved. From the assessment record, it has also been noticed that a notice u/s 142(1) dated 4-10-2010, issued on the same address, fixing the hearing on 19-10-2010, w .....

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, and hence the same is therefore, rejected." Another letter was issued challenging that reasons record were also dealt with by the AO as under:- "3.4 I have gone through the submissions of the assessee. As narrated above, the proceedings u/s 147 read with Section 148 of the I.T. Act, 1961, were initiated after recording valid reasons. The notice u/s 148 of the Act sent through speed post has also been served on the assessee as ITO, Ward- 3 (2), Jaipur vs. Ms. Shubhashri Panicker. 5 th .....

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shwant Singh (212 ITR 650) held that issuance of notice within period of limitation gives jurisdiction to Assessing Officer to proceed to make reassessment. The Hon'ble Delhi High Court in the case of CIT vs. Yamu Industries Ltd. 167 Taxman 67 held that the notice sent by registered post to the correct address of the assessee had not been received back 'unserved' within a period of thirty days of its issuance, there was presumption under law that the said notice had been duly served .....

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omputed as under:- 1. Income estimated for the year as above ₹ 1,20,000/- 2. Income as discussed above in terms of Section 69 of the I.T. Act ₹ 10,00,000/- ₹ 11,20,000/- 3.2 Aggrieved, the assessee preferred first appeal challenging the validity of the assessment proceedings as well merits of the additions. The ld. CIT(A) considering the contentions of the assessee about nonservice of notice of u/s 148 quashed the assessment by following observations. "I find that in the c .....

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ent order. In the case of CIT vs. Yamu Industries Ltd., the Hon'ble Court has upheld the service of notice u/s 143(2) within the period of limitation since the notice had been "correctly addressed" to the assessee and sent by registered post in consonance with the requirement of Section 282(1) of the Act with order V Rule 19A of the CPC. In view of above facts and circumstances of the case, I am of the considered opinion that there is no valid service of notice u/s 148 of the Act a .....

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Jaipur vide ER 017540747 dated 22- 03-2010 was issued and served upon the assessee. The correct address of the assessee is as under:- Ms. Subhashri Panicker F-58, B Kalidas Marg, Bani Park, Jaipur B. The alleged notice sent by ld. Assessing Officer was not a valid notice since the address on the receipt of speed post was not of assessee for the following reasons. (i) The correct prefix to Plot No. 58 is "F" whereas in notice prefix was used as "E". (ii) The suffix to Plot No. .....

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ove, it is clearly stated that notice be sent by Registered Post to the correct address. In the case of assessee notice sent by ld. Assessing Officer was not sent by Registered Post and was also sent erroneously on the address which is not of the and different at three stags as stated above. The notice was sent on incorrect address and Assessing Officer cannot mechanically presume that it was duly served. C. Ld. CIT(A) has correctly held that the ld Assessing Officer has failed to issue and serv .....

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#39;s case. If the reasons are based on wrong assessment then they cannot make a correct foundation for belief. The reason to believe is merely 'some information' from investigation wing and there is no independent application of mind by Assessing Officer before re-opening the case. The Assessing Officer has not applied his independent mind which is evident from following. (i) The reason contents the word "Some inquiries" which implies even the fully inquiry was not completed a .....

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) No enquiry is made by investigation cell with the assessee thereby barring assessee right in hearing. The investigation cell has referred the name without any examination of assessee and without giving an opportunity to be heard. It is submitted that the notice u/s 148/147 of the I.T. Act was without any reason to believe but on the basis of suspicion and some information provided by Investigation Wing and notice based upon such suspicion should be quashed." "Without prejudice to gro .....

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Taxmann. Com 387 (All.) 3.5 The ld. DR on the other hand contends that notices issued u/s 148 and 142(1) were served on the assessee. In response thereto, the ld. AR of the assessee duly appeared from time to time and sought adjournments without raising any grievance about non-service of 148 notice. It is only at the fag end of the assessment by way of an afterthought that story about non-services of the notices u/s 148 was concocted to defeat the statutory process of the assessment. The notice .....

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y served on the assessee and communicated to her CA. From these facts, it is evident that the notice u/s 148 sent through speed post stand duly been served on the assessee in the eyes of law. It has been held by Hon'ble Delhi High Court in the case of CIT vs. Yamu Industries Ltd. (supra), if it is assumed that first notice was not served on the assessee then in second notice if the assessee appeared and did not raise any objection after 30 days of issuance of notice, then and it is a valid p .....

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ment. The AO had valid information in his possession which is placed on the record. It is pleaded that the ld. CIT(A) erred in holding that there is no service of notice and assumption of jurisdiction is invalid. 3.6 Ld. DR relied on the order of the Tribunal in the case of ITO vs. Shri Sarabh (Saurabh) Charan (ITA No.1119/JP/2011 dated 5-12-2014) holding as under:- "7. We have heard the rival contentions of both the parties and perused the material available on the record. By affixture not .....

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and it otherwise deemed to have been waived. The Hon'ble Court further held that for A.Y. 2007-08 even notice issued and served within one year from the end of the date of return is valid notice U/s 143(2)(ii) of the Act. In another case, the Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Jasbir Singh NRI through Shri Jarnail Singh, POA in ITA No. 253 of 2012 (O&M) order dated 21/2/2012 has held that notice issue on the last known address is valid service. It is furt .....

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edural lapse, the assessee should not be a gainer and that too by default to escape his liability. Squally, order of the Tribunal also lacks merit. The case law cited by the learned DR i.e. V.R.A. Cotton Mills P. Ltd. Vs. Union of India (supra) is squarely application on the assessee's case wherein it has been held that prescribed time limit for notice, the expression "serve" and "issue" are interchangeable, as has been noticed in Section 27 of the General Clauses Act, 18 .....

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de the order of the learned CIT(A) and directed to frame the order as per law after providing reasonable opportunity of being heard to both the parties." The Hon'ble Delhi High Court decision in the case of M/s. Yamu Industries Ltd. (supra) is as under:- "15. So, the provisions of Section 282 of the Act with regard to the service of notice have been duly complied with by the Revenue. Since the notice u/s 143(2) of the Act sent by the registered post had not been received back [unse .....

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this finding of the Tribunal that no notice u/s 143(2) of the Act has been served within the prescribed period is liable to be set aside. 18. As such, the present appeal filed by the Revenue is accepted and the impugned order passed by the Tribunal is set aside and consequently, the order quashing the assessment for the period in question is also set aside. It is pleaded that Bani Park is a posh area of Jaipur with resident who are well known. A minor typographical error in the road or mentioni .....

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ave heard the rival contentions and perused the materials available on record, as the facts emerge the first notice was transmitted by ld. AO through speed post which is not been disputed by the assessee after inspection. It is thus clear that the notice was under transmission by handing over to the postal authority who acted as an agent of the recipient. The speed post notice has been returned mentioning the address as wrong or undelivered which is a standard practice of the postal Department. .....

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