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Tulsi Tracom Private Limited Versus Commissioner of Income Tax – 9

2017 (9) TMI 1041 - DELHI HIGH COURT

Revision u/s 263 - validity of notice - notice issued on wrong address - Held that:- Held that:- The notice having been given initially at the wrong address and thereafter posted to the correct address just two days prior to the said hearing and the said notice also having been returned unserved due to the reasons which are not decipherable, the requirement under Section 263 (1) of the Act is not satisfied. In Chandra Agencies (2010 (10) TMI 849 - Delhi High Court ) this Court has gone to the ex .....

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s passed. Thus, there is an outer limit in the statute under Section 263 which, in the present case, is 31st March, 2013. Since, no useful purpose will be served in giving an opportunity to the Appellant of being heard at this stage, this Court answers question No.1 in the negative i.e. in favour of the Assessee and against the Revenue. - ITA 853/2015 - Dated:- 14-9-2017 - S. MURALIDHAR & PRATHIBA M. SINGH JJ. Appellant Through: Mr. C.S. Aggarwal, Senior Advocate with Mr. Prakash Kumar and M .....

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, 2015, this Court had rejected the preliminary objection raised by the Respondent as regards the maintainability of the appeal on the ground of lack of territorial jurisdiction. The appeal was admitted and the following two questions of law were framed: (i) Did the notice dated 18th March 2013 issued by the Commissioner of Income Tax, Kolkata to the Assessee at the address shown therein satisfy the requirements of Section 263(1) of the Act as regards providing the Assessee an opportunity of bei .....

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initiated under Section 147 of the Act and the assessment order was passed on 10th May, 2010 under Section 143(3)/147 of the Act. According to the Appellant, while passing the assessment order under Sections 143 (3)/147, the Assessing Officer ( AO ) had conducted a detailed inquiry with respect to the Appellant s books of accounts and the share capital contribution from the various shareholders. 4. At the time of filing of the returns for AY 2008-09, the Appellant had its registered office at 2, .....

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-110020 (hereinafter Delhi address'). For AY 2012-13 it filed its return on 25th September, 2012, reflecting this address. 5. On 18th March, 2013, the Respondent issued a show cause notice ( SCN ) under Section 263 of the Act proposing to revise the assessment order dated 10th May, 2010 under Section 143 (3)/147 for AY 2008-09. Pursuant to the said notice, order dated 30th March, 2013 came to be passed by the Commissioner of Income Tax ( CIT ) holding that the assessment order dated 10th May .....

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ta allowed the appeal of the Assessee and held that the Appellant was able to establish the identity and authenticity of the share applicants as also the genuineness of the transaction and deleted the addition of ₹ 4,39,70,000/- made under Section 68 of the Act. This order of the AO dated 29th March 2014 is not subject-matter of this Appeal. 7. Independently of the proceedings before the AO, the Assessee challenged the order dated 30th March 2013 passed by the CIT before the ITAT. The ITAT .....

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t the notice under Section 263 to an incorrect address which resulted in the Appellant not being given an opportunity of being heard on 22nd March, 2013 before the ITO. A copy of the said SCN dated 18th March, 2013 is on record which shows that the same is addressed to the Appellant with the Raja Woodmunt Street address. It is his submission that this address was the old address of the Appellant and the ITO had sufficient knowledge of the shifting of the registered office of the Appellant, in vi .....

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of the company filed by the a' (sic Assessee) is received and placed on filed . According to Mr. Agarwal this noting is deliberately undated as the ITO was well aware of the new registered office of the Appellant. 10. Mr. Aggarwal specifically placed reliance upon CIT vs. Chandra Agencies 10 Taxmann.com 176 (Del) (hereafter Chandra Agencies ) as also Rajesh Kumar vs. DCIT [2006] 287 ITR 91 (SC) and J.T. (India) Exports vs. Union of India [2003] 262 ITR 269 (Del) to submit that since no noti .....

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re was no proper opportunity of hearing afforded to the Assessee. Submissions of the Respondent 12. Mr. Manchanda, Senior Standing Counsel for the Revenue has taken pains to point out to the court that the Revenue had in fact issued the notice to the correct address i.e. the Delhi address of the Appellant. He points to the original file from the ITO, produced in Court, to demonstrate that the notice dated 18th March, 2013 was initially issued to the Appellant at the Raja Woodmunt Street address. .....

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the notice to the Delhi address was returned to the ITO, Kolkata who then proceeded ex-parte and passed the impugned order dated 30th March, 2013. According to Mr. Manchanda, the ITO is left with no option under such circumstances as he has complied with the requirements under Section 263. In fact, according to Mr. Manchanda, no notice needs to be issued under Section 263 as per the judgment of the Hon ble Supreme Court in CIT vs. Amitabh Bachchan [2016] 384 ITR 200 (hereinafter Amitabh Bachcha .....

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on 8th April, 2013, the letter itself is undated. This is a deliberate mischief played by the Assessee who was well aware of the proceedings under Section 263. The fact that the letter is undated and received only on 8th April, 2013, which is subsequent to the order dated 30th March 2013, shows that an incorrect averment is made in the writ petition that the Assessee had informed the ITO of the change of its registered office prior to the order dated 30th March, 2013. Mr. Manchanda, thus submitt .....

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ly or even specifically the grounds on which the exercise is felt necessary. But there is nothing in the section (Section 263) to raise the said notice to the status of a mandatory show-cause notice affecting the initiation of the exercise in the absence thereof or to require the Commissioner of Income-tax to confine himself to the terms of the notice and foreclosing consideration of any other issue or question of fact. This is not the purport of Section 263. Of course, there can be no dispute t .....

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notice under Section 263 of the Act and explain the circumstances as may be considered to be relevant by the Assessee. 16. The short question that, therefore, arises is as to - whether such an opportunity was afforded to the Appellant in the present case? 17. A perusal of the records reveals that the ITO was well aware of the various addresses of the Appellant including the latest address at New Delhi at the time when the notice under Section 263 of the Act dated 18th March, 2013 was to be issue .....

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years old. This shows that the ITO did not do the bare minimum of even perusing the various returns filed by the Assessee prior to the issuance of the notice. 18. From the records produced before us, the submission of Mr. Manchanda is correct to the extent that the notice which was returned to the ITO was reposted to the Delhi address of the Appellant on 20th March, 2013. What needs to be borne in the mind, however, is that the notice was dispatched on 20th March, 2013 to the Delhi address and t .....

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22nd March, 2013 needs no answer as it is obvious that even if the notice had been served, the Assessee did not have adequate time to attend a hearing in Kolkata. Under such circumstances, the CIT recorded in the impugned order dated 30th March, 2013 that it is proceeding ex-parte in the matter. The noting in the impugned order reads: The showcause notice, which was served by post calling for compliance on 22-03-2013. The notice was returned by the postal authority 25.03.2013. This order is ther .....

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notice under Section 263 culminating in the order dated 30th March 2013, was completed hurriedly - in a matter of 10 days even if the date of posting of the notice i.e., 20th March 2013 is included. Thus, the satisfaction of the CIT was misplaced. 21. The ITO, Kolkata could not have expected the Assessee to receive the notice being posted on 20th March, 2013, and attend the hearing on 22nd March, 2013. This Court has no doubt that this does not constitute full opportunity as required by the Sup .....

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