TMI Blog2023 (3) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... ut complying the mandatory provisions of Sec. 143(2) - Decided in favour of assessee. - I.T.A. No. 304/DEL/2020 - - - Dated:- 16-3-2023 - SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER For the Assessee : Shri Suresh Gupta, CA For the Department : Ms. Beenu, Sr. DR ORDER PER YOGESH KUMAR U.S., JM This appeal is filed by the assessee against the order dated 13.11.2019 of the ld. Commissioner of Income Tax (Appeals)-24, [(hereinafter referred to CIT (Appeals)] New Delhi, for assessment year 2014-15. 2. The assessee has raised the following grounds of appeal read as follows: - 1. That the assessment order passed on 22.03.2016 which upheld by the Ld. CIT(A) on 13.11.2019 was perverse to the law and to the facts of the case because of making illegal and impugned additions of Rs.66,32,210/- in the income of the appellant u/s 68 of the Income Tax Act 1961 is illegal as not tenable because the appellant has completely discharged his burden about its identity, creditworthiness and genuineness thereof about the receipt/credit of Rs.66,32,210/- by way of filing all the confirmation alongwith the copy of the ITR and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciate while passing the appellate order. 6. That the order passed was further suffers from infirmity as laconic and ironic in nature, while making the illegal and impugned additions of Rs.66,32,210/- in the income of the appellant only on the basis of presumption and guess work without the support of any material having nexus to hold the same as unexplained income of the appellant, which charged to tax against the law and to the facts of the case. 7. That the assessing officer and by the Ld. CIT(A) has failed to appreciate that once the source and size of agricultural income earned and declared have been accepted as correct by the department in the hands of P. Mahalingam HUF for the Assessment Year 2014-15 itself, therefore, the sources of its receipts in the hands of appellant cannot be doubted being one of the coparcener and as such could not be charged to tax under the law and to the facts of the case. 8. That the orders passed further suffers from infirmity as such laconic in nature because the additions have been made of Rs.66,32,210/- in the income of the appellant only on the basis of his presumption guess work and not on the basis of any material either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt/credit of Rs.66,32,210/- which was charged to tax wrongly against the law and to the facts of the case, would not satisfy the test of natural justice and will amount to breach of law and natural justice. 15. That the order passed was further incorrect under the law and to the facts of the case, because the Assessing Officer has travelled his jurisdiction beyond the powers conferred upon to him under the law and procedure laid down in the Income Tax Act 1961, because prior to doubt about the receipt/credit of Rs.66,32,210/-, he was not having any material either collected or ever placed upon records, having any nexus to its disallowance thereof and charging to tax. 16. That charging of interest under Section 234B and initiating penalty proceedings u/s 271(1)(c) are further wrong as against the law and to the facts of the case. 17. That the appellant assails her right to amend, alter or change any grounds of appeal at any time even during the course of hearing of this instant appeal. The assessee has raised the following additional grounds of appeal read as follows: - 1. The impugned assessment is invalid and without jurisdiction as the said asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment on the basis of such notice is not tenable under law. The ld. Counsel further submitted that the very same additional grounds have been raised by the son of the assessee Shri Santosh Mahalingam before this Tribunal in ITA No. 283/2020 and the coordinate bench of the Tribunal vide order dated 03.08.2022 allowed the appeal of the assessee. Therefore, the assessee craves to follow the principle of consistency and prayed for allowing the appeal. 7. On the other hand, the Ld. DR by relying on the orders of the lower authorities submitted that the order of the CIT(A) requires no interference and sought for dismissal of the appeal. 8. We have heard the parties and perused the material on record. It is not in dispute that the first notice u/s 143(2) of the Act along with 142(1) was issued on 29.09.2015 requiring the assessee to file return of income. The second notice dated 26.10.2015 was issued u/s 143(2) when the return of income was submitted vide acknowledgement dated 26.10.2015. Thus, the AO has not applied the mind in issuing notice u/s 143(2) of the Act, further assuming jurisdiction to frame assessment based on such notice is not tenable under law. 9. In the iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendra Jain and it was reported by Investigation Wing to the AO that they were engaged in business of providing accommodation entries allegedly through certain companies. On the basis of said Investigation Wing information, reopening was made u/s 148 of the Act by the AO vide notice u/s 148 of the Act dated 28.03.2016. In response to the same, admittedly return was filed by letter dated 27.04.2016 which is specifically acknowledged by AO in assessment order at Para 2 of the assessment order. Notably, said return is expressly accepted by AO as valid return for purposes of assessment u/s 148 of the Act. As mentioned in assessment order itself when the said return was taken on order sheet by AO vide order sheet entry dated 27.04.2016, at same time, notice u/s 143(2) of the Act was issued on very same date that is 27.04.2016 which is one of the major issue on which validity of the assessment is challenged before us. Copy of this return and notice u/s 143(2) of the Act dated 27.04.2016 are placed on records before us. We further note that AO supplied the reasons recorded (without approval) to assessee (as placed in paper book before us) which were objected before the AO in detailed mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors of those share holder companies. For mere non production of said shareholders without anything more, as evident from pages 6 12 even though summon issued u/s 131 have been accepted to be served on them in the assessment order adverse inference u/ s 68 of the Act is drawn by AO to make addition ofRs 185,00,000 which is impugned here before us. In first appeal, before Ld CIT(A) confirmed the order of the AO has rejected assessee s detailed submissions challenging reopening action u/s 148 of the Act and while confirming the addition made by AO it is very glaring from Id CIT(A) s order page 16 that primary reason which has weighed on him to confirm said addition is mere non production of share holder companies directors in person. In this background, the assessee is before us challenging the orders of the authorities below. 7.1 At the outset Ld counsel for the assessee has drawn our attention to the additional ground application filed before us in terms of Rule 11 of ITAT rules. In said additional ground application it is stated as under: Quote Additional ground of Appeal That impugned assessment order passed by Ld. Asses sing officer u/s 147/143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be served has been duly served upon him in accordance with the provisions of the Act and the Assessee in those circumstances would be precluded from objecting that a notice that was required to be served upon him under the Act was not served upon him or not served in time or was served in an improper manner. It was held that Section 292BB of the Act is a rule of evidence and it has nothing to do with the mandatory requirement of giving a notice and especially a notice under Section 143(2) of the Act which is a notice giving jurisdiction to the AO to frame an assessment. The decision of the Allahabad High Court in Manish Prakash Gupta v. Commissioner of Income Tax (supra) is also to the same effect. 7.3 While arguing on above additional ground application, Ld. counsel for the assessee has drawn our attention to written submission filed in paper book of 218 pages (from page 1 to 27) that as noted in impugned assessment order at pages 5 6 that notice u/s 143(2) of the Act was issued on 27/04/2016 on return submitted u/s 148 of the Act vide order sheet entry dated 27/04/2016, (copy of return u/s 148 letter dated 27.04.2016 and notice u/s 143(2) dated 27/04/2016 are at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ications only after consideration that such modifications have become necessary. The word necessary means indispensable, requisite; indispensably requisite, useful, incidental or conducive; essential; unavoidable; impossible to be otherwise; not to be avoided; inevitable. The word necessary must be construed in the connection in which it is used. (See- Advanced Law Lexicon, 3rd Edition, 2005; P. Ramanatha Aiyar) 26. The formation of the opinion by the State Government should reflect intense application of mind with reference to the material available on record that it had become necessary to propose substantial modifications to the draft development plan. 7.4 Ld. Counsel for the assessee also stated that there is no application of mind in present case what to speak of intense application of mind where notice u/s 143(2) is ostensibly prepared before hand or hand in hand at same time when return u/s 148 is filed on 27/04/2016, hence, he requested to quash the assessment. 7.5 On careful consideration of the entire conspectus of the case, as per Hon ble Supreme court ruling in case of National Thermal Power Corporation Ltd Vs CIT [(1998) 229 ITR 383 SC)[, we admit th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt for the first time. The appellant has stated that the return was filed by the assessee on 27th March, 2000 and the notice under s. 143(2) was served upon the Authorized Representative of the assessee by hand when the Authorized Representative of the assessee came and filed return. However, the date of the notice was mistakenly mentioned as 23rd March, 2000. Assuming the aforesaid to be true, the notice was served on the Authorized Representative simultaneously on his filing the return which clearly indicates that the notice was ready even prior to the filing of the return. The provisions of s. 143(2) make it dear that the notice can only be served after the AO has examined the return filed by the assessee. Whereas it is dear that when the assessee came to file the return, the notice under s. 143(2) was served upon the Authorized Representative by hand. Thus, it would amount to gross violation of the scheme of s. 143(2). 5.1. And the conclusion is as under : .Assessment made in pursuance of a notice under section 143(2) issued on 23rd March, 2000 when the return was filed on 27th March, 2000 is invalid. 6. He has submitted that the same order have been followed by ITAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s 143(2) of the Act is issued which words have been explained by Hon ble Apex court in case of Bhikubhai Patel vs State of Gujarat (4 SCC 144) relevant extract of which is reproduced above where it is observed by Hon ble Apex court that ...The expression: so considered necessary is again of crucial importance. The term consider means to think over; it connotes that there should be active application of the mind. In other words the term consider postulates consideration of all the relevant aspects of the matter. A plain reading of the relevant provision suggests that the State Government may publish the modifications only after consideration that such modifications have become necessary. The word necessary means indispensable, requisite; indispensably requisite, useful, incidental or conducive; essential; unavoidable; impossible to be otherwise; not to be avoided; inevitable. The word necessary must be construed in the connection in which it is used. (See-Advanced Law Lexicon, 3rd Edition, 2005; P. Ramanatha Aiyar).. which fits in present case fully. Guided by these felicitous observation of Hon ble Supreme court we have no hesitation in our mind in accepting the legal pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
