TaxTMI 
TaxTMI 
TaxTMI 
2009 (5) TMI 591
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....tion of the assessment made under s. 147/143(3) of the Act wherein the Department is in appeal before the Hon'ble Tribunal. 2. It is prayed that the order of the CIT(A) be set aside and that of the AO restored." 4. The brief facts of the case are that the assessee is an individual and has filed his return of income on 30th Oct., 1996 declaring an income of Rs. 4,90,700 for the asst. yr. 1996-97. The case was processed under s. 143(1)(a) on 30th Oct., 1998. Later on, the AO issued notice under s. 148 of the Act on 28th March, 2003 as there were reasons to believe that the assessee has claimed excess deduction under s. 80-O of the Act. The AO served this notice by affixture on 29th March, 2003 at the last known address of the assessee and copy was also sent by post. The assessee was awarded 'Samman Patra' for the financial year 1997-98 on 10th July, 2000 by the Chief CIT, North-West Region. Necessary permission was sought from the CIT, Jalandhar-II, to complete the assessment under scrutiny. As per record, the assessee is an advocate and derives income from profession and other sources. In compliance to the notice under s. 148, the assessee filed return on 30th July, 2003 with the ....
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.... copy of which was also sent by post on 31st March, 2003. Moreover, issuance of notice under s. 148 within the stipulated period is compulsory and not service although the service of notice under s. 148 has also been made within the period. Thus, the objection raised by the assessee is not accepted. Secondly, the issuance of notice under s. 148 is challenged on the ground that deduction under s. 80-O is available on gross receipts relying upon the decision of Calcutta High Court in the case of CIT vs. Indus Services Ltd. (1998) 147 CTR (Cal) 107 : (1998) 230 ITR 328 (Cal). Another reason, as to why the issuance of notice under s. 148 is not justified, is that the assessee received a Samman Patra from the Chief CIT, North-West Region, Chandigarh, on 10th July, 2000. The objection of the counsel is not acceptable. On the plain reading of s. 80-O it becomes crystal clear that intention of the legislature is to grant deduction under s. 80-O of the income received from specific source and not on the total receipts. In the whole scheme of section the word 'income' has been used and nowhere the words 'turnover/receipt/ gross amount' have been used. If the layout of the IT Act, 1961 is a....
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....0) 160 CTR (SC) 389 : (2000) 243 ITR 26 (SC); (ii) H.H. Sir Rama Varma vs. CIT (1994) 116 CTR (SC) 55 : (1994) 205 ITR 433 (SC); (iii) Distributors (Baroda) (P) Ltd. vs. Union of India (1985) 47 CTR (SC) 349 : (1985) 155 ITR 120 (SC). l.8 The Hon'ble Full Bench approved the decision in the case of CIT vs. Marketing Research Corpn. The Hon'ble Supreme Court has also held in the case of Motilal Pesticides (I) (P) Ltd. vs. CIT that s. 80AB was enacted to declare the law as it always stood in relation to the deduction to be made in respect of income specified under Chapter VI-A of the IT Act. The two decisions of Hon'ble Madras High Court relied on by the learned counsel are not applicable in these circumstances as they did not consider the effect of s. 80AB which was declaratory in nature as per decision of Hon'ble Supreme Court in the case of Motilal Pesticides (I) (P) Ltd. vs. CIT. The decision of Hon'ble Calcutta High Court in the case of Indus Services Ltd, is not relevant to the issue as the only dispute before the Hon'ble Calcutta High Court was whether s. 80-O should be allowed even with respect to amount which had not been brought to India or not. There was no issue before ....
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....p; 75,81,860 Total receipts 80,67,653 Percentage of foreign receipts over total receipts 93.97% Total expenses debited lo P&L a/c 87,89,282 Excess of income over expenditure 44,12,424 Net expenses 43,76,858 Less: (i) Depreciation 2,48,514 (ii) Building maintenance  ....
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....nbsp; --------- Total income 23,96,100 --------- Penalty proceedings under s. 271(1)(c) have been initiated separately. Charge interest under ss. 234B and 234C. Assessed. Issue requisite documents along with copy of this order." 5. Aggrieved by the assessment order dt. 12th Nov., 2003, the assessee filed an appeal before the learned first appellate authority, who vide order dt. 31st Jan., 2008 allowed the appeal of the assessee. 6. The learned first appellate authority declared the invalid reassessment in dispute on the ground that the AO has not adopted the prescribed....
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....nghania, the appellate authority may consider the facts of that report in this case also. I have gone through the decision in the case of appellant for the asst. yr. 1993-94 decided by my learned predecessor on 26th June, 2004 vide appeal No. 191 of 2002-03/CIT(A)/Jal, wherein based on the decision (unreported case of Duli Chand Singhania vs. Asstt. CIT, Civil Writ Petn. No. 4516 of 2003, dt. 20th Dec., 2003) [since reported at (2004) 188 CTR (P&H) 90-Ed.], the assumption of jurisdiction was held invalid. Therefore, following the said decision and the other issues adjudicated as above in the order, the grounds taken by the appellant are allowed. Ground Nos. 5 to 7 which deal with the merits of the case are not required to be adjudicated in view of the decision under grounds Nos. 1 to 4 above." 7. As regards the charging of interest under s. 234B of the IT Act, 1961, which is the issue in dispute in ITA No. 282/Asr/2009, the learned first appellate authority allowed the appeal of the assessee on the ground that the issue in dispute is dependent on the decision in the quantum appeal in the case of the assessee which was decided in favour of the assessee. Therefore, the question of ....
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....e by affixture on 29th March, 2003 at the last known address of the assessee and copy of the same was also sent by post to the assessee on the address given by him on record. He further stated that the assessee is an advocate filed his return on 30th July, 2003 in response to notice under s. 148 of the Act and raised objection to the service of this notice under s. 148 of the Act in spite of validly served by affixture on 29th March, 2003 on the last known address of the assessee at Phagwara in the presence of two witnesses. No doubt, the assessee was a 'Samman Patra' awardee for the financial year 1997-98 and for the same necessary permission was obtained from CIT-II, Jalandhar, on 23rd Oct., 2003. He further stated that the learned CIT(A) has wrongly declared invalid reassessment vide order dt. 31st Jan., 2008. He submitted that the assessee did not ordinarily available at his office at Dana Mandi, Phagwara. The assessee filed his return by mentioning the address Singhania Trading Co. Dana Mandi, Phagwara, but he has signed the return on 29th Jan., 1996 at New Delhi. He also drew our attention towards audit report under s. 44AB of the Act under r. 6G(1)(c) filed along with return....
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....d relevant to the assessment year in dispute. The learned counsel raised a preliminary objection that no notice under s. 148 of the IT Act, 1961 was served on the assessee or anyone duly authorised by him. Originally, the return was filed on 30th Oct., 1996 and was processed under s. 143(1)(a) of the Act on 30th Oct., 1998 and much later, while the counsel was attending to the proceedings of another assessee, the AO informed him that notices under s. 148 had been served on the assessee several times but no return had been received and that the assessee must file the return. It was inquired from the assessee who confirmed that no notice under s. 148 for the above-mentioned assessment year had been received by him. The IT return was thus filed on 30th July, 2003 under protest clearly stating the fact that it was being filed in response to the notice under s. 148 which had allegedly been served. Copy of the return receipted acknowledgement of the return of income evidencing this fact is being enclosed at page No. 1. Even during the assessment proceedings, the fact that notice had not, been served was brought to the knowledge of the AO through the submissions dt. 6th Oct., 2003 and 17t....
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....the notice server/Inspector in this regard, which could justify service through affixture. Moreover, when a person is not available at a particular address, there is no justification of serving the notice through affixture at that address also. In the past, the Department has also been communicating with the assessee at his other Bombay address but on this occasion no notice was sent at the Bombay address. Even for the year under appeal, notice under s. 143(2), dt. 22nd Aug., 2003 was sent at the Bombay address of the assessee and a copy of the same is enclosed at page No. 2. The inspection of file has also revealed that notice under s. 148. dt. 28th March, 2003 was despatched at the Delhi address of the brother but this cannot be treated as a service of notice on the assessee. Even subsequent notices under s. 148, dt. 12th May, 2003 and 18th/20th June, 2003 were sent at the Delhi address. The assessee's brother Shri Ravi Singhania is living and working separately and service made on him through mistake since he was also assessed with the same AO cannot be treated as a valid service on the assessee. 10.6 He further drew our attention to the decision of the Calcutta High Court in t....
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....en issued/served on the appellant after being awarded the Samman Certificate in view of the privileges attached to the certificate. The facts of the case are that a Samman Certificate for the North-West Region was awarded to the assessee on 10th July, 2000 by the Chief CIT, Chandigarh; copy of the certificate is enclosed at page No. 37. As per the incentives/benefits attached to the Samman Patra, the case of the awardee is not to be selected for scrutiny for a period of three years except under very special circumstances, that too, after obtaining necessary prior approval of the CIT/Chief CIT. Copy of the scheme as made available to the assessee is enclosed at page Nos. 38 to 40 of the paper book. In this case, the notice was issued after the assessee was awarded the Samman Patra without there being any special circumstances. The notice was issued to this assessee as it would have been issued to any other person. The decisions of certain judicial authorities cannot under any circumstance be defined as "very exceptional circumstances" for which the case had to be taken up for a Samman awardee. The AO has neither brought on record any reasoning as to why the issuance of notice to thi....
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....of the circular issued by the CBDT was bad in law. Copy of the relevant portion of the decision is enclosed at page No. 88 of the paper book. Similar view has been expressed by the Tribunal, Jabalpur Bench, in the case of Agrawal Farm Equipments vs. ITO (2004) 85 TTJ (Jab) 723. Copy of the decision is enclosed at page Nos. 60 to 69 of the paper book. We would however like to draw your attention to the decision of the Delhi High Court in the case of CIT vs. Best Plastics (P) Ltd. (2007) 295 ITR 256 (Del), wherein it has been held that the assessee's case was taken up for scrutiny in violation of the Board's instructions; the setting aside of the assessment by the CIT(A) was justified. Assessment proceedings thus deserved to be quashed on this score. Copy of the decision is enclosed at page Nos. 89 to 90 of the paper book. 10.10 The Supreme Court has in the case of State of Punjab vs. Nestle India Ltd. (2004) 189 CTR (SC) 501 : (2004) 269 ITR 97 (SC) held that where an announcement was made by the Finance Minister of the State on the floor of the House about milk being exempt from purchase tax, even though a notification to this effect was not brought out later. Based upon the princ....
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....thing to say in response to the detailed submissions and under these circumstances, the CIT(A) has given a correct finding at page No. 12 of his order. As per the findings order of the AO is bad on multiple scores and has been rightly held to be so. 10.13 In the end he submitted that the learned CIT(A), after taking into consideration the facts and legal position has ordered the cancellation of the assessment order. The learned CIT(A) has rightly held that notice issued under s. 148 had not been served and no prior permission of the concerned authority was taken. 10.14 He further stated that it is absolutely pertinent to mention that the CIT(A) has adjudicated the issue only on the legal aspect of the service of notice and also as to whether notice could be issued to a Sammanee, the other legal issues have not been adjudicated as the order was quashed and in case, the Hon'ble Bench is of the view that the reopening was valid, then the matter should be restored to the file of the CIT(A) for adjudicating the issue and the other issues taken up in appeal before him. 10.15 In support of the same, the learned counsel for the assessee also filed a paper *book containing pp. 1 to 107 w....
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....ent of the learned Departmental Representative which is based on the record available with us that this approval was taken only in the month of October, 2003. The fact revealed that it is not a case of prior approval from the concerned authority because the AO issued notice under s. 148, dt. 28th March, 2003 and he got the approval in the month of October, 2003. Since in this case no prior approval was taken and subsequent proceedings are bad in law and contrary to the commitment made by the Department in the Samman Patra. The commitments made by the Revenue authority have to be honoured and these are binding and cannot be ignored. It is held by the Hon'ble Andhra Pradesh High Court in the case of CIT vs. Smt. Nayana P. Dedhia that if the assessment made in violation of the circular issued by the CBDT that is bad in law. The learned counsel for the assessee has attached this decision in the paper book at p. 88 and another decision on this issue is of the Hon'ble Delhi High Court in the case of CIT vs. Best Plastics (P) Ltd., wherein it has been held that the assessee's case was taken up for scrutiny in violation of Board's instructions, the setting aside of the assessment by the CI....
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....bai address. As per record notice under s. 148 of the Act dt. 28th March, 2003 was despatched at Delhi address on the brother of the assessee but this cannot be treated as service of notice on the assessee. As per averment of the assessee, his brother, Shri Ravi Singhnia is living and working separately and service made on him is not a valid service because the assessee has not authorised him to receive such notice. To support his contention, the learned counsel for the assessee relied upon the decision of jurisdictional High Court in the case of Kunj Behari vs. ITO in which the Hon'ble High Court held that service of notice is to be effected on the person concerned personally but where the authority concerned is satisfied that the person concerned is keeping himself out of the way with a view to avoiding service or that for any other reason the summons cannot be served in the ordinary way, the authority can order the summons be served by affixture. In support of this contention, the learned counsel for the assessee also relied upon the order of the Hon'ble Kerala High Court in the case of A.K. Kochandi & Ors. vs. Agrl. ITO. The learned counsel for the assessee also drew our attent....