TaxTMI 
TaxTMI 
2019 (2) TMI 2117
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....g stamp duty having ½ share of total land of 1058 Marlas vide sale deed executed on 09.02.2005 from Sh. Surinderjit Singh Jaspal & Sons (HUF). After going through the records, it was found that the above named person did not file his return of income for the assessment year 2005-06. Therefore, notice u/s 148 was issued on 23.03.2012 and sent through speed post No. 8274 and was also served personally upon the assessee through Notice Server on 23.03.2012, however the assessee refused to take service as reported by the Notice Server. Then one notice u/s 148 was also served through affixture on the address available on records i.e. Behind Power House, Mohalla Saingarh, Pathankot. Subsequently the assessee filed his return of income declaring an income of Rs. 87,200/- on 22.11.2012 under protest. Thereafter, the statutory notices has been issued to the assessee and finally the Assessing Officer added an amount of Rs. 6,81,620/- as an unexplained cash u/s 69A of the Act. 4. The assessee challenged the said addition before the Ld. CIT(A) on the legal grounds as well as on merit, however the Ld. CIT(A) affirmed the addition of Rs. 9,91,618/- while giving part relief of Rs. 501/- ....
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....dgment of the Hon'ble Punjab & Haryana High Court in the case of Commissioner of Income tax Vs Smt. Paramjit Kaur reported at 311 ITR 38 wherein it has held by the Hon'ble High Court that there must be nexus between the material and escapement of income and the AO must record his satisfaction for reopening the assessment. Likewise, the AO could not establish nexus that the investment made by the AO represented assessee's income. Thus, the proceedings need to be held as invalid in view of the judgement of the Hon'ble High Court. Reliance is also placed on the decision of this Hon'ble Tribunal in the case of Shri Gurpal Singh Vs ITO reported at 159 ITD 757 and also on the decision of this Hon'ble Tribunal in the case of Amrik Singh Vs ITO reported at 159 ITD 329 which support the second legal ground of appeal as mentioned above. In view of the above, it is prayed that the additional ground be allowed to be admitted and also may kindly be allowed. 6. On the contrary, the ld. DR in addition to oral submissions advanced during the course of hearing, also filed the written synopsis in response to the raising of additional grounds, which we als....
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....ctive satisfaction. (ACIT vs Rajesh Jaweri stock brokers (P) ltd (2007) 291 ITR 500(SC) (c) [ITO v. Selected Dalurband Coal Co. Pvt. Ltd. [1996 (217) ITR 597 (SC)] 3) Even reassessment is permissible even without any new material and on the basis of return. SEWAK RAM vs. INCOME TAX OFFICER 236 CTR 462(P&H) 2010- No doubt, mere change of opinion by itself is not a ground for reassessment as held in the judgments relied upon on behalf of the assessee but if there are reasons to believe that tax has escaped, reassessment is permissible. Reasons can be even on the basis of particulars of the return without any new material. Even if proceedings under s. 143(2) are not taken, reassessment proceedings can be taken. 4) It is further held by following the case of raymond wollen mills vs ITO (1999)236 ITR 34 SC, that count can invalidate a notice issued u/s 148 only if it is satisfied that no material was available before the A.O on the basis of which he could form a belief or that the said belief was not at all bonafide or was based on wage, arbitrary or non-specific information. Thus exception to reason only when no material available with Assessing Offi....
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....obtained during the previous assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected." (9) It is also held that assessee having not pointed out during assessment proceedings about expenses incurred relatable to tax free income u/s 14A there was omission and failure on its part to disclose fully and truly material facts and hence reopening of assessment was justified. (Honda Siel Power Products Ltd. v. Dy. CIT (2011) Delhi High court (SLP of the assesse dismissed) 7. Having heard the parties at length and perused the material available on record. The assessee has raised the additional grounds while relying upon various Apex Court's judgments. The decisions relied upon by the revenue department are factually dissimilar. In view of the judgment passed by the Apex Court, in the case of National Thermal Power Corporation Ltd. [229 ITR 383], as the additional grounds clearly emanates from the facts already on record and there is no embargo, therefore we do not have any hesitation to a....
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....sr) and Amrik Singh vs. Income Tax Officer [2016] 159 ITD 329 (Asr). Relevant part of the judgment passed by the Jurisdictional High Court in the case of Commissioner of Income Tax vs. Smt. Pramjit Kaur (supra) is reproduced herein below. "7. It is undisputed that the Assessing Officer had initiated reassessment proceedings on the basis of information received from the survey circle that the assessee had got prepared a demand draft for a sum of Rs. 83,040 which was not accounted in the books of account of the assessee. The Assessing Officer had not examined and corroborated the information received from the survey circle before recording his own satisfaction of escaped income and initiating reassessment proceedings. The Assessing Officer had thus acted only on the basis of suspicion and it cannot be said that the same was based on the belief that the income chargeable to tax had escaped income. The Assessing Officer has to act on the basis of" reasons to believe" and not on " reasons to suspect". The Tribunal had, thus, rightly concluded that the Assessing Officer had failed to incorporate the material and his satisfaction for reopening the assessment and, therefore, the i....
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.... 139 or in response to a notice issued under sub section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. Explanation 1.- Production before the assessing officer of account books or other evidence from which material evidence could with due diligence have been discovered by the AO will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2- For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment namely:- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income tax. (b) Where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the assessing officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return. (....
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.... or nexus while recording reasons for belief that the consideration amount of property acquired is chargeable to tax and has escaped the assessment, in this case the proceedings u/s 147 of the Act itself are vague, hence in any sense cannot survive and therefore we do not have any hesitation to held that the Ld. CIT(A) was absolutely unjustified in upholding the reopening of the assessment u/s 147 of the Act, without appreciating the facts of the case, explanation submitted and evidences places on record judiciously. Hence on this ground also, the assessment proceeding/order is liable to be quashed. 10. Now coming to the 3rd issue, which the assessee has raised by filing an affidavit qua service of notice u/s 148 of the Act. From the notice dated 23.03.2012 it reflects that the notice u/s 148 of the Act dated 23.03.2012 (Paper Book page -4) was sent through speed post to the assessee on 23.03.2012 itself, however, from the order of affixture dated 23.03.2012 (page No. 5 of PB), it reflects that the order for notice by affixture was made on 23.03.2012 itself without waiting for the outcome of the notice sent on dated 23.03.2012 through speed post. 10.1 Identical situation has ....
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..... Shridhar Bedi through Legal Heir Smt. Sonil Bedi Versus Income Tax Officer Ward -3, Phagwara (ITA No. 02(Asr)/2017) . Relevant part of the order is reproduced herin below: 7.2 Rule-1 of Order V of CPC, enumerates the procedure for issuing the summons and according to the rule-10 of Order-V of CPC, service of summon(s) shall be made by delivering or tendering a copy thereof signed by the judge or such officer as he appoints in this behalf, and seal of the Court. 7.3 Rule 17 of order V further enumerates the procedure when defendant refuses to accept the service, or cannot be found. Rule 17 further mandates that where the defendant or his agent or such other person as aforesaid refuses to sign the acknowledgement, or where the serving Officer, after using all due and reasonable diligence, cannot find the aforesaid person, who is absent from his residence at the time when service is sought to be effected on him at his residence and there is no likelihood of his being found at the residence within a reasonable time and there is no agent empowered to accept the service of the summons on his behalf, nor any other persons on whom service can be made, the serving office....
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....on dated 29th May, 2012 through affixture on the deceased assessee, creates many doubts with regard to the genuineness of the service of the notice on the deceased assessee because if the notice has been served through affixture on 31st March, 2012 then certainly the notice server would have used his due and reasonable diligence for not finding the deceased assessee and would have come to the knowledge about the death of deceased assessee and must have communicated the said information to the assessing officer and thereafter the Assessing Officer would had no option except to substitute the assessment proceedings in the name of the legal heir only, however, it is admitted fact that notice 29.05.2012 u/s 142(1) was also served to the deceased assessee by way of affixture and thereafter, getting the knowledge about the death of the assessee, the Assessing Officer initiated the assessment proceeding against the sole legal heir. The notice dated 18.02.2013 u/s 142(1) has also been claimed as served upon the legal heir, through affixture only. While serving the notice through substituted service to the sole legal heir of the assessee, the Assessing Officer never tried to serve the legal....
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.... ever been served upon the assessee neither properly nor at the last known address, therefore the assessment order as well as appellate order which is impugned herein are liable to be set aside, hence the same are set aside. 10.2 We have analyzed the issue under consideration and compared with the facts of the aforesaid decision rendered by the Co-ordinate Bench and therefore are of the considered view that the instant case is squarely covered by the aforesaid case. Even in the instant case , we have called for the record of assessment proceedings, from which it does not reflect that the said notice u/s 148 was ever served upon the assessee or received by the assessee at the address as mentioned in the notice u/s 148 and the order for affixture of notice dated 03.03.2012. Even we realized that the Assessing Officer has sent the notice u/s 148 to the assessee at the address i.e. Behind Power House, Mohalla Saingarh, Pathankot, whereas in the assessment order, the address has been written as C/o Kundan Vila, LIC Lane, Dhanu Road, Pathankot, which further strengthen the case of the assessee that no notice or any enquiry letters dated 07.03.2012, 04.06.2012 and 12.11.2012 has ever s....
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....t was also issued to the assessee simultaneously. However, in response thereto, neither any one attended the assessment proceedings nor any explanation of investment made as referred above was filed by the assessee. Therefore, the Assessing Officer completed the assessment proceedings u/s 144/147 of the Act and made the addition of Rs. 6,41,988/- as an unexplained deposits u/s 68 of the Act. 12. Feeling aggrieved, the assessee challenged the assessment order before the Ld. CIT(A) who affirmed the addition u/s 69A of the Act which is under challenge before us. 13. At the outset, the Ld. AR submitted that he is praying for admission of additional grounds being legal in nature which goes to the root of the case. The assessee in support of admission of additional grounds also filed application for admission of additional grounds, contents of which for the sake of brevity and completeness, reproduced herein. "PRAYER FOR ADMISSION OF ADDITIONAL GROUND It is humbly prayed that the Hon'ble Tribunal may most kindly allow admission of the following additional grounds:- 1) The assessment order deserves to be quashed as the proceedings under section 147 hav....
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....reported at 159 ITD 757 and also on the decision of this Hon'ble Tribunal in the case of Amrik Singh Vs ITO reported at 159 ITD 329 which"support the second legal ground of appeal as mentioned above. In view of the above, it is prayed that the additional ground be allowed to be admitted and also may kindly be allowed. 14. The Ld. DR in order to controvert the claim of the assessee qua admission of additional grounds as well as on merit, also preferred to file the written response in addition to oral submissions, which for the sake of completeness we have already reproduced in para No. 6 of the order and may be read as part and parcel of this appeal as well. 15. Having heard the parties at length and perused the material available on record. In ITA Nos.353 (Asr)/2016, while respectfully following the decision of Apex Court in the case of National Thermal Power Corporation Ltd. [229 ITR 383], we allowed the raising of additional grounds being legal in nature therefore, in view of the order in ITA Nos. 353 (Asr)/2016 and the fact that the additional grounds as raised by the Assessee clearly emanates from the facts already on record, we allow the assessee to raise th....
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....w of decision made in para No. 9 of the order passed in ITA Nos. 353 (Asr)/2016. 18. Hence in cumulative effect on the aforesaid analyzation, observations and peculiar facts and circumstances, we quash the assessment proceedings/order. As we have already quashed the Assessment proceedings/Order for want of proper opportunities to the assessee before recording the reasons for re-opening and also held the reopening of the assessment u/s 147 of the act, absolutely unjustified, therefore do not consider it appropriate to travel to the other issue(s) raised by the assessee which in our considered opinion shall be academic exercise only. 19. In the result, both the appeals filed by the assessee stands allowed. Order pronounced in open Court on 28.02.2019 (SANJAY ARORA) ACCOUNTANT MEMBER Sd/- (N.K.CHOUDHRY) JUDICIAL MEMBER I have perused the order proposed by my ld. brother, JM in the captioned appeals. I am in agreement therewith. My point of difference, however, and which explains this assent order, is in respect quashing the assessment for A.Y.2006-07 (Appeal No. 354/Asr/2016) on the ground of alleged non-service of notice u/s. 148(1). The sai....