IN THE INCOME TAX APPELLATE TRIBUNAL
"B" Bench, Mumbai
Before Shri D. Manmohan, Vice President
and Shri Sanjay Arora, Accountant Member
ITA No. 546/Mum/2012
(Assessment Year: 2003-04)
Income Tax Officer - 2(3) Smt. Neelam Mahesh Goyal
Qureshi Mansion, 1st Floor Vs. A-5, Sai Aradhana CHS Ltd.
Gokhale Road, Naupada Swagatam Complex, Jesal Park
Thane (W) Bhayander (W), Thane
PAN - AACPM0287H
Appellant Respondent
Appellant by: Shri Manvendra Goyal
Respondent by: Shri N.M. Porwal
Date of Hearing: 17.10.2013
Date of Pronouncement: 17.10.2013
ORDER
Per D. Manmohan, V.P.
This appeal by the Revenue is directed against the order passed by the
CIT(A)-II, Thane and it pertains to A.Y. 2003-04.
2. The main ground urged before us is that the learned CIT(A) erred in
holding that the order passed consequent to the notice issued under section
148 of the Act is bad in law; according to the AO the impugned assessment
order was passed after duly serving notice under section 143(2) and 142(1)
of the Act and hence the learned CIT(A) was not justified in deleting the
consequent addition made therein.
3. The case was posted for hearing on 14.10.2013, on which date the
learned counsel, Shri N.M. Porwal, appeared on behalf of the assessee and
contended that the assessment was completed without proper service of
notice under section 148 of the Act by the concerned AO. He has also
adverted our attention to the assessment order as well as the order of the
CIT(A) to submit that there is no dispute with regard to the fact that notice
under section 148 of the Act was issued by the DCIT, Circle I, Kalyan but
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Smt. Neelam Mahesh Goyal
upon alleged transfer of jurisdiction, the Income Tax Officer, Ward 2(3),
Thane has never issued notice under section 148 of the Act but assumed
jurisdiction and hence the assessment order deserves to be quashed for
want of assuming proper jurisdiction. Since this is a Departmental appeal,
we have directed the learned D.R. to obtain the record and also to furnish
relevant details which may throw light upon the factual matrix of the case.
The case was accordingly adjourned to 17.10.2013, on which date Shri
Sanjeev Ghei, Jt. Commissioner of Income Tax, Range-2, Thane appeared
and filed a letter dated 15.01.2013 addressed to the CIT-DR, which reads as
under: -
"Kindly refer to our telephonic conversation on the above cited subject.
Since the AO vide his letter No. THN/ITO/WD/2(2)/NG/2013-14/nil
number dated 15/10/2013 (copy enclosed for ready reference)
addressed to undersigned has expressed his inability to provide the
requisite details/ documents/records in the above cited case at a short
notice, it is requested that sufficient time may kindly be sought from
the Hon'ble ITAT, `B' Bench, Mumbai so that the concerned records
could be traced and produced on the next date of hearing."
4. Under these circumstances we proceeded to dispose of the appeal on
the strength of the material available on record. The facts in short are that
the assessee is an individual engaged in private tuitions and she declared
total income of `2,14,430/- before the AO, Ward 4(3), Thane, who had
jurisdiction on the assessee at that point of time since assessee was residing
at Bhayandar. No action was taken therein but the case was sought to be
reopened by the DCIT, Circle-I, Kalyan by issuing notice under section 148
of the Act on the ground that the assessee and its group was engaged in
fraudulent billing activities, etc.
5. As the jurisdiction of the case lies with the ITO, Ward 2(3), Thane the
case was transferred to the ITO, Ward 2(3) who merely issued a notice under
section 143(2)/142(1) of the Act on 11.10.2010. Vide letter dated 30.11.2010
the assessee requested the AO to furnish reasons for reopening of
assessment, copy of notice, proof of service of notice and reasons recorded
therein. The AO supplied the copies asked for except proof of service of
notice. At this juncture the assessee challenged the reopening of the
3 ITA No. 546/Mum/2012
Smt. Neelam Mahesh Goyal
assessment on the ground that the so called notice under section 148 of the
Act was not served upon the assessee and, therefore, the proceedings
initiated is bad in law. The AO rejected the contention of the assessee by
observing that notice was issued under section 148 by the DCIT, Cricel-I,
Kalyan and the case was ultimately transferred to the AO concerned, who in
turn issued notice under section 143(2)/142(1) of the Act. He, therefore,
proceeded to complete the assessment wherein he determined the total
income at `14,58,297/-.
6. Aggrieved, assessee contended before the learned CIT(A) that she was
regularly assessed to tax at Ward 2(3), Thane (earlier Ward 4(3), Thane).
However, for A.Y. 2003-04 the case was stated to have been reopened by
DICT, Kalyan, who has no jurisdiction over the case. It was also contended
that under section 148 of the Act service of notice is a condition precedent to
making the order of assessment. In the instant case there is no proof of
service of notice. Reliance was placed upon several decisions in support of
her contention that service of notice cannot be regarded as mere procedural
requirement and in the absence of service of notice the entire proceedings
should be treated as null and void. The learned CIT(A) called for the
assessment records and notice. The natural jurisdiction of the case of the
assessee was with the ITO, Ward 2(3), Thane but the DCIT, Circle-I, Kalyan
sought to reopen the assessment, which is not in accordance with law. The
issue was dealt with elaborately in para 5 of his order. In para 5.12 he
ultimately held that the AO has not placed any evidence on record that the
notice under section 148 of the Act was properly served upon the assessee
as laid down in the law. In the absence of evidence on record he concluded
that the notice in the instant case was without jurisdiction and the same
was not properly served on the assessee as per law, which is a pre-requisite
for making assessment. Consequently the assessment, based upon the so
called reassessment proceedings initiated, are bad in law and hence the
additions made therein were deleted by the learned CIT(A).
7. Even before us the learned D.R. was not able to place any material to
contradict the findings of the learned CIT(A). It deserves to be noticed that
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Smt. Neelam Mahesh Goyal
the first Appellate Authority passed the order on 13.10.2011 and the appeal
was preferred in the month of January, 2012 and even thereafter the
learned D.R. sought number of adjournments to obtain relevant record to
support the grounds urged before us. However, the learned D.R. was unable
to furnish any record. In fact, the AO has not even considered the objections
raised by the assessee, which clearly indicates that the AO was aware of the
lacuna in the matter of reopening of the assessment and hence chose not to
deal with the issues urged before him in detail. Under these circumstances,
in the absence of any evidence placed by the learned D.R., to contradict the
findings of the learned CIT(A), we are of the view that the Revenue could not
make out any case to support its contentions and hence the appeal filed by
the Revenue is dismissed.
Order pronounced in the open court on 17th October, 2013.
Sd/- Sd/-
(Sanjay Arora) (D. Manmohan)
Accountant Member Vice President
Mumbai, Dated: 17th October, 2013
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A) II- Thane
4. The CIT I - Thane
5. The DR, "B" Bench, ITAT, Mumbai
By Order
//True Copy//
Assistant Registrar
ITAT, Mumbai Benches, Mumbai
n.p.
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