Alokik Kumar Jain v. Income Tax Appellate Tribunal, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 37 / 2009 Alokik Kumar Jain R/o Mangal Niwas, Vijaypada, Rampura, Kota ----Appellant Versus 1. Income Tax Appellate Tribunal, Jaipur 2. Commissioner of Income Tax (Appeals), Kota 3. Income Tax Officer, Ward-I (i) Kota ----Respondent Connected With D.B. Income Tax Appeal No. 131 / 2009 Rajendra Kumar Jain, R/o Mangal Niwas, Vijaypada, Rampura, Kota ----Appellant Versus 1. Income Tax Appellate Tribunal, Jaipur Bench, SMC Jaipur 2. Commissioner of Income Tax (Appeals), Kota 3. Income Tax Officer, Ward-I (i) Kota ----Respondent D.B. Income Tax Appeal No. 414 / 2009 Alokik Kumar Jain R/o Mangal Niwas, Vijaypada, Rampura, Kota ----Appellant Versus 1. Income Tax Appellate Tribunal, Jaipur Bench, Rajasthan Chamber Bhawan, Jaipur 2. Commissioner of Income Tax (Appeals), Near CAD Circle Kota 3. Income Tax Officer, Ward-I (I), Near CAD Circle, Kota ----Respondent _____________________________________________________ For Appellant(s) : Mr. Anant Kasliwal For Respondent(s) : Ms. Parinitoo Jain _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE INDERJEET SINGHJudgment 01/08/2017 In these appeals common questions of law and facts areinvolved, hence, they are decided by this common judgment. 1.By way of these appeals, the appellant has assailed thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeals preferred by the assessee confirming theorder of AO. 2.This court while admitting the matter framed the followingquestions of law:- DBITA No. 37/2009 “i) Whether the ITAT has erred in not havingconsidered the issue of non-service of notice u/s148 within the prescribed time frame despite thisfact emerging from the assessment record? ii) Whether the ITAT was justified in law in havingdisallowed the claim for loss suffered by theAppellant-assessee in trading of Mustardundertaken through M/s Hari Agro Mills PrivateLtd., Jamshedpur despite the same having beenduly confirmed by the M/s Hari Agro Mills PrivateLtd., Jamshedpur.?” DBITA No. 131/2009, DBITA No. 414/2009 i) Whether the ld. ITAT has erred in having takenthe view that the issue relating to the validity ofservice of notice u/s 148 of the Act, 1961 withinthe prescribed time frame is no more open to theappellant in view of its order dated 21.12.2004. ii) Whether the ITAT has erred in not havingconsidered the issue of non-service of notice u/s148 within the prescribed time frame despite thisfact emerging from the assessment record.?” 3.Counsel for the appellant contended that in the original orderwhich came to be passed it has been admitted on page 23 thatnotice was served on Radhe Shyam Nagar on 14[th] March, 2000and that date was not known to the assessee. The same fact wasalso admitted by the CIT(A) observing as under:- “2.3. The submissions that the notice was notserved is also not acceptable because it is anadmitted fact that the notice was served on thebusiness premises of the assessee and therefore itis not acceptable that it was not in the knowledgeof the appellant. The appellant has admittedlyattended the office of the AO, subsequently andwithin the financial year i.e. before 31.3.2000 andthis was admitted to be in response to hisknowledge that the notice was issued in his name.” 4.However, CIT(A) has dismissed the appeal holding that afterfirst round of litigation, the assessee has gone in appeal wherein ithas been observed as under:- “I have considered the argument of the appellantand perused the assessment order as well as thefacts available on record. It is seen that this issuecame up for consideration before the erstwhileCIT(A), Rajasthan-II. She has considered theissue and has observed as under:- 4.However, CIT(A) has dismissed the appeal holding that afterfirst round of litigation, the assessee has gone in appeal wherein ithas been observed as under:- “I have considered the argument of the appellantand perused the assessment order as well as thefacts available on record. It is seen that this issuecame up for consideration before the erstwhileCIT(A), Rajasthan-II. She has considered theissue and has observed as under:- 2.2 I have considered the facts of the case andthe submissions made, and don’t find thearguments given to be acceptable for thefollowing reasons. The appellant has not filed anyreturn of income for the relevant assessmentyear up to the finalization of the assessment bythe AO. The AO has as per records, theinformation that the appellant was in receipt ofsubstantial income above the taxable incomebeing determined share of business income fromfirms in which the appellant was a partner. Suchdetermined share of the appellant form the firmswas substantially above the limit prescribed fortaking action under section 148 within the timelimit up to the date of issuance of notice undersection 148 in the case of the appellant for thisassessment year. Therefore there is nojustification in the appellant’s submissions that action under section 147 was bared by limitationand therefore the proceedings are void abinitio.2.3 The Submissions that the notice was notserved is also not acceptable because it is anadmitted fact that the notice was served on thebusiness premises of the assessee and thereforeit is not acceptable that it was not in theknowledge of the appellant. The appellant hasadmittedly attended the office of the AOsubsequently and within the financial year i.e.before 31.03.2000 and this was admitted to be inresponse to his knowledge that the notice wasissued in his name. There is also no evidence with the appellant thatthe income declared by him for the year wascorrect income because the return filed atRs.12,200/- in assessment year 1990-91 andRs.19,980/- for assessment year 1991-92 wasmuch lower than the determined share from thefirm which is very much higher. It is not the caseof the appellant that the AO is incorrect in statingthat he was a partner in the firms as indicated inthe assessment order. Accordingly therefore,computation of Income is justified and the sameis confirmed.” Besides the various facts mentioned by theerstwhile CIT(A), It is seen that the notice u/s142(1) was issued on 13.03.2000, which wasreturnable on 21.03.2000. This notice wasadmittedly received by Shri Radheshyam Nagar.Admittedly, the appellant has attended inresponse to the notice u/s 142(1), thoughbelatedly before the AO and therefore, he hasalso filed return of income. These facts indicatethat the appellant was in knowledge of the noticeu/s 147/148, which was issued on 27.03.1998.In view of these facts and circumstances, theobjection of the appellant in this regard isrejected and ground taken by the appellantfailed.” 5. However, the same contention was raised by the assesseebefore the Tribunal in present appeal where the Tribunal afterconsidering the case has held that it is not open for the assesseeto raise the same contention. 6.Counsel for the respondent has supported to the order andcontended that in view of the remand order where department hasin the previous litigation agreed for remand to consider that thenotice is served on the assessee. Therefore, after considering thecase no error has been committed by the Tribunal and it is purelya question appreciation of facts. In that view of the matter, noquestion of law arises. 7.We have heard counsel for both the sides. 8.Counsel for the appellant has relied upon the two decisionsof Delhi High Court in the case of Commissioner of Income Tax vs.Chetan Gupta reported in [2016] 382 ITR 613 (Delhi) wherein ithas been held as under:- 6.Counsel for the respondent has supported to the order andcontended that in view of the remand order where department hasin the previous litigation agreed for remand to consider that thenotice is served on the assessee. Therefore, after considering thecase no error has been committed by the Tribunal and it is purelya question appreciation of facts. In that view of the matter, noquestion of law arises. 7.We have heard counsel for both the sides. 8.Counsel for the appellant has relied upon the two decisionsof Delhi High Court in the case of Commissioner of Income Tax vs.Chetan Gupta reported in [2016] 382 ITR 613 (Delhi) wherein ithas been held as under:- “Held accordingly, that no attempt had been madeby the Department to serve the assessee at theaddress provided by him. All the notices wereaddressed to him at another address C/o. KiranCinema. Therefore, this was not a case where anattempt was made by the Department to serve theassessee at his known address, and upon notfinding him there the Department learnt of theaddress where he would be found. Merely becauseother notices sent to the ‘assessee group” werereceived by the employees of Kiran Cinema it didnot automatically lead to the inference that theassessee’s place of business was also KiranCinema. In any event, there could not be aninference that V was duly empowered by theassessee to receive notices on his behalf. In thevery first notice dated March 28, 2008 theendorsement made by V Showed him describinghimself as “accountant, Kiran Cinema” and nothingmore. The assessee made a specific request to theAssistant Commissioner that a copy of notice undersection 148 along with basis and reason of openingthe case under section 148 be provided to them toenable him to comply with it. However, theAssistant Commissioner in his reply of the samedate continued to show the addresses of theassessee as C/o Kiran Cinema and insisted that notice had been validly served on V, accountant ofKiran Cinema (who also received other notices ofthe concerned group concerns). Section 292BB isprospective. In any event the assessee in thepresent case, having raised an objection regardingthe failure by the Department to effect service ofnotice upon him, the main part of section 292BBwas not attracted. Since no proper service of noticehad been effected under section 148(1) of the Acton the assessee, the reassessment proceedingswere liable to be quashed. 9.He has also relied upon the decision of Jammu Kashmir HighCourt in the case of Dina Nath vs. Commissioner of Income Taxreported in (1993) 204 ITR 667 wherein it has been held asunder:- “The admitted facts of the case are : that, on thelast day when the assessment was to be made, anotice was served upon one Som Nath, who isneither a member of the family of the assesseenor his duly authorised agent having specificallybeen authorised to accept the notice on behalf ofthe assessee. It is also established that Som Nathhad been accepting the notice earlier for and onbehalf of the assessee and prosecuting the caseson his behalf before the Income Tax authorities. Inorder to appreciate the rival contentions of learnedcounsel for the parties, a reference is required tobe made to the provisions of Sub-section (2) ofSection 143 of the Act, which provides : "143. Assessment.--. . . . (2) Where a return has been made under Section139, or in response to a notice under Sub-section(1) of Section 142, the Assessing Officer shall, ifhe considers it necessary or expedient to ensurethat the assessee has not understated the incomeor has not computed excessive loss or has notunderpaid the tax in any manner, serve on theassessee a notice requiring him, on a date to bespecified therein, either to attend his office or toproduce, or cause to be produced there, anyevidence on which the assessee may rely insupport of the return : "143. Assessment.--. . . . (2) Where a return has been made under Section139, or in response to a notice under Sub-section(1) of Section 142, the Assessing Officer shall, ifhe considers it necessary or expedient to ensurethat the assessee has not understated the incomeor has not computed excessive loss or has notunderpaid the tax in any manner, serve on theassessee a notice requiring him, on a date to bespecified therein, either to attend his office or toproduce, or cause to be produced there, anyevidence on which the assessee may rely insupport of the return : Provided that no notice under this sub-sectionshall be served on the assessee after the expiry ofthe financial year in which the return is furnishedor the expiry of six months from the end of themonth in which the return is furnished, whicheveris later." 10.Having considered the order, the first contention that noticewas not served, is not open after the remand order. In ourconsidered opinion, the view taken by the Tribunal is just and proper. 11.The question is required to be answered in favour of thedepartment against the assessee. 12. The appeals stand dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. A.Sharma/7-9