Ashig Hussain Keen And Ors v. Commissioner Of Income Tax & Ors

HIGH COURT OF JAMMU AND KASHMIR,AT JAMMU ITA No. 8/2006, MP Nos. 3/2006 & 8/2006. Date of Order: 17.05.2016. Ashig Hussain Keen and ors. Vs. Commissioner of Income Tax & ors Coram: Hon ble Mr. Justice Ramalingam Sudhakar, Judge.Hon ble Mr. Justice B.S.WaltaJJudg(AAppearing Counsel: For the Appellant (s): Mr. Subash Dutt, Advocate withMr. Suraj Singh Wazir, Advocate.For the Res1ondent3S4- Ms. Aruna Thakur5Advocate. iThis appeal 1s filed by the assessee challenging the orderof the Tribunal. The assessment year 1s 1984-85. The appellant-assessee in this case 1s a Forest Contractor and filed his return ofincome at an income of Rs.17,040/- on 29.09.1986. The returnwas mentioned to have been filed under Amnesty Scheme andwas accepted under Section 143(1) on 31.03.1987. In thesubsequent year, the assessee has filed balance sheet, In thatprofit and loss account and other details like sundry debtors,creditors, loan advances and list of unsecured loans were shownfor the assessment year 1987-88. In it was reflected a loan ofRs.12,25,000/-. The details of the unsecured loans filed inAnnexure(c) to the balance sheet reproduced in the assessment|order showed that the loans and advances were taken in March,1984 relevant to the assessment year 1984-85. It 1s thisassessment year, 1.e., 1984-85 that 1s in the issue under appeal.The Assessing Officer questioned the genuiness of creditors.The Assessing Officer called upon the assesses to produce proof of those creditors for examination primarily on the ground thatthe genuiness of those creditors were doubted. According to theAssessing Officer, the assesse failed to disclose all materialfacts for the assessment year 1984-85 and the income ofRs.12,25,000/- had escaped assessment. On this premise, noticeunder Section 148 of the Income Tax Act was issued to the'assessee which came to be recorded as “Refused” and therefore|the Assessing Officer proceeded on the notice dated 03.03.1994issued under Section 148 as one that was properly served on theassessee and passed the assessment order. Thereafter, thestatutory notices were issued under Section 142(1) / 144 of theIncome tax Act. | DOn 08.03.1996, the counsel for the Assessee Mr. RajinderKumar, Advocate appeared before the Assessing Officer andfiled a reply stating that the returns earlier filed may be treatedas the one filed in response to the Notice under Section 148 ofthe Income Tax Act. In effect there was no explanation for thesaid amount. 3Thereafter it 1S recorded that the Assessee did notcooperate with the Assessing Officer and Assessment order|came to be passed and an addition of Rs.12,25,000/- towards|income was made on the assessee’s failure to prove genuinenessof cash credits as mentioned above. 4AThe assessee challenged the order before the CII(A)primarily on the ground that the assessee had filed a return|under Amnesty Scheme, therefore, there 1s no question of|reopening the assessment. Further plea 1s that the refusal|endorsement on the notice tapal 1s no proper service on the| assessee. An explanation 1s also given contending that he wasnot available at that point of time. CIT(A) showed indulgenceand accepted the plea of the appellant and set aside theassessment order holding that there 1s no proper and validservice of notice under Section 148 of the Income Tax Act.|Consequently, there 1s no escape of income due to failure on thepart of assessee to disclose material facts. CIT(A) annulled theassessment order. 5_The Income Tax Department challenged the same beforethe Tribunal. Before the Tribunal, the present appellant-assesseeand the department contested the issue. The stand of thedepartment 1s that the Amnesty Scheme at best would apply tothe sum of Rs.17040/-. The loan amounting to Rs. 12,25,000/-.not disclosed relates to the assessment year 1984-85. Therefore,the department is justified in treating the said amount as incomeof the assessee which 1s escaped assessment and the AssessingOfficer was justified 1n issuing notice under Section 148 of theIncome Jax Act and the assessment 1S 1n order. 5_The Income Tax Department challenged the same beforethe Tribunal. Before the Tribunal, the present appellant-assesseeand the department contested the issue. The stand of thedepartment 1s that the Amnesty Scheme at best would apply tothe sum of Rs.17040/-. The loan amounting to Rs. 12,25,000/-.not disclosed relates to the assessment year 1984-85. Therefore,the department is justified in treating the said amount as incomeof the assessee which 1s escaped assessment and the AssessingOfficer was justified 1n issuing notice under Section 148 of theIncome Jax Act and the assessment 1S 1n order. 6.On the plea of non-service of notice, it was contended thatthe mode adopted by the Department to serve notice is theprescribed mode. The endorsement of “Refusal” and report ofthe postal authorities 1s proof enough to show that properservice was effected on the assessee. Nothing more needs to bedone. This found favour with the Tribunal. The plea of the|appellant that he was not available and he could not be served,was rejected by Tribunal and right so, because we find that oneof the modes of service required by law was effected by theDepartment. Refusal on the part of the assessee is a clear| indication that service of notice was effected. Going further, theTribunal came to the conclusion that there 1s no real impactinsofar the plea of no service because Advocate Rajinder Kumarappeared before the authority in response to the notice. He hasfiled a return stating that the return of the year 1984-85 1sreiterated. There ends the matter on the technical plea. JInsofar as service of notice under Section 148 jsconcerned, the Tribunal is correct in holding that subsequentparticipation of the assessee before the assessment order 1spassed reiterating the return of the year 1984-85 puts the issueto rest. 8The Tribunal thereafter proceeded to hold that CIT(A)having not considered the matter on merits, has remanded thematter back to the files of CIT(A) with a direction to decide on|the addition of Rs.12,25,Q000/- for the assessment year 1984-85on its own merits. That remand order, we find no infirmity. QIn view of the above, we find no reason to interfere withthe order passed by the Appellate Tribunal. 10. Appeal is dismissed. (B.S.Waliayo( Ramalingam Sudhakar) Judge Judge Jammu: |Suntta.17.05.2016