Ita/269/2015 Of Ramesh Chand v. Commissioner Of Income Tax, Patiala And Anr

ITA No.269 of 2015 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No.269 of 2015 (O&M)Date of decision: 20.11.2015 Ramesh Chand Appellant Commissioner of Income Tax, Patiala and another .Respondents CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTALHON’BLE MR. JUSTICEK RAMENDRA JAI Present: Mr. Aman Bansal, Advocate for the petitioner. Mr. Zora Singh Klar, Advocate for the respondents. Ajay Kumar Mittal,J.CM No. 15983CI]32015 1]Delay of 110 days in filing the pesent appeal is condoned. ITA No.269 of 2015 2. This appeal has been preferred by the appellant under Section260A of the Income Tax Act, 1961 (in short, “the Act’) against the orderdated 30.9.2014, Annexure A.3 passed by the Income Tax AppellateTribunal, Chandigarh Bench ‘A’, Chandigarh in ITA No.1063/Chd/2013 forthe assessment year 2005-06, claiming following substantial questions of law:- 91) Whether in the facts and circumstances of the present case, thelearned authorities have erred in considering the most material factthat no opportunity of hearing was given to the appellant and henceviolation of principles of natural justice? 11) Whether in the facts and circumstances of the case, the learnedauthorities below erred in acting only on the basis of assumptionsand presumptions and after ignoring the well reasonedmaterial/evidence which was brought on record by theappellant/assessee? 111) Whether in the facts and circumstances of the case, the action ofthe authorities below - the impugned orders are legally sustainablein the eyes of law?” 3. A few facts relevant for the decision of the controversy involvedaS narrated in the appeal may be noticed. The appellant-assessee wasrunning the business of food grains at Nabha. He had suffered heavy loss inthe business as he used to give advance amount to the agriculturists andothers to obtain agricultural proceeds from them to earn commission andalso interest in some cases. Most of the persons to whom advances weregiven had refused to repay. As such, the appellant had to clear the liabilityby raising loan at higher rate of interest. The situation worsened in April-May 2007 when the creditors forced the appellant to make the payment.Some of them had threatened him with dire consequences due to which hehad to run from Nabha by leaving behind the assets and business there. Asthe appellant was unable to pay to the creditors, he filed a petition in theCivil Court at Nabha under the Provisional Insolvensy Act, 1920 with the prayer that he be declared insolvent and the accounts be settled betweencreditors and debtors. For the assessment year 2005-06, the appellant filedreturn of income on 21.9.2005 declaring total income of ©|1,83,917/- and agricultural income of<a10,000/- which was processed under Section 143 ITA No.269 of 2015 (O&M) (1) of the Act on 29.12.2005. On account of threat by the creditors, theappellant had to leave Nabha. Thus, no notice of hearing or assessmentorder could be served upon him. Consequently, the assessment order waspassed on 24.12.2007 assessing taxable income of the assessee at412,03,770/- besides agricultural income of LT10,000/- alongwith interest andpenalty. Aggrieved by the order, the appellant filed appeal before theCommissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated25.10.2013, Annexure A.2, the appeal was dismissed. The appellant filedappeal before the Tribunal which was also dismissed vide order dated30.9.2014, Annexure A.3. Hence the instant writ petition. 4. Reply has been filed on behalf of respondent No.2 by IncomeTax Officer, Nabha wherein it has been inter alia stated that the departmenttried to serve all the notices at the given address of the appellant but theappellant was not available at the said address. Finally the last notice had tobe served through affixation at the last known address in the presence oftwo witnesses of the same locality. Thus, proper procedure regardingservice of notice was followed. On these premises, prayer for dismissal ofthe appeal has been made, 4. Reply has been filed on behalf of respondent No.2 by IncomeTax Officer, Nabha wherein it has been inter alia stated that the departmenttried to serve all the notices at the given address of the appellant but theappellant was not available at the said address. Finally the last notice had tobe served through affixation at the last known address in the presence oftwo witnesses of the same locality. Thus, proper procedure regardingservice of notice was followed. On these premises, prayer for dismissal ofthe appeal has been made, 5. We have heard learned counsel for the parties.| 6. It has been categorically recorded by the Tribunal in its orderdated 30.9.2014 that notice under section 143(2) of the Act was served onthe assessee on 31.7.2006. The assessee did not appear. He left the premiseswithout giving further address to the department. Thereafter, for furtherproceedings before the Assessing officer, notices were served throughatfixture at the last known address in the presence of two witnesses of thesame locality. Still the appellant did not appear. Ex parte assessment order ITA No.269 of 2015 (O&M) and demand notice were also affixed on the last known address. The appealpreferred before the CIT(A) was held to be time barred. The relevantfindings recorded by the Tribunal read thus:- 93. We have heard the learned representatives of both theparties and perused the findings of the authorities below. It isnot disputed that notice under section 143(2) dated 24.7.2006was served on the assessee on 31.7.2006. Thereafter there wasno compliance on the part of the assessee and the assessee leitthe premises without giving further address to the revenuedepartment. Therefore notice was served through atfixture forfurther proceedings before the Assessing Officer and accordingto the report of the notice server it was the last known addressand the proceedings were attended by two eye witnesses. TheAssessing Officer also reported that ex parte assessment orderand demand notice were also affixed at the last known addressof the assessee. This fact would clearly reveal that the assesseedespite service of the earlier notice did not appear before theAssessing Officer and for the remaining notices the same wereServed through affixure as per law and assessment order wasalso served upon the assessee through affixture in the presenceof two witnesses. The Hon’ble Punjab and Haryana High Courtin the case of VRA Cotton Mills P. Limited vs. Union of Indiaand others, (359 ITR 495 (SC) held that the notice which wasserved by affixture on the last date of limitation was valid. Thisfact on record clearly proves that notices were served upon theassessee and the assessment order was also served upon theassessee through affixture. Therefore, the appeal preferred!before the learned CIT(Appeals) was clearly time barred and noreasonable cause has been explained for filing the appealbelatedly before the learned CIT(Appeals). The learned CIT(Appeals) was thereafter, justified in holding the appeal to betime barred and dismissed the same. The learned counsel forthe assessee further submitted that even if notice was served byaffixture, no sufficient time has been given to the assessee to represent the case before the Assessing Officer because onlytwo days time was left after affixture of the notice on24.11.2007 for proceedings before the Assessing Officer on26.11.2007. However the assessee has not explained as to whythe assessee did not make any effort before the AssessingOfficer to represent the case for filing the appeal on time beforethe learned CIT(Appeals). No material is produced before us tosubstantiate any contention raised before us. We therefore, donot find any merit in this appeal of the assessee. No othereround on merit has been raised because the appeal wasdismissed by the learned CIT(Appeals) holding the appeal timebarred.” represent the case before the Assessing Officer because onlytwo days time was left after affixture of the notice on24.11.2007 for proceedings before the Assessing Officer on26.11.2007. However the assessee has not explained as to whythe assessee did not make any effort before the AssessingOfficer to represent the case for filing the appeal on time beforethe learned CIT(Appeals). No material is produced before us tosubstantiate any contention raised before us. We therefore, donot find any merit in this appeal of the assessee. No othereround on merit has been raised because the appeal wasdismissed by the learned CIT(Appeals) holding the appeal timebarred.” |. |The view adopted by the Tribunal is a plausible view based onappreciation of material on record and, therefore, does not warrant anyinterference by this Court. Learned counsel for the appellant|has not beenable to show any illegality or perversity in the impugned order. Thus, nosubstantial question of law arises. Consequently, the appeal standsdismissed. (Ajay Kumar Mittal) Judge| November 20, 2015 (Ramendra Jain) =gS’ Judge