Income Tax Appellate Tribunal - Agra
Sanjeev Prakash Mittal, Huf., Agra vs Department Of Income Tax on 19 March, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL,
AGRA BENCH, AGRA
BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND
SHRI A.L. GEHLOT, ACCOUNTANT MEMBER
ITA No. 560/Agra/2012
Asstt. Year : 2000-01
Asstt. /Dy. C.I.T., vs. Late Sri Satish Prakash Mittal,
Central Circle, Agra. Through L/h Smt. Sheela Rani Mittal,
29-30, Ganesh Nagar, Firozabad.
(PAN: ABWPM 1075 G)
C.O. No. 06/Agra/2013
(in ITA No. 560/Agra/2012)
Asstt. Year : 2000-01
Late Sri Satish Prakash Mittal, vs. Asstt. /Dy. C.I.T.,
Through L/h Smt. Sheela Rani Mittal, Central Circle, Agra.
29-30, Ganesh Nagar, Firozabad.
ITA No. 561/Agra/2012
Asstt. Year : 2000-01
Asstt. /Dy. C.I.T., vs. Shri Satish Prakash Mittal (HUF),
Central Circle, Agra. 29-30, Ganesh Nagar, Firozabad.
(PAN: AABHS 6307 P)
C.O. No. 07/Agra/2013
(in ITA No. 561/Agra/2012)
Asstt. Year : 2000-01
Shri Satish Prakash Mittal (HUF), vs. Asstt. /Dy. C.I.T.,
29-30, Ganesh Nagar, Firozabad. Central Circle, Agra.
ITA No. 554/Agra/2012
Asstt. Year : 2000-01
Asstt. /Dy. C.I.T., vs. Shri Sanjay Prakash Mittal,
Central Circle, Agra. 29-30, Ganesh Nagar, Firozabad.
(PAN: ADDPM 9611 R)
2 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012
C.O. No. 04/Agra/2013
(in ITA No. 554/Agra/2012)
Asstt. Year : 2000-01
Shri Sanjay Prakash Mittal, vs. Asstt. /Dy. C.I.T.,
29-30, Ganesh Nagar, Firozabad. Central Circle, Agra.
ITA No. 555/Agra/2012
Asstt. Year : 2000-01
Asstt. /Dy. C.I.T., vs. Smt. Sheela Rani Mittal,
Central Circle, Agra. 29-30, Ganesh Nagar, Firozabad.
(PAN: AJOPM 1130 G)
C.O. No. 08/Agra/2013
(in ITA No. 555/Agra/2012)
Asstt. Year : 2000-01
Smt. Sheela Rani Mittal, vs. Asstt. /Dy. C.I.T.,
29-30, Ganesh Nagar, Firozabad. Central Circle, Agra.
ITA No. 556/Agra/2012
Asstt. Year : 2000-01
Asstt. /Dy. C.I.T., vs. Smt. Ragini Mittal,
Central Circle, Agra. W/o Shri Sanjeev Prakash Mittal,
29-30, Ganesh Nagar, Firozabad.
(PAN: AJOPM 1131 H)
C.O. No. 09/Agra/2013
(in ITA No. 556/Agra/2012)
Asstt. Year : 2000-01
Smt. Ragini Mittal, vs. Asstt. /Dy. C.I.T.,
W/o Shri Sanjeev Prakash Mittal, Central Circle, Agra
29-30, Ganesh Nagar, Firozabad.
3 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012
ITA No. 557/Agra/2012
Asstt. Year : 2000-01
Asstt. /Dy. C.I.T., vs. Shri Sanjeev Prakash Mittal,
Central Circle, Agra. 29-30, Ganesh Nagar, Firozabad.
(PAN: AHHPM 6020 C)
C.O. No. 02/Agra/2013
(in ITA No. 557/Agra/2012)
Asstt. Year : 2000-01
Shri Sanjeev Prakash Mittal, vs. Asstt. /Dy. C.I.T.,
29-30, Ganesh Nagar, Firozabad. Central Circle, Agra.
ITA No. 558/Agra/2012
Asstt. Year : 2000-01
Asstt. /Dy. C.I.T., vs. Shri Sanjeev Prakash Mittal (HUF),
Central Circle, Agra. 29-30, Ganesh Nagar, Firozabad.
(PAN: AABHS 6304 Q)
C.O. No. 03/Agra/2013
(in ITA No. 558/Agra/2012)
Asstt. Year : 2000-01
Shri Sanjeev Prakash Mittal (HUF), vs. Asstt. /Dy. C.I.T.,
29-30, Ganesh Nagar, Firozabad. Central Circle, Agra.
ITA No. 559/Agra/2012
Asstt. Year : 2000-01
Asstt. /Dy. C.I.T., vs. Shri Sanjay Prakash Mittal (HUF),
Central Circle, Agra. 29-30, Ganesh Nagar, Firozabad.
(PAN: AAFHS 9534 L)
4 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012
C.O. No. 05/Agra/2013
(in ITA No. 559/Agra/2012)
Asstt. Year : 2000-01
Shri Sanjay Prakash Mittal (HUF), vs. Asstt. /Dy. C.I.T.,
29-30, Ganesh Nagar, Firozabad. Central Circle, Agra.
(Appellants) (Respondents)
Revenue by : Shri Waseem Arshad, Sr. D.R.
Assessee by : Shri Sahib P. Satsangee, C.A.
Date of hearing : 19.03.2013
Date of pronouncement of order : 04.04.2013
ORDER
Per Bhavnesh Saini, J.M.:
All the departmental appeals and cross-objections above in the case of various assessees are directed aginst the common order of ld. CIT(A)-I, Agra dated 22.06.2012 for the assessment year 2000-01.
2. The Revenue in all the departmental appeals against various assessees challenged the deletion of addition of Rs.10,00,000/- made on account of unexplained gifts u/s. 68 of the IT Act whereas all the the assessees have filed their cross-objections challenging the impugned order of ld. CIT(A) in confirming the validity of reopening of the assessment u/s. 147 of the IT Act. During the course of arguments, it was elaborated that the assessee challenged the validity of reopening of assessments - that there was no escapement of income; that there was no failure on the part of the assessee to disclose all the true and material facts relating to 5 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 assessment and that assumption of jurisdiction by the AO u/s. 148 of the IT Act is bad in law because the notice u/s. 148 have not been issued and served upon the assessees validly in accordance with law.
3. The ld. representatives of both the parties submitted that the issues are same in all the departmental appeals and the cross-objections filed by the assessees and both the parties mainly argued in the case of Late Shri Satish Prakash Mittal in ITA No. 560/Agr/2012 and cross-objection No. 06/Agra/2013 and submitted that issues and facts are identical in the remaining cases. Therefore, for the purpose of disposal of all the above matters of different assessees, we take up the case in the name of assessee, Late Shri Satish Prakash Mittal.
ITA No. 560/Agra/2012 & C.O. No. 06/Agra/2013:
(Late Shri Satish Prakash Mittal):
4. Briefly, the facts of the case are that the return of income was filed on 28.03.2001 at income of Rs.3,68,969/-. Assessment was completed at an income of Rs.8,68,969/- u/s. 143(3)/147 on 30.03.2006 after making addition of Rs.5,00,000/- on account of unexplained gift received from Shri Sanjay Mohan Agarwal. However, the addition has been deleted by the ld. CIT(A)-II, Agra. Thereafter information was received from Investigation Wing, Ghaziabad that the assessee had taken accommodation entry of Rs.10,00,000/- in the shape of gift from same 6 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 Shri Sanjay Mohan Agarwal, New Delhi. On receipt of this information from the Investigation Wing, a notice u/s. 148 dated 30.03.2007 was issued after recording the reasons and taking necessary approvals at 33-Circular Road, Firozabad. The notice was sent through registered post/speed post but the same was received back un-served with the remarks of the postal authorities "addressee is not available on the given address". Thereafter notice was served by affixture on 03.04.2007 at the same address, but the assessee has not filed return of income in response to notice u/s. 148 of the IT Act. Notice u/s. 142(1) dated 07.11.2008 was issued to the assessee calling for the details and information of the gift and the case was fixed for 20.11.2008. On 20.11.2008, the assessee raised objections regarding proceedings u/s. 148 mainly for issuance and service of notice within the statutory period. The assessee requested for supply of copy of reasons and inspection of record. The AO intimated the assessee that only requirement u/s. 149 is issuance of notice u/s. 148 within six years from the end of the relevant assessment year, which in this case was 31.03.2007 and notice u/s. 148 has been issued on 30.03.2007. The photocopy of notice u/s. 148 was also given to the assessee along with letter by the AO. The AO rejected the objections of the assessee regarding issuing and service of notice u/s. 148 of the IT Act and the AO held that the proceedings u/s. 148 have been validly initiated. The information u/s. 133(6) and summons u/s. 131 were issued to the donor Shri Sanjay Mohan Agarwal, but these notices received un-served with the remarks of the Postal Authorities "left". The 7 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 AO considering the material on record found that donor not only had given gift to the assessees but also to other persons through his various bank accounts and the assessee has failed to discharge the onus upon him to prove the identity of the donor, his capacity to give gift and genuineness of the gift in the matter. The AO, therefore, held the gift of Rs.10,00,000/- to be unexplained u/s. 68 of the IT Act and computed the income of the assessee accordingly at Rs.13,68,969/-. The assessee challenged the validity of re-assessment proceedings before the ld. CIT(A) as well as the addition on merits. The ld. CIT(A) considering the material on record confirmed the order of the AO in initiating the proceedings u/s. 147/148 of the IT Act and dismissed this ground of appeal of the assessee. However, on merits, the ld. CIT(A) allowed the appeal of the assessee holding that the assessee has established the identity of the donor, his creditworthiness and genuineness of the transaction of gift by producing necessary evidences. Therefore, the additions on merits were deleted in all the cases of various assessees. Thus, all the appeals of the assessees were partly allowed through common impugned order dated 22.06.2012. The Revenue as well as the assessee are in appeal and cross objections above, feeling aggrieved against the findings of the ld. CIT(A) in holding so.
5. We have heard the ld. representatives of both the parties, perused the findings of authorities below and considered the material available on record. 8 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012
6. Before considering the issue on merit, it would be appropriate to take up the legal issue first regarding validity of initiation of proceedings u/s. 148 of the IT Act, which is raised in the cross-objection of the assessee. 6.1. After hearing the arguments of ld. Representatives of both the parties, we find that four points have arisen for consideration and adjudication with regard to validity of the reassessment proceedings u/s. 147/148 of the IT Act, which we deal with them as under :
(1). "Whether the AO has validly initiated the re-assessment proceedings u/s. 147/148 of the IT Act."
(2). "Whether the case of the assessee would fall in proviso to section 147 of the IT Act."
(3). "Whether notice u/s. 148 dated 30.03.2007 was issued within six years from the end of the relevant assessment year as per section 149 of the IT Act."
(4). "Whether there was any valid service of notice u/s. 148 of the IT Act upon the assessee."
7. It would be relevant to reproduce the relevant provisions of law dealing with the above legal issue of validity of initiation of re-assessment proceedings u/s. 147/148 of the IT Act.
7.1. Section 147 of the IT Act provides as under :
9 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012
147. If the Assessing Officer, 1523[has reason to believe] that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year:
Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 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:
Provided further that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matter of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.
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 Assessing Officer 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 10 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 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.
(c) Where an assessment has been made, but-
(i) income chargeable to tax has been
under assessed; or
(ii) such income has been assessed at too
low a rate; or
(iii) such income has been made the
subject of excessive relief under this
act; or
(iv) excessive loss or depreciation
allowance or any other allowance
under this act has been computed."
Explanation 3 : For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148.
Explanation 4.--For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012.
7.2 Section 148 of the IT Act provides as under :
148 (1). Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as 11 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139:
Provided that in a case--
(a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and
(b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice:
Provided further that in a case--
(a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and
(b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.
Explanation : For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall 12 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.
7.3 Section 149 of the IT Act provides as under :
"149. (1) No notice under section 148 shall be issued for the relevant assessment year,--
(a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c);
(b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year;]
(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.] Explanation.--In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.
(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.
(3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-
resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year.
Explanation.--For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance 13 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012."
POINT No. 1 : "Whether the AO has validly initiated the re-assessment proceedings u/s. 147/148 of the IT Act."
8. According to the AO, the assessee filed original return of income on 28.03.2001 at income of Rs.3,68,969/-. Copy of the acknowledgement of the return of income along with annexures are filed in the paper book at CPB-119 to 122, in which the assessee has declared all the particulars and information of receipt of gift of Rs.15,00,000/-. The assessment was completed at income of Rs.8,68,969/- u/s. 143(3)/147 vide order dated 30.03.2006 after making addition of Rs.5,00,000/- on account of unexplained gift received from Sh. Sanjay Mohan Agarwal. The said addition was deleted by the ld. CIT(A)-II, Agra vide order dated 24.04.2008. It is noted in this assessment order that information was received from ADIT (Inv.) that Shri Sanjay Mohan Agarwal of New Delhi is involved in giving bogus gifts by cheques/DDs in lieu of cash received from the intended beneficiaries. In the subsequent impugned reassessment order, under appeal, dated 10.12.2008 the same fact finds mention that information was received from the investigation wing, Ghaziabad that the assessee has taken gift of Rs.10,00,000/- from similar donor Shri Sanjay Mohan Agarwal, New Delhi in respect of the same assessment year under appeal. Therefore, all the facts of declaration of gift from the same donor were available to the Revenue Department prior to information received from the 14 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 investigation wing, Ghaziabad. Apart from the above, since, the assessee has already declared receipt of gift of Rs.15,00,000/- in the original return of income from the same donor Shri Sanjay Mohan Agarwal, therefore, all the details and relevant facts of receipt of gift amount of Rs.15,00,000/- were disclosed to the Revenue Department even prior to the initiation of the re-assessment proceedings. Thus, the assessee disclosed all the primary facts of receipts of gift from the donor. When first re-assessment order for the same assessment year under appeal dated 30.03.2006 was passed, the information of receipt of gift from the same donor Shri Sanjay Mohan Agarwal was in issue and at that time the information was received of the gift in question from ADIT (Inv.), Agra through JCIT, Range-5, Firozabad. It is, thus, unbelievable that the AO at the time of passing of the first re-assessment order dated 30.03.2006 was not aware of the entire gift amount of Rs.15,00,000/- received by the assessee from the donor Shri Sanjay Mohan Agarwal. The AO thus examined all the material before him at the original re-assessment proceedings in respect of the gift received from Shri Sanjay Mohan Agarwal and the issue was also considered in detail by the ld. CIT(A) while deleting the impugned addition of Rs.5,00,000/- on account of gift received from the same donor vide appellate order dated 24.04.2008. The AO on the basis of information received from investigation wing, Ghaziabad intended to again re-assess the income of assessee on account of part of the gift of Rs.10,00,000/- received from same donor in same assessment year, and the letter of ADIT (Inv.), Ghaziabad was received on 21.03.2007. The 15 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 AO asked the Branch Manager, Vijaya Bank to give some details and thereafter on 30.03.2007 allegedly issued notice u/s. 148 of the IT Act against the assessee. The AO recorded the following reasons for re-opening of the assessment which are reproduced as under :
REASONS "The Addl. Director of Income Tax (Inv.),Ghaziabad vide letter F. No. Addl. DIT (Inv.)/GZB/AES/SM/Bogus Gifts/1/2006-07/796 dated 16.03.2007 endorsed vide F.No. Addl. CIT/R- 5/Firozabad/Information/2006-07 dated 21.03.2007 of the Addl. Commissioner of Income-tax, Range-5, Firozabad has informed that one Sh.Sanjay Mohan Agarwal, 4674, Shora Kothi, Pahar Ganj, New Delhi was engaged in providing accommodation entries by way of gift to the needy persons. A list of the persons who have taken accommodation entries from him was also enclosed with the said letter of Addl. DIT(Inv). Consequently, inquiries were conducted from Vijaya Bank, Firozabad and it was gathered that the assessee has taken accommodation entry of Rs.10,00,000/- by way of gift vide D.D. No.005105 dated 04.11.99.The said D.D. has been credited to the saving bank account of the assessee maintained with Oriental Bank of Commerce, Firozabad. The assessee has thus introduced his own unaccounted income in the garb of a gift just to get away from payment of tax on that unaccounted income, which was clearly liable to tax as per provisions of I.T. Act. No amount of DD credited to the bank account of the assessee has been added to the income of the assessee as per order u/s. 143(3) dated 27.03.2006. I have, therefore, in view of the information available with this office, reason to believe that income to the extent of Rs.10,00,000/- has escaped assessment within the meaning of section 147 of the Income-tax Act."
ACIT, Circle-5, Firozabad.
8.1 The order sheet recorded by the AO from 21.03.2007 to 09.04.2007 is filed at page 53 of the paper book and is reproduced as under :16 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012 21.3.2007. The letter F.No. CIT-II/Agra/ACIT (Hq.) Misc./2006-07/6660 dated 19.03.2007 regarding accommodation entries together with copy of letter dated 16.03.2007 of Addl. DIT (Inv.), Ghaziabad received.
22.03.2007. The Branch Manager, Vijaya Bank, Firozabad required to furnish details of D.D. through which accommodation entry was taken.
23.03.2007. Letter Ref. No.- Nil dated 23.03.2007 enclosing copy of D.D. No.005375 dated 18.11.1999 received from Vijaya Bank and placed on file.
Report regarding correct name of persons who have taken accommodation entries submitted to the Addl. CIT, Range-5, Firozabad.
On verification from Demand and Collection register assessment in this case was completed u/s. 143(3)/147 on 27.03.2006.
Proposal u/s. 151 seeking approval for issue of notice u/s. 148 sent to CIT-II Agra vide letter F.No. ACIT/Cir.-
5/FZD/151/2006-07/dated 23.03.2007.
30.03.2007. Approval u/s. 151 of CIT-II for issue of notice u/s. 148 vide letter F.No. Proposal u/s.148/Addl. CIT/R-5/FZD/2006-07/827 dated 29.03.2007.
Notice u/s. 148 issued.
The Inspector of Income-tax reported that assessee does not reside at the given address i.e., 33, Circular Road, Firozabad. He is accordingly directed to effect service by affixture. 03.04.2007. The Inspector of Income-tax returned notice with a report thereon after having affixed copy of notice u/s. 148.
17 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012 09.04.2007. Envelop containing notice u/s. 148 received back and placed on record.
8.2 The ld. CIT(A) at page 40 of the appellate order after going through the assessment record of all the above assessees noted that as per record, letter dated 19.03.2007 was received by the AO on 21.03.2007 forwarding report of Addl. DIT (Inv.), Ghaziabad dated 16.03.2007 providing the details of accommodation entries of bogus gifts received by all eight assessees. Though names of some of these persons were not mentioned correctly in the said report, these names were got verified by the AO from the concerned bank, in which the bank account of these persons were maintained and it has been confirmed by the Bench that all the eight assessee's have received gift amounts. From the findings of the ld. CIT(A), it is clear that ADIT (Inv.), Ghaziabad has provided some vague information regarding accommodation entries received by the assessees. The assessee has filed copy of the remand report dated 30.04.2012 issued by DCIT (Inv.), Ghaziabad (PB-141), in which while filing the remand report regarding the assessees, the DCIT has mentioned that record of investigation wing have been verified and no such records regarding investigation in the case of S.M. Agarwal have been found. He has referred to letter of ADIT (Inv.), Ghaziabad dated 16.03.2007 addressed to CIT(A)-II, Agra that DD/Cheques have been issued to the beneficiaries through Vijaya Bank, Anasari Road, New Delhi and that the Assessing Officer can call for the record from the Bank. The ld. CIT(A) while finalizing of the appeals of the 18 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 assessee recorded the order sheet and the relevant order sheet of dt. 20.06.2012 is filed by the assessee at page 148 of the paper book and the relevant entry contained in the order sheet dated 20.06.2012 is reproduced as under :
"As regard to merit of case, the assessee has filed PAN Card and voter identity Card to establish the identity of the donor, assessment order u/s. 143(3) assessing at crores of rupees to prove the creditworthiness and gift deed has been filed to prove the genuineness of the gift. AO could not produce any evidence to prove these documents filed by the assessee as false. Even the materials claimed to have been collected during the investigation of Sanjay Mohan Agarwal showing that gift was given to the assessee out of cash deposited by him in the account of Shri Agarwal. It was shown that in the account from which gift was issued , there was no cash deposit. AO expressed his inability to provide any evidence to show that gift was given out of cash deposit made by the assessee because such details are neither available with the Investigation Wing, Ghaziabad when enquiry was conducted or in of the CIT-II, where the said material was claimed to have been sent."
8.3 The AO at the assessment stage issued letter u/s. 142(1) dated 07.11.2008 (copy filed at page 44 of the paper book) in which the AO called for information of the gift by the donor from the assessee. These facts, therefore, would clearly show that all information and details of gift received from Shri Sanjay Mohan Agarwal, donor were furnished to the Revenue Department not only in the original return of income, but in the first re-assessment proceedings u/s. 148 of the IT Act which culminated into assessment order dated 30.03.2006. Thus, information of gifts were verified and examined by the AO and part addition was made of gift of Rs.5,00,000/- which was ultimately deleted by the ld. CIT(A). The AO in the 19 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 remand report dated 30.04.2012 confirmed that no record relating to investigation in the case of Sanjay Mohan Agarwal have been found in the office of Investigation Wing, Ghaziabad. The ld. CIT(A) in the order sheet dated 20.06.2012 on filing the evidence by the assessee found that the assessee suitably established identity of the donor, his creditworthiness and genuineness of the gift in the matter. It was also found that the AO could not produce any evidence to prove that the evidence filed by the assessee were false. From the material claimed to be collected from the investigation of Shri Sanjay Mohan Agarwal also made it clear that no cash was deposited in his account prior to giving of the gift. The AO at the appellate stage expressed his inability to provide any evidence to show that the gift was given out of cash deposit made by the assessee because no such details wee available with the investigation wing, Ghaziabad. These facts would, therefore, clearly support the contention of the ld. counsel for the assessee that the reasons for reopening of assessment were incorrect and without any basis or material. The assessee has not introduced any unaccounted income for issue of DD of gift. Whatever information was received from the Investigation Wing, Ghaziabad, as per reasons recorded by the AO, was also incorrect because these information were already on record of the AO as on earlier occasion, re-assessment proceedings were finalized vide assessment order dated 30.03.2006. There was nothing new with the AO to show that the assessee has received any bogus accommodation entries or has introduced any unaccounted money. Thus, the reasons recorded for 20 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 reopening of the assessment were vague, incorrect and based on no material or evidence. Whatever is recorded in the reasons for reopening of assessment was not supported by the remand report dated 30.04.2012 filed by the investigation wing, Ghaziabad. The AO was thus, having no information or material to prove that the gift received by the assessee were mere accommodation entries because at the appellate stage, the AO was not able to contradict the evidences filed by the assessee for receipt of genuine gift in the matter and has expressed his inability to provide any evidence to contradict the claim of the assessee. Hon'ble Delhi High Court in the case of Signature Hotels P. Ltd. vs. ITO, 338 ITR 51 held -
"Held, allowing the petition, that the reassessment proceedings were initiated on the basis of information received from the Director of Income-tax (Investigation) that the petitioner had introduced money amounting to Rs.5 lakhs during financial year 2002-03 as stated in the annexure. According to the information, the amount received from a company, S, was nothing but an accommodation entry and the assessee was the beneficiary. The reasons did not satisfy the requirements of section 147 of the IT Act. There was no reference to any document or statement, except the annexure. The annexure could not be regarded as a material or evidence that prima facie showed or establishes nexus or link which disclosed escapement of income. The annexure was not a pointer and did not indicate escapement of income. Further, the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. There was no dispute that the company, S, had a paid up capital of Rs.90 lakhs and was incorporated on January 4, 1989, and was also allotted a permanent account number in September, 2001. Thus, it could not be held to be a fictitious person. The reassessment proceedings wee not valid and were liable to be quashed."21 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012 8.4 Considering the facts of the case in the light of above decision, it is clear that there was no specific or reliable information received from investigation wing, Ghaziabad about escapement of income and no record of the donor was available with the investigation wing to prove that he was providing accommodation entries. Even according to the ld. CIT(A), the names of some of the assessees were not correctly mentioned in the report of Investigation Wing, Ghaziabad. The AO merely called for the names of the assessees from Vijaya Bank. Therefore, the information received from the investigation wing, Ghaziabad was nothing. The reasons did not satisfy the requirement of section 147 of the IT Act. There was no reference to any document or material with the report of investigation wing, Ghaziabad. Thus, the same could not be regarded as a material or evidence that prima facie showed nexus or link which discloses the escapement of income. The letter of investigation wing, Ghaziabad did not point out the fact that there was any escapement of income in the case of assessee. Therefore, it is clear that the AO did not apply his own mind to the vague information and did not examine the basis or material, if any, to support such information. The decision of Hon'ble Delhi High Court in the case of Signature Hotels Pvt. Ltd. (supra), thus, squarely apply to the facts and circumstances of the case. The ld. DR, however, relied upon the decision of Hon'ble Delhi High Court in the case of Rajat Export Import India Pvt. Ltd. vs. ITO, 18 Taxman.com 311, in which the assessee was not in a position to deny that the material relied upon by the AO at the time of recording the reasons for 22 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 reopening of assessment did not contain entry linking S. Ltd. with the assessee, issue of notice u/s. 148 on prima facie belief that the income chargeable to tax had escaped assessment was held to be valid. The decision relied upon by the ld. DR is clearly distinguishable on facts of the present case as noted above because in the remand report of the investigation wing, the investigation wing, Ghaziabad did not find any record of investigation conducted in the case of donor Shri Sanjay Mohan Agarwal of giving bogus accommodation entry and the order sheet of the ld. CIT(A) dated 20.12.2012 (supra) supports the case of the assessee that there was genuine gift in the matter. In other cases where 143(1) is done all information of gift disclosed in original return. Therefore, there was no prima facie belief available to the AO to say that there was any escapement of income. There is no reason to believe as required by section 147. Considering the above discussion, we are of the view that there was no justification for the AO to have initiated the re- assessment proceedings u/s. 147/148 of the IT Act. The re-assessment order is, therefore, liable to be quashed. This point is, therefore, decided in favour of the assessee and against Revenue.
POINT No. 2 : "Whether the case of the assessee would fall in proviso to section 147 of the IT Act."
9. The proviso to section 147 of the IT Act provides that where the assessment u/s. 143(3) or this section (147) has been made for the relevant assessment year, no 23 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 action shall be taken under this section after expiry of four years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment for such assessment order by reason of the failure on the part of the assessee to make a return u/s. 139 or in response to notice issued under section 142(1) or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. It is admitted fact that the assessee filed original return of income on 28.03.2001 disclosing all the primary fact of receipt of gift amount of Rs.15,00,000/- from the donor, Shri Sanjay Mohan Agarwal. The same return was subjected to re-assessment proceedings u/s. 143(3)/147 vide assessment order dated 30.06.2006. the AO made addition of Rs.5,00,000/- in respect of the gift received from Shri Sanjay Mohan Agarwal in November, 1999 itself. Said addition was deleted by the ld. CIT(A) vide order dated 24.04.2008. Thus, there was no failure on the part of assessee to file return u/s. 139 or u/s. 148 of the Act. There was no non-compliance of notice u/s. 142(1) of the IT Act. The assessee disclosed all primary facts and the AO examined the information received from investigation wing regarding the gift received by the assessee from the donor Shri Sanjay Mohan Agarwal and in the same month of November, 1999, gift of Rs.10,00,000/- was also received from the same donor which is under consideration of the present appeal. It is highly unbelievable that the AO while considering the issue of gift received from Sanjay Mohan Agarwal, donor would not have examined the issue of receipt of gift in detail because the assessee has 24 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 disclosed receipt of Rs.15,00,000/- as gift from Shri Sanjay Mohan Agawal, donor in the original return of income itself. Thus, the assessee disclosed fully and truly all material facts necessary for his assessment for the assessment year under appeal. The four years have expired from the end of the relevant assessment order on 30.03.2007 when again reassessment proceedings wee initiated against the assessee. The ld. counsel for the assessee relied upon the order of ITAT, Jabalpur, Third Member Bench in the case of ACIT vs. Vindhya telelinks Ltd., 107 TTJ (Jab.) (TM) 149, in which it was held -
"AO having reopened the assessment by forming the belief that assessee's income has escaped assessment merely on perusal of facts already on record and nowhere stated in the reasons recorded by him that there was any failure on the part of the assessee to furnish any material fact which was necessary for the assessment, reopening of assessment after expiry of four years was not valid.
9.1 He has also relied upon the decision of Hon'ble Delhi High Court in the case of Haryana Acrylic Manufacturing Co. vs. CIT, 308 ITR 38 (Del.), in which it was held -
"There being no whisper in the reasons supplied to assessee that income escaped assessment by reason of assessee's failure to make a full and true disclosure of all material facts necessary for assessment, notice under s. 148 issued beyond four years from the end of relevant assessment year was barred by limitation under proviso to s. 147, hence, without jurisdiction."
9.2. Hon'ble Bombay High Court in the case of Multiscreen Media P. Ltd. vs. Union of India & Another (No. 1), 324 ITR 48 held -
25 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012 "Held, allowing the petition, that the notice did not state that thee had been any failure to disclose material facts at the time of the original assessment. The ground furnished in the notice for re- assessment would indicate that according to the Assistant Commissioner of Income-tax, allocation of expenses as between the petitioner and the foreign principal ought to have been originally considered by the Assessing Officer when the order of assessment was passed under section 143(3). That however would not give a valid reason to reopen the assessment beyond a period of four years. The notice was not valid and was liable to be quashed.
9.3 Hon'ble Gujrat High Court in the case of Gujrat State Co-Op. Agri. And Rural Develop. Bank Ltd. vs. DCIT, 337 ITR 447 held -
"Held, allowing the petition, that the sole basis for reopening the assessment was the subsequent decision of the High Court. The belief as to escapement of income chargeable to tax from assessment was not entertained by the Assessing Officer on the ground that there had been failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment and no proceedings could have been initiated under section 148 of the Income-tax Act, 1961, after the expiry of a period of four years from the end of the relevant assessment year. Thus, the initiation of reassessment proceedings was barred by limitation and the assumption of jurisdiction by the Assessing Officer was invalid. The notice under section 148, therefore, could not be sustained."
9.4 Hon'ble Madras High Court in the case of Sri Sakthi Textiles Ltd. vs. JCIT and Another, 340 ITR 144 (Mad.) held -
"That the notices in respect of assessment years 1991-92 and 1992-93 were issued after four years. There was no mention in the recorded reasons that the escapement of chargeable income from tax was due to omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The notices in respect of the assessment years 1991-92 and 1992-93 issued 26 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 under section 148 read with section 147 of the Act were wholly without jurisdiction and, therefore, they were liable to be quashed."
9.5 Considering the above discussion, in the light of above decisions, it is clear that the assessee has disclosed fully and truly all material facts necessary for his assessment for the assessment year under appeal, upon which regular reassessment order was passed prior to the impugned re-assessment, therefore, initiation of re- assessment proceedings again after expiry of four years from the end of the relevant assessment year is invalid, bad in law and is wholly unjustified. In the reasons u/s. 148 and notice u/s. 148 dt. 30.03.2007, AO has nowhere recorded that the escapement of chargeable income from tax was due to omission or failure on part of the assessee to disclose fully and truly all material facts necessary for assessment. The reassessment order is, therefore, liable to be quashed on this ground as well. Point No. 2 is, therefore, decided in favor of the assessee and against the Revenue.
POINT No. 3 : "Whether notice u/s. 148 dated 30.03.2007 was issued within six years from the end of the relevant assessment year as per section 149 of the IT Act."
10. According to the AO, notice dated 30.03.2007 u/s. 148 was issued to the assessee at 33 Circular Road, Firozabad. The AO gave this notice to the Income- tax Inspector for service and Income-tax Inspector reported on the same day on 27 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 30.03.2007 that the assessee does not reside at the above given address. According to the AO, he has, therefore, directed the Inspector to effect service by affixture. The Inspector gave his report that the main door/gate of 33 Circular Road, Firozabad is made of iron channel, hence, this notice cannot be pasted at this channel gate/door and hence on the left side of the wall of entrance hall, the notice was affixed in presence of Shri Ram Kumar S/o Shri Dushyant Kumar R/o 35, Nai Basti, Firozabad. The service by affixture was made on 03.04.2007. It is admitted fact that no notice by registered post was issued on 30.03.2007 to the assessee. The notice dated 30.03.2007 was sent through registered post only on 03.04.2007. The entire order sheet recorded by the AO from the day of receipt of the information from investigation wing, Ghaziabad and issue of notice u/s. 148 u/s. 148 is reproduced above. In the order sheet dated 30.03.2007, it is not recorded that notice u/s. 148 dated 30.03.2007 was given to Income-tax Inspector for the purpose of service. No notice u/s. 148 dated 30.03.2007 was issued to the assessee by post despite it was a working day and Income Tax Office was opened. The notice was also not given to the process server of the department for the purpose of service upon the assessee. No outward Dak register was produced to show notice dated 30.03.2007 was actually issued by the AO on the same day. No other corroborative evidence was produced to show that the AO issued notice on the same day on 30.03.2007. The ld. CIT(A) examined and considered the issue of service of notice through Inspector in detail and the theory of service by affixture was not found 28 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 justified. The finding of the ld. CIT(A) on this aspect is mentioned at page 48 of the appellate order as under :
"As the report of the Inspector has not been found to be verified through an affidavit and also the witness to the service of notice whose name is given in the report has not been found to be traceable to get a confirmation from such witness that the disputed notice was actually served by affixture on 03.04.2007 or not, the claim of the AO about service of the disputed notice has not been found to be substantiated. Under these facts and circumstances and considering that all due procedure as prescribed for service of notice by affixture has not been followed and the witness to affixture has not been found to be traceable, the initials service of notice by affixtures as claimed by the AO has not been found to be reliable."
11. The above findings of the ld. CIT(A) have not been challenged by the Revenue Department in the departmental appeals. Therefore, it is proved on record that the theory of service of notice by affixture was wholly unreliable and unjustified and would not support the case of the AO. Even for the sake of arguments, it may be believed that Inspector has gone to the residence of assessee at 33, Circular Road, Firozabad, the address mentioned in the notice u/s. 148 dated 30.03.2007 and the Inspector gave report on the said notice that the assessee did not reside at the above given address, however, it was an incorrect address of the assessee for the purpose of service. Where was the necessity for the Assessing Officer to direct the Inspector for service of notice through affixture at the same incorrect address. The ld. counsel for assessee submitted that the AO passed the re- assessment order at the correct address of the assessee, i.e, 29-30, Ganesh Nagar, 29 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 Firozabad and also submitted that same address was available to the Revenue Department prior to issue of notice because the search was conducted in the case of assesses prior to 148 proceedings and during the course of search, statements were recorded on 14/15.09.2006 onwards and Panchnama was prepared in which the address of the assessee has been correctly shown as 29-30, Ganesh Nagar, Firozabad. The copies of the statements of the assessees and Panchnama are filed in the paper book at pages 99 to 115. The ld. counsel for the assessee, therefore, rightly contended that the correct address of the assessee was available to the Revenue Department prior to the reopening of the assessment. Since the correct address was available with the Revenue department on 14/15.09.2006, therefore, there was no need to mention incorrect address of the assessee in the notice u/s. 148 dated 30.03.2007 as 33, Circular Road, Firozabad. Thus, the last known address of the assessee was available to the Revenue Department, but neither the AO nor the Inspector nor other responsible Officer of the Revenue Department made any attempt to serve the assessee with the notice u/s. 148 at their correct address by issuing notice on 30.03.2007. The things would not end here because the report of the Inspector was clearly proved to be false, as the report of the Inspector stated that the notice was affixed at 33 Circular Road, Firozabad in the presence of Shri Ram Kumar S/o Shri Dushyant Kumar, 35, Nari Basti Firozabad. The assessee, however, filed affidavit before the AO(PB-71) of Shri Balbir Singh, S/o Shri Jayveer Singh, resident of 35 Nai Basti Firozabad who has affirmed in his 30 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 affidavit that he is residing at that address and no person by the name of Ram Kumar S/o Shri Dushyant Kumar was residing at his residence. The affidavit could not be rebutted by AO as per finding of ld. CIT(A). Therefore, the affidavit of Shri Balbir Singh also falsifies the report of the Inspector that the notice dated 30.03.2007 was taken by him at the incorrect address of the assessee for the purpose of service. The assessee also filed certificate of Head Post Office, Firozabad (PB-70), in which it is confirmed that the registered letter dated 03.04.2007 in the name of assessee was sent by ACIT, Firozabad which is delivered back on 09.04.2007, as the addressee was not residing at the given address. The ld. counsel for the assessee, therefore, rightly contended that no actual notice was issued on 30.03.2007 because the entire story of issue of notice through Inspector was manipulated by the Revenue Department to defeat the provisions of law. The ld. CIT(A) also at the appellate stage called for the corroborative evidences of issue of notice on 30.03.2007, but no evidence was produced by the AO. Since 30.03.2007 was a working day and even post office was not closed on 31.03.2007 and admittedly, no notice was issued to the assessee through registered post on 30.03.2007 would prove that actually no notice was issued to the assessee on 30.03.2007. The ld. counsel for the assessee rightly contended that it was manipulated affair of the AO to take the notice within the period of limitation because the AO at the assessment stage issued notice u/s. 142(1) dated 07.11.2008 seeking information from the assessee, which was sent at the correct address of the 31 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 assessee, i.e., 29-30, Ganesh Nagar, Firozabad, copy of which is filed at PB-44. It is not clarified by the AO as to how he has suddenly found the correct address of the assessee for the purpose of calling information from the assessee despite it was available to the AO prior to the issue of notice u/s. 148 being the correct address noted in the search proceedings. Hon'ble Gujrat High Court in the case of Kanu Bhai M. Patel (HUF) vs. Hiren Bhatt or His Successors to Office and Others, 334 ITR 25 held as under :
"On a plain reading of section 149 of the Income-tax Act, 1961, it is apparent that under the provision, the maximum time limit for issuance of notice under section 148 is six years from the end of the relevant assessment year. The expression "to issue" in the context of issuance of notices, writs and process, has been attributed the meaning. "to send out; to place in the hands of the proper officer for service. The expression "shall be issued" as used in section 149 would therefore, have to be read in the aforesaid context.
Held, allowing the petition, that in the instant case the notices under section 149 were in respect of the assessment year 2003-04. The notices were dated March 31, 2010. the record produced before the court showed that the notices had been sent for booking to the speed post centre only on April 7, 2010, in the absence of any evidence to the contrary being pointed out by the respondents, as well in the light of the fact that the said position as confirmed by the postal department had not been contraoverted by the Revenue. In the circumstances, the notices under section 148 in relation to the assessment year 2003-04, having been issued on April 7, 2010 which was clearly beyond the period of six years from the end of the relevant assessment year, were clearly barred by limitation and could not be sustained."
The ld. DR, however, relied upon the decision of Hon'ble Supreme Court in the case of R.K. Upadhyaya vs. Shanabhai P. Patel, 166 ITR 163 in which there was 32 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 no dispute that the notice u/s. 147(b) of the IT Act was issued by registered post on 31.03.1970 and was received by the assessee on 03.04.1970. Therefore, it was held that the notice was issued within the period of limitation. We may also note here that the Revenue department also relied upon section 292BB of the IT Act, which is not applicable to the assessment year under appeal, i.e., 2000-2001 because it is applicable from 01.04.2008. Considering the above discussion and in the absence of any corroborative evidence and considering the facts and circumstances noted above, it is clear that no notice u/s. 148 dated 30.03.2007 was actually issued to the assessee on 30.03.2007 i.e. within the period of limitation. The story propounded by the AO casts a serious doubt in sending out the notice through Inspector or proper officer for service. Therefore, we are of the view that no valid notice has been actually issued u/s. 148 on 30.03.2007 within the period of limitation. Therefore, on this count also, the re-assessment proceedings are liable to be quashed. Point No. 3 is also decided in favour of the assessee.
POINT No. 4 : 'Whether there was any valid service of notice u/s. 148 of the IT Act upon the assessee."
12. The facts are same as noted above and it was clear that the Revenue never attempted to serve the notice u/s. 148 upon the assessee at the last known address despite being aware of the correct address of the assessee. According to the Revenue, the notice dated 30.03.2007 could not be served upon the assessee, 33 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 therefore, the copy of the notice u/s. 148 was given to the assessee along with the letter to comply the requirement of the notice. The ld. CIT(A) at page 48 of the appellate order with regard to service of photocopy of notice noted the contention of the assessee that photocopy of the notice along with the letter dated 20.11.2008 given by the AO would not save the proceedings to be declared void ab initio. The ld. CIT(A), however, did not agree with the submissions of the assessee becasuee under the scheme of reassessment u/s. 147, notice u/s. 148 should be issued within prescribed time as provided u/s. 149 of the IT Act. He has relied upon the decision of Hon'ble Delhi High Court in the case of CIT vs. Three Dee Exim Pvt. Ltd. 20 Taxman.com 146 in support of his finding that AO has validly served copy of notice u/s. 148 dated 30.03.2007 to the assessee before completing the assessment order. The ld. counsel for the assessee, however, contended that the aforesaid decision is not applicable to the facts and circumstances of the case. In the case of Three Dee Exim (supra), the facts were that the notice u/s. 148 was issued at the address other than the present address of the assessee. Further, the notice u/s. 142(1) was issued. In response to the said notice, the counsel for the assessee appeared before the AO and sought adjournment. On that date, the counsel was given a photocopy of the notice issued u/s. 148. By a letter, the assessee stated that the return originally filed by it may be treated as return filed in response to the notice u/s. 148 of the IT Act. After some queries, the assessment order was completed. It was found that during the re-assessment proceedings, no objections 34 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 were raised of any kind with regard to defect or irregularity in the notice. It was, therefore, held that since the assessee participated in the proceedings, therefore, it would constitute a valid service of notice. The ld. counsel for the assessee contended that in the case of assessee neither his counsel nor the assessee appeared at any time before the AO in re-assessment proceedings, because no valid notice was served upon the assessee. The assessee remained exparte u/s. 147 read with section 144 of the IT Act. The assessee never participated in the proceedings before the AO and when the notice u/s. 142(1) dated 07.11.2008 was issued at the correct address of the assessee, the assessee immediately objected to the validity of the service of notice and initiation of proceedings before the AO. The ld. counsel for the assessee, therefore, submitted that the decision relied upon by the ld. CIT(A) is, therefore, not applicable. On consideration of the facts, we agree with the contention of the ld. counsel for the assessee that the above decision of Hon'ble Delhi High Court is clearly distinguishable on facts. The AO in this case passed the assessment order on 10.12.2008 exparte u/s. 147/144 of the IT Act. The assessee did not participate in any proceedings before the AO and when notice dated 07.11.2008 was issued at the correct address of the assessee, the assessee immediately filed objection regarding the service of notice through affixture and initiation of re-assessment proceedings. The objection is raised by the assessee vide letter dated 20.11.2008 (PB-46) and the AO without waiting for further proceedings in the matter or to take the objections of the assessee to a logical end, 35 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 hurriedly passed the exparte assessment order within 20 days of the reply of assessee on dated 10.12.2008. The ld. CIT(A) at page 61 of the appellate order has also not approved the order of the AO and was of the view that in such circumstances, the assessment order may be set aside with direction to the AO to pass a fresh order after disposing of the objections of the assessee to the notice u/s. 148 by speaking order. The ld. CIT(A) was also of the view that since he has no power to set aside the assessment, therefore, at the best he could direct the AO to dispose of the objections of the assessee by speaking order. Such an observation of the ld. CIT(A) would clearly prove that the AO passed re-assessment order in most mechanical manner without applying mind to the facts and law. The initiation of the re-assessment proceedings and ultimately culminating into exparte assessment order in the facts and circumstances of the case, would throw serious doubts in the case set up by the AO against the assessee. Therefore, the facts of the case relied upon by the ld. CIT(A) are clearly distinguishable on facts. The ld. counsel for the assessee in support of his contention that when no notice has been served upon the assessee in accordance with law, the assessment order would be bad in law, illegal and not valid, relied upon the following decisions :
(i). CIT vs. Ramendra Nath Ghosh, 82 ITR 888 (SC) in which it was held that "in the absence of service of notice under s. 33B on assessee in accordance 36 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 with law, it could not be said that proper opportunity was given to the assessee to put forward his case".
(ii). Rameswar Sirkar vs. ITO, 88 ITR 374 (Cal.) in which it was held that "as no reasonable attempts were made to serve the assessee personally; service by affixation was not proper".
(iii). Chandra Agencies vs. ITO, 89 ITD 1 (Del.), in which it was held.
"Since the notices under s. 148 were affixed on three addresses but not on the last known address of the assessee which was available on record and these notices were affixed in the absence of any witness, there was no valid service either on the assessee-firm or on its partner and the assessment completed under s. 144/148 was not valid."
(iv). A.K. Kochandi & Ors. Vs. Agricultural ITO, 110 ITR 406 (Ker), in which it was held, "Assessment - Best judgment assessment - Validity - Notice not served on assessee in accordance with order V, rr. 17, 18 & 19 etc. - Ex parte assessment not valid."
(v). Bhagwan Devi Saraogi & Ors. Vs. ITO, 118 ITR 908 (Cal.), in which it was held, "Reassessment under s. 147 - Validity of notice under s. 148-A notice 37 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 under s. 148 without mentioning the status of assessee is invalid depriving the ITO of his jurisdiction to proceed under s. 147 and the question of validity of notice being pure question of law going to the root of the matter, can be raised at the time of hearing even if not specifically taken in the writ petition - If the authority concerned does not acquire jurisdiction in the absence of a valid notice being served, the entire proceeding will be without jurisdiction and void, and even consent on the part of the petitioner would confer no jurisdiction on the ITO and there cannot be any question of waiver".
(vi). CIT vs. Mintu Kalita, 253 ITR 334 (Gau.), in which it was held, "Service of notice under s. 148 for the purpose of initiating proceeding for reassessment is not a mere procedural requirement but it is a condition precedent to the initiation of proceedings for reassessment; in the absence of proof of service of notice, reassessment was not justified."
(vii). CIT vs. Eshaan Holding (P) Ltd., 344 ITR 541 (Del.) in which it was held as under :
"The CIT(A) has taken the correct view of the matter in holding that there was no valid service of notice u/s 148 and hence the reassessment proceedings are null and void. The record of the department already contained the new address of the assessee. Before issuing the notice under section 148 it was expected of the Assessing Officer to have checked up if there was any change of address, because valid service of a notice of reopening the assessment is a 38 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 jurisdictional matter and this is a condition precedent for a valid reassessment. The contention of the learned counsel for the assessee that the Act does not provide for a formal intimation of the change of address and therefore the only place where one would find if there has been a change in the address is the return of income (for later years) contains force.
So far as the presumption to be drawn u/s 27 of the General Clauses Act is concerned, it can be drawn only if the notice is properly addressed which is not the case here. The notice served by affixture is also not valid service because it was done at the old address, which is not the last-known address, as the new address has already been intimated to the department in the return of income filed for the assessment year 2003-04 and that is the last-known address.
It may be a case of bona fide mistake on the part of the Assessing Officer. However, a valuable right accrued to the respondent and, furthermore, when the tax effect is only Rs.4,13,210/- (as per the CBDT circular, appeals with tax effect upto Rs.4,00,000/- are not to be filed). Hence, no interference needed in the present appeal."
(viii). CIT vs. Hotline International (P) Ltd., 296 ITR 333 (Del.), in which it was held, "There was no valid service of notice under s. 148 where it was not tendered to assessee or his agent nor refused by them, no effort was made by serving officer to locate the assessee before affixation and notice sent by registered post was not accompanied by acknowledgement due, hence reassessment was bad in law".
(ix). CIT vs. Rajesh Kumar Sharma, 311 ITR 235 (Del.), in which it was held as under :
39 ITA Nos. 554 to 561/Agra/2012
C.O. Nos. 02 to 09/Agra/2012 "Service of notice under s. 148 to an employee of the assessee did not amount to service of notice on the assessee as there is nothing to suggest that the said employee was authorized to accept any notice on behalf of the assessee or was an agent of the assessee; service of notice by speed post was also not valid as the same was sent at an incorrect address and the Revenue has not shown that it was addressed correctly but the receipt prepared by the Postal Department was incomplete."
12.1 Considering the facts of the case in the light of the above decision, it is clear that correct address of the assessee was available to the Revenue at which address the assessment order has been passed by the AO and notice was issued u/s. 142(1) on 07.11.2008, therefore, no attempt has been made to serve the notice u/s. 148 upon the assessee at the last known correct address. Giving a copy of the notice u/s. 148 along with notice u/s. 142(1) at the fag end of the assessment proceedings without deciding the objections of the assessee in proper perspective would clearly throw serious doubts on the story of the AO of service of notice in accordance with law. Therefore, the ld. counsel for the assessee rightly contended that it is a manipulated story made up by the AO. The Inspector is his subordinate and no reasons have been given why the routine procedure of the service of notice through registered post or through process server have not been used in this case for the purpose of service of notice at the correct address of the assessee. No corroborative evidences were filed for actually issue of notice against the assessee at the correct address on 30.03.2007. Therefore, merely forwarding photocopy of notice at the fag end of assessment proceedings by the AO would clearly prove that the AO had 40 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 no intention to serve the assessee with notice validly in accordance with law and the procedure provided. Thus, assumption of jurisdiction by the AO u/s. 148 is wholly unjustified and bad in law in the facts and circumstances of this case. The ld. CIT(A) heavily relied upon the decision of Hon'ble Delhi High Court in the case of Three Dee Exim (supra), which is clearly distinguishable on the facts of the case. The decisions relied upon by the ld. counsel for the assessee squarely apply to the facts of the case. Therefore, there was no valid service of notice u/s. 148 of the IT Act or copy of notice on assessee in this case. We, therefore, hold that there is no valid service of notice u/s. 148 against the assessee in the facts of the case.
The AO, therefore, did not get jurisdiction to proceed against the assessee u/s. 147 of the IT Act. On this reason also, the reassessment proceedings are liable to be quashed. Point No. 4 is, therefore, decided in favour of the assessee. 12.2 Considering the findings given on all the four points above, we hold that there is no valid initiation of proceedings u/s. 148 of the IT Act. There is also no valid issue of notice u/s. 148 of the IT Act within the period of limitation, there is no failure on the part of the assessee to disclose all material facts necessary for assessment and that there is no valid service of notice upon the assessee of the notice u/s. 148 of the IT Act in accordance with law. The orders of the authorities below are, therefore, set aside and the proceedings u/s. 148 are quashed. Since the proceedings u/s. 148 have been quashed, therefore, all resultant additions made by 41 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 the AO would stand deleted on account of unexplained gift. Since the ld. CIT(A) has already deleted the additions on merits and after quashing of the reassessment proceedings, same would be deemed to be deleted. Therefore, the departmental appeals are left with academic discussion only, therefore, we do not propose to adjudicate the departmental appeals on merits.
No other point is argued or pressed.
13. In the result, cross objection of the assessee is allowed and departmental appeal is dismissed.
Remaining appeals and Cross-objections :
14. The remaining departmental appeals and the cross objections of the assessee are filed against the same common order of the ld. CIT(A), which is subject matter in appeal in the case of Shri Satish Prakash Mittal above. The ld. representatives of both the parties stated that facts are same in all the cases and in the case of Sheela Rani Mittal, the AO also passed assessment order u/s. 143(3) on dated 30.03.2006 as was done in the case of Satish Prakash Mittal. In the cases of remaining assessees, earlier the returns were processed u/s. 143(1) of the IT Act. Therefore, following the decision in the case of Satish Prakash Mittal, the cross-objection of the assessee shall have to be allowed in the case of Sheela Rani Mittal also. In the cases of other assessees except on point No. 2, the findings given on point No. 1, 3 42 ITA Nos. 554 to 561/Agra/2012 C.O. Nos. 02 to 09/Agra/2012 and 4 in the case of Satish Prakash Mittal (supra) would clearly apply in these cases for the purpose of quashing the re-assessment proceedings. In view of the above discussion and following the decision in the case of Satish Prakash Mittal, remaining departmental appeals are dismissed and the cross objections of the assessees are allowed.
15. In the result, all the cross objections of the assessee are allowed and all the departmental appeals are dismissed.
Order pronounced in the open court.
Sd/- Sd/-
(A.L. GEHLOT) (BHAVNESH SAINI)
Accountant Member Judicial Member
*aks/-
Copy of the order forwarded to :
1. Appellant
2. Respondent
3. CIT(A), concerned By order
4. CIT, concerned
5. DR, ITAT, Agra
6. Guard file Sr. Private Secretary
True copy