Income Tax Appellate Tribunal - Gauhati
Shri Bimal Paul, Silchar vs Income Tax Officer, Ward-1, Silchar on 6 October, 2023
IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI BENCH
VIRTUAL HEARING AT KOLKATA
BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT
AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
ITA No.211/GTY/2014
Assessment Year: 2010-11
&
ITA No.08/GTY/2016
Assessment Year: 2011-12
Bimal Paul, Income Tax Officer, Ward-1,
Prop. M/s. Lokenath Silchar, Assam
Enterprise Rice Market, Vs.
Fatak Bazar, Silchar-
788001, Assam
(PAN: AJMPP9568K)
(Appellant) (Respondent)
Present for:
Appellant by :None
Respondent by : Shri Arun Bhowmick, JCIT
Date of Hearing : 17.07.2023
Date of Pronouncement : 06.10.2023
ORDER
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
Both the captioned appeals filed by the assessee are against the separate orders of Ld. CIT(A), Shillong dated 15.05.2014 and 09.11.2015 against the separate assessment orders of ITO, ward-1, Silchar u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"), dated 12.03.2013 and 14.03.2014 for AYs 2010-11 and 2011-12.
2. Since the re are certain common issues in both the appeals filed by the assessee, therefore, we find it proper to deal with 2 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 both of them together by passing a consolidated order for the sake of brevity and convenience. The grounds of appeal taken by the assessee in both the appeals are reproduced as under:
Grounds of appeal for AY 2010-11:
"1. That on the f acts of the c ase and in la w Ld. C IT(A) h as erred in holding tha t the assessmen t order u/s .143(3) dated 12-03-2013 whic h was passed on 01-04- 2013 and served on 03-04-2013 was a valid order in spite of the same had no t been s igned by the Ld. AO and f ailure of the Ld. AO to serve the assess men t ord er with in a f or tnig ht of the date of assessmen t.
2. That the Ld. C IT (A) has erred in law and on f ac ts in jus tif ying pass ing of the as sessmen t order by the Ld. AO af ter f our teen wo rking d ays af ter th e d ate of las t he ar ing.
3. That on the f ac ts and in law the Ld. C IT(A) has erred in ho ld ing that the assessme nt order passed by the Ld. AO was n o t b arred by limita tion when th e assessmen t order u/s 143(3) dated 12-03-2013 was passed on 01-04 -2013 and served on the appellant on 03-04- 2013 ignor ing the f ac t that the amendmen t in sec tion 153(1) by the Finance Act, 201 2 was brought in the statu te book b ef o re 31-12- 2012.
4. That on the f acts and in the c irc u ms tances of the case the Ld. CIT( A) has erred in holding tha t the Ld. AO had no t suppressed disclosure made by the appe llant v ide h is le tte r dated 04-12 -2012 and that there was no bias appro ach by the Ld. AO.
5. That in law and on the f acts the Ld. C IT(A) has erred in ho ld ing the No tice of Demand which was not in the prescr ibed f or m and was a se lf prepared distor ted f orm and also in spite of f ailure of the Ld. AO to serve the no tice of demand with in a f or tnight of the date of assess men t to be valid at the s ame time adv is ing the Ld. AO to issue a f resh Demand Notic e in the prescr ibed f orm and ch allan.
6. T hat the Ld. CIT( A) h as disregarded CBDT Ins tr uction No. 20/2003 da ted 23-12 -2003 as there has been f ailure to issue the appe llate order with in 15 days of the las t he ar ing.
7. That the Ld. CIT(A) has disregarded the d irec tion of the Hon'b le Gauhati H ig h Cour t in C as e No: WP(C) 937/2014 v ide order dated 03-03 -20 14."3 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016
Bimal Paul, AYs: 2010-11 & 2011-12 Grounds of appeal for AY 2011-12:
"l. T hat on the f acts of the c ase and la w Ld. CIT(A) has erred in dis miss ing the pleas of the appellant that, the Ld. AO h as f ailed to initiate the assessmen t proceeding by issue and serv ing upon the assessee a no tice u/s 143(2) of the In c o me Tax Act, 1961, as per the CBDT Ins truc tion, and th at the notice u/s 143(2) issued and served is an inv alid no tic e, and th at time to time no tices u/s 142 issued and served are ill eg al notices, and also th at the Inco me Tax La w does no t per mit the Ld. AO to serve more than one no tice u/s 142 f or the s ame and s imilar requ ire men ts, in spite of jus tif ying all th e grounds with neces sary docume nts.
2. That the Ld. C IT(A) has erred in law and on the f acts in jus tif ying the as sess me n t or der u/s 143(3) passed by the Ld. AO in to tal violation of the g uidelines issued by the CSDT vide F. No. 225/26/2006 - IT A. II ( P t.), dated 08-09-2010.
3. That the Ld. C IT (A) has issued the appe llate order af ter expiry of the limitation per iod prescr ibe d by the CBDT vide Ins truc tion No. 20/2003 d ated 23 -12-2003, as there has been f ailure to issue the appe llate order with in 15 days of the las t he ar ing. T he date of hear ing of the case bef ore the Ld. C IT( A) was on 28 -10 -2015 and th e appe llate order was issued on 19-11 -2015 v ide Speed Pos t ackno wledge men t No: EE437339668 IN.
4. T hat the Ld. C IT (A) has passed the appellate order af ter expiry of the limitation per iod prescr ibe d by the CBDT vide Ins truc tion No. 1489 dated 03-11-1982. In th is c ase, as per the CBDT In s tru ction, the Ld. CIT (A) was required to pass the ap pe llate order with in 20 days af ter the f inal hear ing. The date of hear ing of the c ase bef ore the Ld. CIT( A) was on 28-10 -2015 and the appella te order dated 09- 11-20 15 was passed on 19- 11-2015 v ide Speed Pos t ackno wledge men t No: EE437339668 IN."
3. From the above grounds of appeals, it is important to note that there are no grounds of appeal raised in respect of findings of the Ld. AO towards undeclared bank accounts for the quantification of undisclosed income. The conclusion reached and the resultant additions made to the returned income by the Ld. AO in the impugned assessment orders have become final since they are uncontrove rted, howe ver, subject to adjudication of technical challenges mounted by the 4 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 assessee in the se two appeals vide above stated grounds of appeal. Accordingly, additions made by the Ld. AO in the impugned assessme nt orders per se are not required to be considered or decided in the appeals before us. Therefore, reference to additions made is only to set a background to the grounds of appeal which are technical challenges and taken up for adjudication.
4. From the entries in the order shee ts, it is noted that on several dates of hearing in the past, none appeared on behalf of the assessee though notices sent have not been returned unserve d. Howeve r, there is a written submission of two pages which is placed on record with acknowledge d stamp of 17.05.2022. Assessee has also furnished a paper book containing 97 pages, inde x of which is dated 23.07.2017. Documents furnished in the paper book are, however, not certifie d in terms of Rule 18 of the Income Tax (Appellate Tribunal) Rules, 1963 (ITAT Rules), more particularly as to mentioning of the authority before whom each of these papers were filed. Asse ssee has also furnishe d a letter dated 06.08.2022 filed with the Registry on 08.08.2022 wherein it is stated that assesse e has nothing more to say and submit other than what has already been placed on record for the purpose of disposal of his appeals.
5. Before us, none has appeared to represent the assessee. Howeve r, we are inclined to adjudicate on the matter by taking into consideration observations and findings of the authorities below, written submission and paper book placed on record by 5 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 the assessee as noted above along with able assistance from the Ld. Sr. DR.
6. We first take up appeal for AY 2010-11 in ITA No. 211/GTY/2014, findings of which on the common issues will apply mutatis mutandis to the other appeal for AY 2011-12 in ITA No. 08/GTY/2016.
7. We have carefully gone through the assessment order dated 12.03.2013 as well as the first appellate order dated 15.05.2014. From the perusal of both the orders, it is worth appre ciating the approach adopted by both the authorities below for the investigation and examination of the affairs of the assessee and adjudicating thereupon in a very systematic and structured me thod by dealing with eve ry aspect of the issues raised by the assessee which are predominantly technical in nature.
7.1. Assesse e has take n five grounds of appeal before the Ld. CIT(A), all of which are technical in nature which he has repe ated before the Tribunal also. Ld. CIT(A), while dealing with all the five technical issues raised by the assessee has demonstrated high level of patience and dealt with them in a comprehensive manner along with distinguishing the long list of judicial pre cede nts relied upon by the assessee. It is worth appre ciating the efforts of Ld. CIT(A) in dealing with each of the technical issues to put them at rest by giving lucid and well reasoned explanations. Ld. CIT(A) has also taken into 6 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 account the submissions of the assessee on each of the technical issues and passed a speaking order.
7.2. After going through the entire first appellate order, we unhesitantly find that we have nothing more to add on the observations and findings given by the Ld. CIT(A). In order to appre ciate his well reasoned and speaking order, it is worth reproducing the same in toto for justifiable appreciation of the efforts put in by him.
"1.1 Bef ore adv erting to the mer its of the appe al, it would be necessary to me n tion tha t the colle c tion of demand ar is ing f rom the impugned order of assessmen t was the subje ct- matte r of ex tensive correspondence an d litig ation initiate d by the appe llan t. Consequen t upon the co mpletion of assessmen t proceed ings, the appellan t appro ached the jur isdic tion al Asse ss ing Of f icer seeking s tay of collec tion of demand through his var ious le tters in c lud ing letter dated 29.04. 2013, 16.05.2013 and 27.05.2013. The Assessing Of f icer declined to do so vide his letters d ated 10.05.2013, 20.05.2013 and 0 4. 06.2013. Thereaf ter, the appe llan t moved an application f or stay of demand in this off ice whic h was cons idered and d isposed v ide order dated 26.07.2013, gran ting a sche me of ins tal me nts. This was f ollo wed by a rev ie w pe titio n f iled in this of f ice vide his le tter da ted Augus t 14, 2013 which was al so d isposed on Augus t 22, 2013.
1.2 The appe llan t th en invoked the wr it ju r isd ic tion of the Hon'ble Gauh ati H igh Cour t. Br ief ly sta ted, the Hon'b le H igh Co ur t dec lined to interf ere in the matte r of s tay of demand v ide its o rder dated Septe mber 11, 201 3, in WP( C) 3936/2 013 and M is c Case No. 2610 of 2013. Nex t, the appellan t appro ached the Hon'b le Gau hati H igh Cour t ag ain and in the ensu ing order in WP( C)/937 /2014 d a ted Mar ch 03, 2014, Their Lordships wer e pleased to d irect the d isposa l of the ins tan t pen ding appeal with in a per iod of three mon ths f ro m the date of production their order. Pursuant to the above and in respe ctf ul co mp lia nce there to, the appeal was f ixed f or hear ing. These are the encapsu lated sequenc e of events in the in terregnu m be twee n the pass ing of the assessment order and the present appe al.
1.3 In response to notice, Sr i N.C Talukd ar, Advoc ate and Author ized Representative, appe ared. He f iled a wr itte n submiss io n and explained the c ase. The relevan t doc umen ts have been perused.7 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016
Bimal Paul, AYs: 2010-11 & 2011-12 2.0 THE BACKGRO UND 2.1 T he backg roun d f acts th at are require d to be taken no te of is that dur ing the f inancial year unde r cons ider atio n, the ap pellant- indiv idual was the propr ie tor of a concern s tyled as " M/s Lokenath Enter pr ises ", Silch ar, dealing in items such as r ice, pu lses, sugar, ed ible o il, e tc. In addition to this, the appe llant had inco me f ro m plying of min i- tr uc ks and in teres t in come. The re turn of in co me f iled f or the assess men t year declared a total inco me of Rs. 3,71,300/ -. Dur ing the course of the ensuing scrutiny proceed ings, it was f ound that the appe llan t had ma in ta ined three bank accoun ts wh ic h were und is puted ly not disclosed in the return of inco me. The par tic u lars of these accoun ts are:
Undis c losed B ank Accoun ts Sl. Bank Acco un t Acco un t Nu mber Depos its dur ing the FY ( i) Ax is Bank L td., Silch ar 271010100132633 Rs. 1,43,06,300/ -
( ii) -do- 271010100055648 Rs. 3,60,27,809/ - ( iii) HDFC Ltd. , Silch ar 10631000001479 Rs.44,34,917/-
2.2 The agg regate deposits in the af oresaid bank accou nts s tood a t Rs.5,47,69,026/ -. When conf ron ted by the Assess ing Of f icer, the appe llan t admitted v ide his le tter dated 04-12- 2012, tha t all the three bank accounts were undisclosed, though he claimed that he was running a co mmission bus iness and the tr ans ac tions were routed through the se ac coun ts. Ho wever, no docu men tar y ev idences in suppor t of the c laim of the so-c alled co mmiss ion bus ines s were produced bef ore the Assessing Of f icer. No valid exp lanation was f urnished by the appellan t in respec t of the source of deposits appe ar ing in the af ore mentioned u ndisclosed b ank accoun ts . O n tes t ver if ic ation, th e As sessing Off icer f ound dis cre pancies in purchases claimed to have b een made f rom so me of the par ties, which was conceded to and e xplained as a 'mistake' by the appe llan t. These f acts have been men tio ned in the asse ssmen t order. In th e S tate men t of Fac ts f iled, the appellan t iter ated tha t the af oresaid th ree banks accoun ts were ' mis taken ly' not disclosed in the re tur n of inco me.
2.3 On a cons idera tio n of these and other f ac ts de line ated in the assess men t order, the Assessing Of ficer re jec ted the c onte n tion of the appe llan t th a t the tr ansactions in the und isc losed bank ac counts were attr ibu table to a co mmission business. T he aggregate of depos its in the thr ee bank accoun ts at Rs.5, 47,69,026/- was taken 8 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 as the suppresse d sale . To this f igure, the Assess ing Off icer applied the gross prof it r ate of 4.11 percent (borro wed f rom the prof it r ate ref lec ted by the appe llan t himself in his accoun ts) f or de ter mining the und isc lose d p rof it. Secondly, the inves tme nt made by the appe llan t f rom und isclosed s ources was de ter mined at Rs,13,95,000/- by working ou t th e peak cred it. Third ly, the undec lared in terest in co me in the bank ac counts amoun ting to Rs.939/- was also added to the to tal inco me. The mod alities of the co mpu tatio n of undisc losed inco me are at par as (12) to (17) of the assess men t order. In a nu tshe ll, the additio ns made in th e order of assess men t ar is ing f rom undec lared bank tr ans actio ns in the three und is c losed ac coun ts are summar ized as unde r:
( i) Prof it on suppressed sale :: Rs. 22,57,001/- ( ii) Unexp lained investmen t in purch ases : Rs.13,95,000/- ( iii) In teres t accrued in the undis closed ban k Rs. 939/-
accoun ts 2.4 In this man ner, the income was assessed at Rs.40,24,240/ -
rais ing a ne t tax and in teres t de mand of Rs. 15,16,830/-.
2.5 T here is no ground of appe al r ais ed in respec t of th e f ind ings of the Asses s ing Of f icer vis- a-v is the undeclared bank ac counts or the quan tif ic ation of undisclosed income. Being uncon tro ver ted, the conc lus ions re ach ed and the resu ltant add itions made to the returned inco me as per the assessment order h ave beco me f inal, subje c t to the adju dication of the tec hnical challenges moun ted by the appe llan t in this appeal. Thus, the add itio ns per se are no t required to be cons idered or dec ided in th is appe al and f ind ref erence here only as a background to the g ro unds of appe al, wh ich are taken up f or discuss ion in the succee ding par agr aphs of this order.
3.0 GROUND NUM BER (1) 3.1 T he f irs t ground of appeal seeks to declare the imp ugned assess men t order da ted 12.03.2012 as inv alid on the ground tha t the same does not bear the signatur e of the Assess ing Of f icer. The appe llan t re lied upon the dec is ions of the Hon'ble Supre me Cour t rendered in the c ase of Kalyan kumar Ray vs. C IT [1991] repor ted in 191 IT R 634 and tha t given in the case of Smt. Kilasho Deo i Bur man vs. CIT [1996 ] repor ted in 85 Taxman 346. Dra wing a tte ntio n to the decis ion of the H on'ble Supreme Cour t in Sheno y & Co. vs IT O [1985] (155 ITR 178), it was submitte d that the af oresaid de cis ions were bind ing on all, inc luding those not par ties bef ore the Co ur t. Re liance was also placed on the dec ision of the Ld. A ppe llate T ribunal, Mumb ai in V ijay Corporation vs. ITO in IT A No. 1511/Mu m/2010. The appe llant ass er ted that d isregarding the decis io n of the H on'ble 9 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 Supre me Co ur t amo un ted to violation of Article 141, Ar ticle 51-A and Ar ticle 265 of the Constitu tion of Ind ia. On the s trength of these argumen ts, the c ancellation of the impugned o rder of assess men t was urged.
3.2 The matter h as been cons idered. The decis ion in the case of Kalyan ku mar Ray ( supr a) relied upon by the appe llan t, is f irs t take n up. In the s aid c ase, the issue th at had f allen f or consideratio n was whe the r under th e assess ment ord er itse lf should contain the c alculatio n of tax, in teres t, etc., and of the ne t su m p ay able by/ref undable to the assessee or wh ether these cou ld be me n tioned in the de mand n o tice. The Hon'ble Supre me Cour t held th at " assess ment" is one integr ated pro cess involv ing not on ly th e assess men t of the to tal in co me, bu t also the de ter minatio n of the tax, with the latter being as crucial f or the assessee as th e f ormer. It was dec lared th at the statu te does no t require the serv ice of the assess men t order on the assessee and con te mpla tes only th e service of a no tice of demand. The Hon'ble Apex Cour t he ld that all th at is needed is that the re should be some order in wr iting initialled or s igned by the As sessing Of f icer bef ore the per iod of limita tio n prescr ibed f or completion of assessme nt has expired in which the tax payable is de ter mined.
3.3 The f ac ts of the ma tter are th at the copy of the assess ment or der passed under section 143(3) of the Ac t has "sd/-" wr itte n above the name and des ign ation of the Assessin g Of f icer. The Demand No tice, ho wever, duly bear s the sign ature an d seal of the Ass ess ing Of f icer. The deter min a tion of to tal income at Rs.40,24,240/- and the co mpu tatio n of tax have been made in the body of the assess men t order itse lf . T hereaf ter, the co mpu tation of Education Ce s s, s tatu tor y in teres t under sections 234B /234C of the Ac t, cred it f or prepaid taxes, ad jus tme n t f or amou n t ref unded ear lier and in teres t under sec tio n 234D of the Ac t, are recorded in the body of the assessmen t order le ading to th e eventual qu antif ic ation of the amount pay ab le at Rs.15,16,830/-. This is the s ame amoun t th at h as been recorded in the corresponding No tice of Demand dated March 12, 201 3, issued to the appellant by the Assessing Of f icer vide h is of f ice Me mo No. AJMPP9568K/ W-1/Sil/ 1879. Hence, th e signed De mand No tic e is based on the itemiz ed co mputation of tax and in teres t in the order of assess men t. T hus, as per the dec ision of the Hon'b le S upre me Cour t in the Kalyanku ma r Ray c ase (supr a), the valid ity of the assess men t order and tha t of the resultan t Deman d Notice do no t s ta nd v itiate d.
3.4 T he ma tter wo uld have been dif f eren t h ad the De mand Notic e been beref t of the s ign ature of the Assessing Of f icer. Howe ver, this is no t the case. The Demand Notice, f iled by the appe llant himself along with the app eal docu men ts, shows tha t it h as bee n s igned by the Assess ing Of f icer. The Hon'ble Su pre me Cour t has o bserved and held tha t the Act does not even env is age the service of the assess men t order and the serv ice of th e De mand No tice is suf f icien t 10 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 co mpliance to the statu tory provisions. The Demand No tic e has been duly dra wn up in consequence to the order of assessment, the ne t amoun t payab le h as been specif ied therein, it has been s igne d by the Ass ess ing sig ned/stamped by the Assess ing Of f icer and served on the appe llan t. Hence, the af oresaid dec is ion does no t f urther th e argumen ts of the appellant.
3.7 T he third c ase relied upon is tha t of the Ld. Ap pe llate T r ibunal, Mumb ai, in V ijay Corpor ation vs. IT O [ I.T.A No. 1511/Mu m/2010 dated 20-01- 2012] repor ted in 50 SOT 33 (URO), is tha t of a non- jur isd ic tional Appe lla te Tr ibunal and, theref ore, is no t a bind ing precedent. Moreover and with u tmost respec t, the o bserv atio n made there in that the Hon'ble Supre me Cour t in the case of Smt. K ilasho Dev i Bur man (supr a), d id no t give 'an y impor tan ce' to the serv ice of no tic e of demand req uires caref ul cons ider ation af ter taking in to accoun t the f ull tex t of the decision, par tic ular ly, the por tion ex tr ac ted at p ar a ( 3.6) supr a. On the o ther h and, the Ho n'b le Ker al a H igh Co ur t in C IT vs K. H. Par ames war a Bh at [1974] repor ted in 97 IT R 190, laid down the we ll-understood d is tin c tion be twee n the mak ing or the p assing of an assessmen t f rom th e co mmu nic ation of a copy of the assessmen t order to the assessee. Af ter tak ing no tice of the de cis ion in V. S. Sivalingam Chettiar v. Co mmiss ioner of Inco me- tax [1966] 6 2 I.T .R. 678 (M ad), the Hon'b le H igh Cour t held tha t there was no spec if ic provision in the Ac t en jo in ing th at an assess men t order mus t be commun ica ted to the assessee. Nor is there any provision in the relev an t Rules that assessmen t orders mus t be co mmu nic a ted. All th at sec tion 30 of the Ac t r equired was that a no tice of demand in the prescr ibe d f orm spec if ying the sum payable should be served on the assessee when a tax or penal ty is due in consequence of an order passed under the Ac t. Rever ting to the issue under consider ation, it has to be held tha t where the relev ant order of assessmen t was la wf ully passed an d the s igned de mand no tice specif ying the amoun t payable was ser ved on the appe llan t, alo ng with a copy of the assessmen t order, th e mere f ac t that the appellant' s copy was mar ked "sd/-", wou ld no t cons titute a f atal debil ity. The Hon'ble Calcutta H igh Cour t in Sh ahd ar a (Delhi) Sahar anpur L ig ht Rail way Co. Ltd. v. C IT [ 1994] 208 IT R 882, he ld that there c an be no invalida tion of the assess men t order when the amoun t of tax is mentioned in the de mand no tice, wh ich is an und is puted f act in th is appe al.
3.8 In v ie w of the discussion as af oresaid, the ground of appeal is no t mer itor ious. The same f ails and is , accord ingly, d is missed.
4.0 GROUND NUMB ER (2) 4.1 The appe llan t has taken the ground th a t the Assess ing Of f icer f ailed to p ass the impugned assessmen t order da ted 12.03.2013, with in 14 working day af ter the date of las t he ar ing taken on 11 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 28.01.2013, thereb y, af f lic ting it with a f atal def ec t. In his wr itte n submiss ion, the ap pellant has f ur ther claimed in a s imil ar ve in, th a t the assess men t or der along with Demand No tic e da ted 12-03-2013, was served on 03-04- 20 13, i.e., af ter the exp iry of 21 days, though it ought to h ave been served with in a f ortn igh t. Thus , it was submitte d tha t the ac tion of the Assessing Of f icer was in bre ach of the s tipulations made in the "Manual of Off ice Procedure" (V ol. II, 2003) issued by the CBDT, New Delh i, the CBDT C irc ular is sued through le tter No. 241/23/70 dated 23-10-1970, Cir c ular No 29 dated 08-08 -19 78 of the D ire c tor ate of Organ ization and Manage men t Serv ices, CBDT, New Delh i (DOMS) and the Do's and Don't's Manual, 20 11 of the CBDT. These were claimed to be bind ing on the Asse ss ing O ff icer. A number of judic ial au thor itie s have been c ited. The appe llant urged, th at as pe r a 'true applic atio n and spir i t of law', the assessment order was invalid and deserved to b e c ance lled.
4.2 The matter h as been considered. The date of las t hear ing as conveyed by the Assessing Of f icer vide h is le tter d ated 13.05.2014, does no t appear to be 28.01.2013 as claime d, bu t was 05.02.2103 on wh ich d ate th e appe llan t along with h is represen ta tive had appe ared bef ore the Assess ing Of f icer. Ho wever, th is marg in al aspe c t doesn 't ma ter ially al ter the position taken by the appe llan t. On mer its, the arg umen t of the appe llan t is palpably un tenable. The Depar tmen tal M anu al of Off ice Procedure, heav ily relied upon by the appe llan t, is in th e nature of adv isory gu ide lines to be nor mall y f ollo wed in ide al conditions. At page (37) of the s aid M anual, [ which is identic al to the DOMS Circu lar 29 da ted 08.08.19 78] it is, in ter alia, s tated th at the assessmen t order, demand no tice and challan/ref und voucher should be ser ved expeditious ly and within a f or tnig ht of the date of assessmen t. It also goes on to sugges t th a t the date of service of the demand notice sho uld be no te d in the D&CR and th at the Assessing Of f icer should ins pect the s aid register by the f our th of the succeed ing mon th with a v ie w to ensure th at the date of service of de mand is entered and wherever demand no tice s are no t serv ed, to f ind out the re asons of non-serv ice and take necessary s te ps to serve the re ma inin g demand no tices.
4.3 It is no te wor thy th a t the s aid M anu al explicitly dec lares that it is f or Depar tmen tal use only. The recommend ations made in the said documen t do no t h ave the f orce of la w an d a dev ia tio n theref rom c anno t conce ivably le ad to the ann ulmen t of the assessmen t order. The guide lines ar e not s tatu tory pr ovisions and at bes t, can be regarde d as e xecu tive gu idelines. If an orde r of assess men t has been validly p as se d with in the limitation prescr ibe d in the Act, then an assessee will no t be en titled to c ite the adv isory guide lines men tio ne d in an in ternal Depar tmental pub lica tion to de mand that the assess men t or der itself should be cance lled. T his wo uld be an erroneous vie w to hold. The assessmen t order pas sed within the legal limitatio n per iod, would no t lose its valid ity mere ly bec ause it 12 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 was passed on the , say, 15 th d ay of the f inal he ar ing rather than the 14th d ay, or tha t it were served on the 22nd d ay f rom the d ate of the order r ather th an within 21 days. Accord ingly, there is no tenable b as is f or seeking an annu lmen t of the order ad mitte d ly passed with in the time prescr ibed by the statu te. In o ther words, it c anno t be anyone 's case th at an in ter nal De par tmen tal Manual c an or does override th e express provision s of the Ac t its e lf .
4.4 In any even t, the advisory reco mmend ations made in the M anual of Off ice Procedure canno t, under any stre tch of imagin atio n, be equated to a binding Circu lar or Ins truction issued by the Board in exerc ise of its po wers under section 119 of the Ac t. The adminis tr ative g uidelines ought to be f ollo wed by the subord inate of f ice rs, but a dev iation the ref rom c anno t poss ibly be taken adv an tage of by the appe llan t to seek an ann ulme nt of the assess men t order. T here are no inter pre tatio nal issues or co mplex ities invo lv ed in appreciatin g th is r ather f undamen tal leg al propos ition. As a g eneral rule, the admin is tr a tive ins tru c tions such as these, lack s ta t utory f orce and do not cre ate or ves t any leg al r ight. T he se have been issued f or s tr eaml in ing the inter nal working of the De par tmen t or achieving so me ad minis tr ative o b je c tives or seek to def ine des ir able 'housekeeping ' g o als. A dev iatio n or a miscons truc tio n canno t be s aid to co nstitu te a f atal err or of law, if o ther wise no t in br each of the prov is io ns of the Ac t.
4.5 If th is be the pos ition, then the relian ce placed by th e appe llant on var ious decisions in th is regard is misconce ived. In the case of Navnitlal C. Jh aver i vs. K.K Sen, AAC [1965] repor ted in 56 ITR 198, the Hon'ble Supreme Cour t consider ed the eff ect of C ir cular No. 2(XXl-6/55) d ated 10-05-1955 issued by the then Cen tr al Bo ard of Revenue. No t on ly there was no d ispute tha t it was a f ormal Cir cular, the Hon'ble Supre me Cour t itself observed tha t" Cir cular of the kind whic h was issued by the Bo ard would be bind ing on all the of f ice rs .... . " (emphasis supplied). Thus, the af oresaid d ecis ion was based on a C ircu lar whic h the Hon'ble Supre me Cour t declared as belong ing to a c ate gory that was binding on the subord ina te off icers. In o ther words, not all missives issue d by the Bo ard are bind ing of the subord ina te of f icials, even though the word 'Circular/ Ins tru c tion' may h ave been used. The second case cited by the appe llan t, i.e. , th e decis ion rendered in Eller man Lines Ltd. vs. C IT [1971] repor ted in 82 ITR 91 3, is an iter a tion of the N avn it Lal C. Javer i decis ion (supr a). In this c ase, the Hon'ble Apex Cour t was cons ider ing the ef fe ct of Notif ication dated 10-02-1942 is sue d by the then Bo ard of Revenue under which instruc tio ns had be en issued to the assess ing au th or ities laying down the pr inc iples to be applied in assess ing the f oreign s hipping companies and per mitti ng the m to elec t to be assessed on the basis of the "r atio cer tif icate s" gran ted by the U.K, autho r ities and en abling the m to ge t inves tmen t allo wance. It cann o t be anyone's c ase that the con ten ts of the three volumes of the M anual of Off ice Procedure can be ch ar ac ter ized as a 13 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 bind ing No tif ica tio n. Moreover, it is usef ul to take no te the observations of the Hon'ble Madr as H igh Cour t in A.L. A. Fir m vs C IT [1976] repor ted in 102 IT R 622, [ af f irmed in (1991) 55 Tax man 4 97 (SC) ], wh ich is as under:
"The de cisions of the Supre me Cour t in Navn it Lal C. Javer i v. KK Sen, Appellate Assistan t Commiss io ner of Inco me- tax [1965] 56 ITR 198 (SC) and Eller man Lines L td. v.
Co mmissioner of Inco me- tax [1971 ] 82 IT R 913 (SC) mus t be cons idered to be th e exceptional ones" .
4.6 In the case of KP V arghese vs. ITO [1981] repor ted in 131 IT R 597, whic h has been relied upon the appellan t, the Hon'ble Supreme Cour t took cogn iz ance of Circular dated 07-07-196 4 of the Boar d that was issued u n der sec tion 119 of the Act. Thus, the s aid C ircular s tood on a d if f erent s tatu tor y f ooting. In ano ther c ase relied u pon, i.e., Keshav ji Rav ji & Co. Vs. C IT [ 1990] repor ted in 18 3 IT R I, th e Hon'ble Supre me Cour t made a ref erence to C ircu lar No. 33-D (XXV-
24) of 1965 of th e CBDT whic h wa s de clare d to be 's ta tutory in char ac ter' and, theref ore, binding on the au th or ities. In s tar k contr as t, the appe llan t has re lied upo n a reco mmend ator y guide line in an in ter n ally circula ted publica tion tha t De mand No tices should be served in a f o r tn ig ht's time of the date men tio ned there in. T his c anno t be tre ated as be ing at par to a f ormal C ir c ular or an Ins tru c tion issued under the po wers conf erred to the B oard under the Ac t. Thus, wh ile the propos ition c ited by the appellan t tha t judg men ts of the H on'ble Su pre me Co ur t is b ind ing on a ll inc luding those no t par ties bef ore it, is absolu tely u nass ailable and capable of no derog atio n, there is no dec ision that s tates th at the Manu al of Of f ice Procedure or le tters of the Bo ar d are b ind ing on the Assessin g Of f icer de hors the prov is ions of the statute.
4.7 The appe llan t has also apparen tl y relied o n the dec is ion of the Ld. Appe lla te Tr ib un al in ITO vs. Bir Eng ineer ing Works [2005] repor ted in 94 IT D 164 (SB). Howe ver, a perusal of th e dec is ion sho ws that the f inding given was that Instr uc tions /Circulars issued under sec tio n 119 of the Ac t are binding on Dep ar tme n t of f ices and was de livered in the contex t of Instr uction No. 1979 d ated 27-03- 2000 of the CBDT in respect of not f iling appe als belo w a bench mar k tax ef f ect f or reducing litiga tion as well benevo lently be nef iting the s mall taxpayers. On the con tr ary, the docu men ts cited by the appe llan t have no t been issued under sec tion 11 9 of the Ac t and ne ither do they e ven purpor t to supply an in terpre tation of the limitation c lauses of the Ac t, nor do they re lax the r igours of a prov is ion of the s ta tu te.
4.8 The appe llan t has also f iled a c opy of Dos & Don'ts Manual, 2011, of the CBDT which adv ises off icials to co mply with Cir culars, No tif ic ations, Ins tr uctions issued by the CBDT and th at the dec is io ns 14 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 of the Hon'b le Su preme Cour t/ jur isd ic tional H igh Cour t should not be d isregarded. T he appe llan t has als o ref erred to le tter f rom F. No. 241/23/70-IT (Audit) dated 23-10 -1970 wh ich s tates tha t order of assess men t s hou ld be passed with in 14 wo rk ing d ays af ter the d ate of las t he ar ing. In par a-(2) of the letter ( issued approx imate ly 44 years ag o), it h as been men tioned tha t the Bo ard wil l look with 'disf avour' to any dev iation, without adequ a te jus tif ic ation, f rom the prescr ibed time - limit. This in itse lf shows th at the conse quence of a dev iation c anno t b e the annulmen t of the assess me nt order which has, as in this case, marginally oversho t the reco mmended lag be twee n he ar ing and passing/service of the order. H o we ve r, this le tte r c anno t be regarded as a s ta tu tory or a bind ing Cir cular/ Ins truc tio n of the Board un der section 119 of the Ac t. I t may have admin istr a tive implic ations, but the s ame c anno t go to annul the said order. Obviously, such letters, guide line s, manuals, Ac tion Plan, etc., wh ic h are issued f rom time to time c annot incorpor ate a provis ion to the eff ect that a dev ia tio n f rom the ir sugges tio ns wou ld render the asse ssmen t order itse lf as non est. It may be g ainf ully men tioned that as per the legend appe ar ing on its cover page of the Do's and Don 't's document also, the same is exclus ive ly f or Depar tmen tal use on ly. Thus, even at the r isk of repe titio n, it needs to be s tress ed th at the Dep ar tmen tal Manu al of Of f ice Procedure or the DOMS lette r has no legal conse quences on the oper ation of the assessme nt order or the De mand No tice. The Manual c anno t be classif ied as a set of bind ing ins tructions is sued under sec tio n 119 of the Ac t. Thus, it c an be conc luded tha t prescr iptions in the in ter nal M anu als, Do's & Don'ts , le tte rs of Aud it or adv isor ies of DOMS are to be noted, bu t do no t hav e a b ind ing co mpu ls io n on the Assessing Off icer. Adminis tr ative ins truc tio ns, rules or manu als, wh ic h h ave no sta tu tory f orce, are nor mally no t enf orceable in a cour t of law. In the contex t of dif f eren t f ac ts, b ut with an applic ab le ratio dec idend i, the Hon'ble De lhi H igh Cour t in Delhi S toc k E xchan ge Associa tion Ltd vs CIT [1980] repor ted in 126 IT R 532, he ld th a t such letters are merely adv isory in nature and contain an administr ative sugges tion, having 'no co mpulsive or legal over tones".
4.9 T he appe llan t has c ited the case of decided by the ld. Appe llate Tribun al, Indore, in Sanjay Kr. Agar wal vs. AC IT 5(1), In dore (LT. A No. 490/ Ind./2008 dated 27-11- 2008. wh ich was on Ins tr uc tion No. 10/2004 dated 2 0-09-2004 of the CBDT. Ho wever, in Himac hal Pr adesh S tate Fores t Corpor a tion L td vs DCIT [1998] repor ted in 231 IT R 556, the Hon'ble H imachal Pr ad esh High Cour t h as taken a contr ary v ie w. Similar is the position of the Hon'ble M adr as H ig h Cour t as adumbr a ted in ITO vs D. Manohar lal Ko thary [1990] (236 IT R 357). In the case of Commissioner of We alth - tax vs V . T. Ramal ing am [ 1993 ], 201 ITR 839, the Hon'ble Madr as H igh Cour t held th at Cir cu lar s, being purely ad ministr a tive in n ature, cannot bind the appe lla te author itie s in the matter of in terpre ta tion of the prov is ions of the Ac t.
15 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016Bimal Paul, AYs: 2010-11 & 2011-12 4.10 Withou t pre judice, the matter can be cons ider ed f rom a d if f erent perspec tive also. The s ame par agr aph of the Manual of Of f ice Procedure wh ich speaks of the service of the De mand Notice with in a f or tn ight o f the d ate of assess ment, also spe aks of entry of de mand in o ther of f ice regis ters, in spection by the f our th of the succeed ing mo n th by the Assessing O ff icer and his takin g correc tive action to se rve any un-served demand notices. Thus, the Manu al as well as the iden tical DOMS guidelines dated 08 -08 -1978, itself conte mp la te of a scenar io where a Demand No tice may no t h ave bee n served within a f ortn ig ht f or wha tever reasons. Thus, non-se rv ice of De mand No tice with in 14 days is no t dec lared to be a s tatu tor y inf ir mity so as to r ender the ac co mpanying order of assess men t as null and vo id. In deciding whe ther an assess men t order is a nullity, a ref erence has to be made to the Ac t, Rules and bind in g decis ions of the super ior ju dic ial au thor ities. There is no t even a shred of mate r ial to sugg es t that the impugned assess men t o rder dated 12.03.2013 and properly served on the appe llan t on 03.04.2013 , was no t passed with in the limitation date.
4.11 In light of the disc ussion made above, the con te ntion of the appe llan t that the order of assessmen t was a nullity f or its f ailure to adhere to the g uidelines and advisor ies compr ised in of f ice manuals, bookle ts and lette rs cannot poss ibly be uphe ld. No pr e jud ice has been sho wn to be caused to the appellan t b y the f act tha t the assess men t order was passed a f ew days af ter the date of hear ing or that the de mand no tic e was serve d on Apr il 03, 2013. Obv ious ly, no such pre judice can ar ise. The assess men t order can no t b e char ac ter ized as in f irm, or f orcibly choked in to a nullity by the non- bind ing ad min is tr ative prescr ip tions. No thing h as been ple aded or sho wn that it was in any manner at odds with a s tatu tor y prov ision of the Ac t or a t a var iance with a bin ding jud icial decis io n.
4.12 According ly, the ground of appeal take n f ails and is , theref ore, d is miss ed.
5.0 GROUND NUMB ER (3) 5.1 The appellan t h as r aised a ground that the impug ned assess men t order oug ht to h ave been passed with in 2 1 mo n ths f ro m the end of the relevan t assessmen t year. It is the appe llan t's cas e that despite the amendmen t made in sec tion 153 of the Act v ide the Finance Ac t, 2012, with ef f ect f rom 01-07-20 12, the time limit f or pass ing an order under sectio n 143(3) of the Ac t would still continue to be 21 mon ths and no t 24 mon ths f or the as sess me nt year under cons ider ation, on the ground tha t law applied ough t to be the law in f orce during the f inan c ial year 2009-2010.
16 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016Bimal Paul, AYs: 2010-11 & 2011-12 5.2 The matte r has been examined . The relevan t ex trac t of the Explan atory Me mor andum to the Fin ance Bill, 2012, re ads as under:
(e mph as is sup plied) Ex tens ion of time f or co mpletion of assessmen ts and re assessmen ts The exis ting prov is ions of sec tion 153 and 153B, in ter alia, prov ides the time limit f or completion of assess ment and re assess ment of inco me by the Assess ing Of f icer. Time limits have been prov ided f or co mple tion of assess men t or reassessment under se ction 143(3), 147, 153A, 1 53C, e tc. Fur ther, these time limits ge t exte nded if a ref erence is made under sec tion 92CA to the T ransf er Pr ic ing Off icer dur ing the course of assessment/reassessmen t pro ceed ings. These time limits are eithe r f rom the end of the f inanc ial ye ar in whic h the no tic e f or initiation of the proceed ings was served or f rom the end of the assess men t ye ar to which the proceedings relate. It is proposed to amend the af oresaid sec tions, i.e., 153 and 153B so as to prov ide that the time limits f or completion of assess men ts and reassess men ts shall respec tively be incre ased by three mon ths. The ex is ting per iod an d the ne w extended period f or co mp le tio n of pending proceedin gs and su bsequent proceed ings u nder these prov is ions is g iven belo w:
Limita tion of time Pro c ee d i n gs u n d e r s e c ti o n Cur re n t ti m e al l o we d Pro pos ed Pe r io d 14 3 2 1 mo n ths f rom the e nd of t he A. Y . 24 m o nt hs (o t he r s, o m i t te d) These amend men ts will take ef f ect f rom 1 s t July, 2012.
5.3 As is noted f rom the af oresaid, it has been specif ic ally men tio ne d there in tha t the amendmen t will take ef f ect f rom Ju ly 01, 2012 and will ap ply to all pend ing proceed ings as o n th at d ate.
Thus, all o ther wis e valid assessment proceed ings pend ing on July 01, 2012, could be leg itimately passed, no t within 21 mon ths f ro m the end of the assessmen t year, but f rom the end of 24 months thereof . The af oresaid amendmen t is procedur al in natur e as d is tinc t f rom a subs tan tive amendmen t as it co ncerns the proces s of pass ing an assess men t order with in the spec if ied time. It is we ll-unders too d that s ubs tan tiv e laws de ter mine the r igh ts and liabilities of the par ties concerned, whereas, procedu ral la ws govern th e manner in whic h such r ig ht or oblig ations are to be enf orced or realized. Procedur al amendmen ts co me into ef f ect f rom the d ate spec if ied in the relev an t F inan ce Act, which in this case, was July 01, 2012.
5.4 The ap pellant has relied on a nu mber of jud icial au th or ities in suppor t of the con te n tions canvassed by him. In the c ase of Addl. CIT vs J oginder Singh [1985] repor ted in 151 IT R 92, the Hon'ble Delhi H ig h Cour t was cons ider ing subs tan tive pen al p ro v is io ns in 17 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 respe ct of concealmen t and o miss ion of tax able inco me. In the case of Reliance Ju te a nd Indus tr ies Ltd. vs CIT [1 979] repo r ted in 120 IT R 921, the Hon'ble Supreme Cour t was se ized of a matter involv in g se t of f of broug ht f or ward bus iness loss with the bus ine ss inco me of the curren t year. Ma tters involv ing c o mpu ta tio n of assessable to tal inco me are subs ta ntive in nature. Additio nally, in this case, the Hon'ble Apex Cour t held th at it is a cardinal pr inc ip le of tax la w th at the law to be applied is that in f orce in the assess men t year unless o ther wise provided expressly or by necessary implication. In this c ase, the af oresaid amend men t of sec tion 153 of the Ac t h as been explic itly made app lic able f rom July 01, 2012, to all pend ing assess men t orders. In the re lied u pon c ase of Kar imthar uv i Te a Es tate L imited vs Sta te of Kerala [1966] repor ted in 60 ITR 262, the Hon'ble Supre me Cour t de liber ated on the levy of add itional tax b y way of a surch arg e on the ag ricul tur al income -tax as we ll' as levy of super-tax. The amendment re lated to computatio n of to tal income and, conseq uen tly, was c le ar ly subs tan tive in na ture. The case of Co mmiss ioner of Weal th -tax vs S mt. Hasmatunn is a B egu m [1989] repor ted in 176 IT R 98 (S.C.), dealt with the pro per co ns truc tio n of the prov iso to sec tion 4(1)( a) of the Wealth-tax Ac t, 1957, which prov ides f or exemp tion respec ting tr ansf erre d asse ts wh ic h would o ther wise be in c ludable in the taxable weal th of the ass essee under sec tio n 4(1)( a) of the Act. Thus, there would be no man ner of doub t that the s ame de alt with a subs tan tive prov is ion impac ting upon the de ter mination of taxable net weal th of an assessee. In the cited cas e of CIT vs Scindia Ste a m Nav igation Co. Ltd. [196 1] repo r ted in 42 IT R 589, the Hon 'b le Supreme Cour t c onsidered an issue relating to charge of tax with ref erence to sec tio n 10(2)(v ii) of the Act of 1922. This would be a s ubstan tive amendment, witho u t an io ta of doub t. Thus, the case la ws c ited by the appellan t concern the mse lves with amend men ts th at are s ubstan tive in na ture, wh ile the is sue at h and relates to a ch ang e in limitation per io d only le av ing the co mputation of to tal inco me un touched and is, ther ef ore, manif estly procedural in nature.
5.5 The date f rom wh ic h the af oremen tio ned amend ment to sec tio n 153 of the Ac t c ame in to f orce and app lied to all pe nd ing proceed ing s is un amb iguously and tex tu ally apparent f rom the Finance Bill, 2012 . It ex tends the date of pas s ing of assess men t orders under section 143(3) of the Ac t b y three months. It has absolu te ly no imp ac t on the subs tan tial r igh ts of an assessee relating to the de ter minatio n of to tal inco me. In this v ie w of the matte r, it is appar ent that the Assessing Off icer was f ully jus tif ied in pass ing the order of assessment u nder sec tion 143(3) of the Ac t f or the assess men t year 2010-201 1 on any d a te anter io r to 31st of Mar ch, 2013. The said asse ssmen t order was pend ing as on July 01, 2012. It was no t r equ ired s ta tu tor ily to be p assed pr ior to this d ate but could have been passed at any time pr ior to Dece mber 31, 2013, even if the amendme n t to sec tion 153 of the Ac t was n o t brough t in the s tatu te book. H ence, the exte nded time limit till M arch 31, 2014, 18 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 f or pass ing the said assess men t order by v ir tue of the amend men t made was av ailable to the Assess ing Of f icer.
5.6 Conseque ntly, it has to be held that the impugn ed order of assess men t was passed with in the applic ab le limitation date. T hus, the arg ume nts of the appellan t that the said order itse lf was b arred due to limitation as it was passed beyond Dece mber 31,2 012, f ail to f ind any mer it wha tsoever. In light of the d isc uss io n made as f oreg oing, the ground of appe al f ails and is, accord ingly, d is missed.
6.0 GROUND NUMBE R (4) 6.1 Here, the appellate h as r aised a griev ance th at while p ass ing the assess men t order, the Assessing Of f icer has suppressed mate r ial f ac ts of the case. In its wr itten submiss io n, the appellate averre d that he had 'volun tar ily' of f ered und isc losed inco me of Rs. 6,10,000/- v ide h is le tter d ated 0 4. 12.2012 addres sed to the Assess ing Off icer. A copy of the s aid letter has been f iled. It was claimed that in the sub mission dated 04. 12.2012, a d is closure of Rs. 6,10,000/- was no t re je cted by the Assess ing Of f icer as no thing about the s aid dis closure f inds men tion in the assessmen t order. Thus, the ap pellant concluded, " it was 'c le ar ' that the Assess ing Of f icer f ailed to g iv e his f ind ing and conclus ion 'in the man ner which the la w requ ires'. All this c lear ly to a biased appro ac h and thus v itiate s the qu as i- proceedings. Theref ore the assess men t is inv alid. "
6.2 The matter h as been considered. From a perus al o f the le tter dated 04.12.201 2 as enc losed by th e appe llan t, it is no ted th at, when conf ron ted, the appellan t himself ad mitte d bef ore the Assess ing Off icer tha t he had business tr ans ac tions thr ough all the three und is c los ed bank ac counts and that the y h ad trans ac tion s were to the q uan tita tive extent me ntioned by h im. In the said le tter, a c laim was made th a t dur ing the relevan t f inancial y ear, he had c arr ied ou t r ice/bhusi business on a co mmiss ion bas is and the depos its /withdr a wals f ound ref lection in these three conc ealed bank accoun ts. The app ellan t c laimed th at adv ances were rece ived f ro m d if f erent par ties and payme nts were made to the m. M oreover, the appe llan t submitte d bef ore the Assess ing Of f icer th at he had been unable co llec t a s ingle conf ir mation ev idencing rece ip t o f advances. The appe llan t in the said le tte r, ther eaf ter, proceeded to convey to the Assess ing Of f icer that he was off er ing a sum of Rs. 6,10,100/ - as a 're asonable amoun t of undisc los ed inco me'. He conc luded by assur ing the Assess ing Of f icer tha t 'this thing will no t happen in the f uture' and th a t no f urther action shou ld be initia ted.
6.3 T urning to the assess ment order, it is to be noted tha t the Assess ing Of f icer has made an explicit ref erence to th e af oresaid le tte r of the appellan t at par agr aph (7) thereof , where he has men tio ne d that ass essee had admitte d to the ex is te nce of bus iness tr ans ac tion through all the three undisclosed bank ac coun ts. The Assess ing Of f icer has also no te d that in the s aid le tter d ated 19 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 04.12.2012, the assessee had claimed tha t he was running a co mmiss ion business dur ing the rele van t per iod, though, th is was no t suppor t by any documentary evide nce. The Assessing Of f icer has f urther discussed the con te nts of th e 'd isc losure ' made by the appe llan t in the succeeding par agr aph s of his order. From the s ame, there is no t even a modicu m of doubt that the Assess ing Of f icer f ound the claim made by the appellan t through the le tte r dated 04.12.2012, as unsubstantiated, con trad ic tory and unac cep table. In th is f ac tual ma tr ix, there is no mer it in the contention of the appe llan t that the Assessing Of f icer has comple te ly gloss ed over and ignored his le tter dated 04. 12.2012. Wh ile it may be true that the "off er" made to trea t a sum of Rs. 6,10,100/ - as und isc losed in co me has no t been men tioned by the Assess ing Off icer in the body of the assess men t order, th is per se canno t be tre a ted as an o miss io n f atal to the v alid ity of the assessmen t order. In f ac t, it is perf ectly poss ib le to ho ld th e vie w th at it is no t an o miss ion at al l. T he letter of the appe llan t has been ref erred to repea te dly in the assess men t order. Its con te n ts have been dis cussed and f or reasons mentioned , the exp lanation/su bmissions/d isc losu re of the appellant has been d iscarded by the Assessing Of f icer. It is no te wor thy that the Assess ing Of f icer gave a f ur ther oppor tun ity to subs tan tia te his claims of commiss ion business made through the le tter d ated 04.12.2102 by recording the s tate men t of the appe llan t under sec tio n 131 of the Ac t, wh ich h as been f ur ther d iscussed in par a ( 10) of the assess men t order. The Ass essing Off icer has s ta ted th at even on that occ asion, the appellan t was unab le to p roduce an y documen tary evidence in suppor t of th is c laim of running a co mmiss ion bus iness. Thus, the pos ition that obta ins is th at the contents of le tter da ted 04.12. 2012 have been d iscuss ed in f our par agr aphs of the impugned assessment order. Acco r dingly, there c anno t be a v alid reason f or the appellan t to raise a gr ievance that the s ame was ign ored. Moreover, since the u nder ly ing submiss ion le ading the 'd isclo sure' was itse lf rejec ted, there was n o necess ity, co mpelling or o the r wise, f or the Ass essing Of f icer to men tio n the amoun t that the appellant f elt was his und isc lose d in co me ar is ing f rom the und isclosed three bank ac coun ts. In v ie w of th e discuss ion on the conte n ts of le tter dated 04.12.2012 and the re jec tio n of its submiss ions b y the Assessing Of f icer, nothing tur ns on the f ac t th at the f igure of Rs. 6,10,100/- was no t men tioned. There is no require me nt f or th e Assess ing Of f icer to verb atim repr oduce e ach word of submiss io ns made by the assessee during the co urse of scrutiny assessme nt proceedings. Fro m the sequence of events d iscussed above, the re is nothing to even remo te ly ind icate an ele ment of bias as alleged by the appellan t.
6.4 The reliance p laced on the dec ision of the Hon'ble Supre me Cour t in the c ase of Indore Mal wa United M ills L td. vs S ta te of Madhy a Pr adesh [1996] rep or ted in 60 ITR 41, is misconce ived. The dec is ion there was based on its o wn pecu liar se t of f ac ts and h as no application to the f acts of the appeal unde r cons ider ation. For th is 20 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 propos ition, it would be adequate to reproduce the f ollo wing f rom the af oresaid dec is ion:
"The Assessing Of ficer, the Appella te Author ity and the High Cour t only re lied upon the en tr ies in the Sale Con tr ac t Register and the Daily Yarn Production Regis ter f or the purpo se of ascer tain ing the u nexplained shor tage of yarn, thoug h they d if f ered in the matter of giving allo wances f or the coun t dev iation, e tc. The Assessing Of f icer, in his order relating to the assessmen t year 1940, g ives reasons f or dis card in g the bo oks and records of the assessee in regard to quantita tiv e p ar tic ulars. Bu t the Appella te Author it y and the H igh Cour t d id no t expressly re jec t the s aid docu men ts , and inde ed they relied upon the entr ies in the Sale Contr ac t Regis ter as well as those in the D aily Y arn Produc tion Regis ter. For the subsequen t ye ars, even the Assessing Off icer did no t re je c t the regis te rs ......"
6.5 In the case of the appe llan t, it is ex-f ac ie app are n t th at the vers ion of the appellan t through the le tter d a ted 04.12.2012 has be en taken on record, considered, dis cussed and then d iscarded by the Assess ing Of f icer. It would be essential to iter a te that no grounds have been taken by the appellan t on the na ture and mer its of the add itions made by the Assessing Of f icer. T his be ing so, it is not necess ary to dwe ll upon any f ur ther on the I dis c losure' made in the le tte r as to whe th er it was appropr iate or ar b itr ar y. The conten ts thereof do not imping e on the var ious grounds pressed in the ins tant appe al. Under the c ir cumstances, the ground of appeal taken f ails and is, theref ore, dis missed.
7.0 GROUND NUMBE R (5) 7.1 In the las t ground of appeal, the appe llan t has s ta ted that the Demand No tic e served by the Asse ss ing Of f icer is incons is ten t with For m No.7 prescr ibed by the Income-tax Rules , 1962 ( here in af ter, 'the Ru les'). It wa s submitted th at the De mand No tice was in an obsole te For m and th a t the in applic able por tions were no t de leted. On the bas is, the appellan t urged that the No tice of De mand be quashed as the iss ue of a valid no tice enf orceable in la w is a pre- cond ition in respec t of assessmen t proceedings .
7.2 As per ru le 15 of the Ru les, the Notice of Demand is required to be sent in For m No.7. On a co mpar ison of the prof orma spe cif ied and the De mand No tice ac tually issued by the Assess ing O ff icer, there are a f e w d if f erences betwe en them that are d isce rn ible. In o ther wo rds, the De man d Notice is no t ex ac tly in the s ame f orma t as prescr ibed by the Ru les. There are some' copy and p as te' errors leading to ju mp ing of serial numbers and a f ew ex tr a s en te nces do appe ar in the De mand No tice issued by the Assessing Of f icer. Ho wever, a substa n tial por tion of the impugned De mand No tice is iden tical to the one th a t has been prescr ibed. More impo r tantly, the 21 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 Demand No tice served on the appellan t, cle ar ly s tate s th at it is issued under section 156 of the Ac t and is as per rule 15 of the Rules. The s ta tus of the appellant an d his P. A.N has be en s pec if ied along with the assessmen t ye ar f or which the de mand has been raise d. The ne t amoun t payable has been men tioned. The said Demand No tice du ly be ars the signature and se al of the Assessing Of f icer along with the date and place of issue.
7.3 It is we ll-settl ed that if a notice is in s ubs tance and ef f ect in conf ormity with or according to the in te nt and purposes of the A ct, any def ec t, mis take or omission will no t inv alid ate it. In the c ase of CIT vs J ag at Novel E xhibitors (P) Ltd [2012] repor te d in 248 CTR 217, the H on'b le De lhi H igh Cour t h as observed as under (H.N.):
"Sec tion 292 B h as been e nac ted to cur ta il and negate techn ic al ple as due to a ny def ec t, mis take or o miss ion in a no tic e/su mmons/re tu rn.... .. It has a salutar y purpos e and ensures th a t technical objections, with out subs tan ce and when there is eff ective compliance or compliance with in te n t and purpose, do no t come in the way or af f ec t the v alid ity of the assess men t proceedings Object and purpose behind sec tion 292B is to ensure th at techn ic al ple as on the ground of mis take, def ect or o mission in summons/no tice sho uld not inv alid ate the assessment proceedings, when no conf usio n or pre jud ice is c aus ed due to non-observance of techn ic al f ormalitie s. The objec t and pur pose of th is sec tion is to ensure that procedur al ir regular ity( ies) do no t v itiate ass essmen ts. No tice/su mmons may be def ec tive or there may be o miss ions but th is wo uld no t make the no tice/su mmons a nullity. V alid ity of a summo ns /notice has to be examined f rom the s tand point whe the r in subs ta nce or in ef f ect it is in conf ormity and in accord ance with th e in te nt and purpose of the Ac t. Th is is the purpor t of sectio n 2 92B."
7.4 Taking into acc ount the f ac ts men tioned above, there can no t be two v ie ws th at the Demand No tice se rved on the appe llant ans wers quite s atisf ac tor ily to the af orementioned legal propo s ition. The objec tions r aised by the appellan t are, the ref ore, hyper- techn ical. In the case of C IT vs Karnani Indus tr ial B ank L td [1978] repor te d in 113 ITR 380, the Hon'ble Calcutta H igh Cour t has held that the purpose of Demand No tice is to br ing to the atte n tion of and de mand f rom the assessee, the amou nt of tax includ ing in terest and other ite ms due. T he Hon'ble H igh Cour t observed tha t it is the du ty of the Assess ing Of f icer concerned to give th is notice and there is no bar to the iss ue of such a notice, if a proper or co rrec t no tice was no t issued e ar lier.
7.5 In the c ase of P.N. Sas ikumar vs. CIT [1987] repo r ted in 35 Tax mann 131 (Ker. ), cited by the appellan t, the matte r rela te d to the issue of notice under section 148 and not to a De mand No tice under sec tio n 156 of the Act. Fur ther, an impor tan t as pec t was th at there 22 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 was no mater ial to show that the re- assess men t no tice was served upon the assessee or his representative, le ad ing to the conclusion arr ived at by the Hon'ble Ker ala H ig h Cour t that the n o tice under sec tio n 148 of the Ac t was no t served accord ing to law and that the said assessee wa s not c alled upon to f ile the re tur ns. In th is background, it is apparen t that the case law is d is tingu ishable on essential f ac ts an d operates in a dif f erent sphere. The case of Ganesh Sug ar Mill s vs. State of U.P and Ors. [A IR 1986 SC 743 dated 20-12 -1985] c ited by the appellan t, was in the co ntex t of the U. P Sugar cane (Pur ch ase Tax) Ac t, 19 61. The re, the Hon'ble Supreme Cour t no tice d th a t in the impugned no tice the per iod f or which tax was p aid late or th e per iod f or wh ich th e tax was due had no t been indic ated. Even th en, the Hon'ble Supreme Cour t de clined to quash the no tice and restored the ma tte r to the co mpe te nt author ity. It is , theref ore, eviden t tha t this dec ision is en tire ly d if f erent f rom the f acts of the presen t appeal. S imilar ly, in the c ase of N.N Subr amania Iyer vs. UOI and Anr [1974] re por ted in 97 IT R 228 ( Ker. ) and also relied upon by th e appellant, th e ma tte r wh ich h as so me rese mblance to the issue a t hand h as been dis cussed in par a (5) of the af oresaid order wh ich is reproduced belo w f or ready ref erence:
"5. The penalty no tice, exhibit P-2, is illegal on the f ace of it. It is in a pr in ted f orm, whic h co mprehe nds all poss ible grounds on which a pen al ty can be imposed under Sec tion 18(1) of th e Weal th -tax Ac t. The no tice has not struck off anyone of thos e grounds; and there is no indic ation f or wh at con tr aven tion the pe titioner was cal led upon to sho w c ause why a pe nal ty should no t be imposed."
It is apparent tha t the very ground on wh ich pen alty was imposed was no t ind ic a ted therein. These are no t the f acts related to the Demand No tice in the ins tan t appeal wh ich con tains all mater ial inf ormation. In th is ligh t, th is par ticular decis ion does no t co me to his ass is tance. In another c ase relied upo n, i.e., in In co me Tax Of f icer, Kolar C irc le and Another vs. Seghu Buch iah S e tty [1964] repor ted in 5 2 ITR 538, the gravamen of the d ispu te was tha t the Assess ing Of f icer did not issue f resh notice of demand pursuan t to the modif ic ation in the order of assess men t made by the Appe llate Ass is tant Co mmissioner, bu t by a letter inf ormed the respondent that he had to pay tax as reduced by the appe llate order. Pre mised on this, the Hon'ble Supreme Cour t ( ma jor ity v ie w) uphe ld the decis ion of the Hon'b le H igh Cour t tha t the Inco me - tax Of f icer could not, without issu ing f res h notices of de mand, af ter the Appe llate Ass is tant Co mmis sioner of Inco me- tax h ad reduced the tax ab le inco me, tre at the respondent as a def aul te r and tha t the proceed ing s of the Collec tor based on the cer tif ic ates issued by the Inco me- tax Of f icer were ille g al. As is ev iden t, these are no t the f acts obtaining in the ins tant ap peal where a signed Demand No tice h as been duly issued by the Assessing Off icer pursuan t to this o wn order of assess men t. T here are no appellate proce edings inv olve d here 23 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 leading to var ia tio n of the demand or igin ally r aised wh ich ought to have been re-compu ted and communica ted to the appellan t. Resul tan tly, the af oresaid dec ision does no t lend itse lf to ho ld ing that the corresponding assessmen t order itse lf has to be quashed.
7.6 In the c ase of Rasiklal Amr itlal Doshi vs A. Nundy Addl. IT O [1961] 42 IT R 3 5 (Born.) cited by the appellant, the iss ue was that no no tice of de mand can be issued in the absence of an order of assess men t p assed under the Act. There, the pe titioner had alleged that no such order exis ted. The Hon'ble H igh Cour t f ound mer it in the alleg atio n sin ce with in a shor t time of his h av ing r ece ived the notic e of demand the pe titioner had applied f or a copy o f the order and altho ugh, ther eaf ter, he had repea ted his de mand f rom time to time, he was no t supp lied with a copy of the order and th ree years later he was inf ormed tha t the order was no t tr ace able. In this appe al, there is no dispu te regarding th e assess men t ord er received by the appe llan t along with the Demand No tice. Co pies o f both h ave be en f iled by the appellant along with the other appe al d ocumen ts.
7.7 T he appe llan t has also men tioned that the tax, pay ment ch allan was no t rece ived by him. Be th at a s it may, the same does no t opera te to d imin is h the valid ity of the assess me nt orde r. A ch allan c an ( and of ten is) obtained by an assessee f rom the of f ice of th e Assess ing Of f icer even subsequent to th e p ass ing of the order. The taxp ayers no w h ave the op tion of making on line e-payme nts dire c tly on the bas is of procedures that are av ailable in the public do main through webs ites. In the f inal analysis, it is app aren t that there was no amb iguity in the matte r of its payable tax dues wh ich f aced the appe llan t. He was a ware of the pre cise demand th at was required to be paid pursu an t to the order of asse ss men t pas sed by the Assess ing Of f icer. H ad th is no t been so, he would no t have moun ted a pro tr acted exerc ise f or seeking its stay bef ore var io us au thor ities, includ ing the Hon'b le Gauh ati H igh Cour t as descr ibed in the preced ing par ag r aphs of th is order. The minor inf ir mities in the Demand No tice s erved upon h im is no t such that wo u ld lend the mse lves f or declar ing it as nu ll and vo id. As me ntioned, it is subs tan tially in conf ormity with the prescr ibed For m and conveys all the par ticulars an d f ac ts that are essen tial to the appe llan t. The said De mand No tic e is, theref ore, held to be v alid inso f ar as the liabil ity of the ap pellant to make payment of INCO de mand is concerned. Howev er, the Assessing Of f icer is adv ised to is sue a f resh Demand No tice in the prescr ibed For m and challan to the appe llan t at the ear lies t. For the r easons men tioned above, the ground of appeal f ails and is, theref ore, dismissed.
8.0 Bef ore par ting , it would perhaps be appropr iate to mak e a men tio n tha t the crux of the matter is the de tec tion of three und is c losed b ank acco un ts o wned by the appe llant. The add itio n to the re turned in co me is no t conjec tur al or an es tima te bu t ar ises f rom the unrepor ted tr a nsac tions in the m. An assessee has a s tatu tory oblig atio n to f ile a tru thf ul return of income. The appellan t h as not 24 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 dispu ted the ch ar ac ter izatio n or the quan tif ic ation of und is c losed inco me as de ter min ed by the Assessin g Of f icer. The appellan t oug ht to have himse lf disclosed the exis te nce of the bank accounts and taken in to accoun t th e resul tan t prof it element while f ilin g h is re turn of inco me. The ch allenge to the assessmen t order has bee n mounted on mul tiple hyper-technic al as pects as h as been elabor ate ly discussed. These are s ans mer it an d, consequen tly, do no t def eat the liab il ity of tax leg itimately due to the Exchequer. The scrutiny assess men t procee ding s were initia ted, no tices were duly served, the ap pellant par tic ipated in the proc eedings , the asses s ment was comp le ted on mer its af ter consider ing var ious p le as r aised by the appe llan t. The jur is dic tion to assess of the Assess ing Off icer and the liabil ity to p ay the tax on the par t of the appe llan t ar e f ree f rom doubt. The latte r is f ounded on sec tion 4 of the A ct, wh ich is the charg ing sec tion. There is no dispute that the inco me assessed by the Assess ing Of f icer belonged to th e appe llan t. It is e qually we ll- settle d th at ma tte r s rela ting to f inan cial la ws have to be v ie wed with greater la titu de than la ws touc hing c iv il righ ts. Even if it is presu med f or argumen ts sake tha t the appe llate objections r aised here f all in the realm of procedural la w, one is to take no te of the observations of th e Hon'ble Apex Cour t in the c ase of Saiyad Mohammad Bakar El-Edros- (De ad) by LRs Versus Abdulh abib Has an Ar ab & Ors. repor ted in (1998) 4 SCC 343, as und er:
A procedur al law is al ways in aid of jus tice, not in contr ad ic tion or to def eat the very object wh ic h is sought to be achieved. A proce dural law is al ways subserv ien t to the subs tan tive la w. Nothing can be given by a procedur al law wha t is not soug ht to be given by a subs tan tive law and no thing c an be taken a way be the procedur al law what is g iven by the su bs ta ntive la w.
9.0 In su m, there is no tenable basis to ho ld tha t the impugned assess men t order p assed by the Assessing Of f icer is inf ir m and str ic ken with such inf ir mities so as to be declared as null and void. The valid ity of the same is, theref ore, upheld, unhes itatin gly.
10. In the resul t, the appeal, with all its grounds rais ed, is dis miss ed. Order passed under sec tio n 250 re ad with se c tion 25 1 of the Ac t. "
8. In addition to the above, we would like to make a specific mention in reference to ground no. 4 dealt by Ld. CIT(A) in his order in para 6 wherein a reference is made to a letter dated 04.12.2012 addre ssed to the Ld. AO in which assessee has averred that he had voluntarily offered undisclosed income of 25 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 Rs.6,10,000/-. Copy of the said letter is placed in paper book at page 73 and 74. From the 2 n d paragraph of this letter, we note that assessee has stated "I may kindly be excused f or the f ault committed by me and inconvenience caused." He has further stated that " I assure that this thing will not happen in f uture and lastly, I would also request you f or not initiating any f urther ac tion." In the above context, we take note of the assessment order passed u/s. 143(3) for the immediately next assessment year i.e. AY 2011-12 dated 14.03.2014, which is place d in the paper book at pages 81 to 84. In this assessment order also, there are total deposits of Rs.4,03,20,540/- in the two undisclosed bank accounts for which Ld. AO has given the same tre atment as in AY 2010-11. The reason for making this reference is that in the letter dated 04.12.2012 submitted before the Ld. AO, assessee has very categorically state d that such a thing as committed by him will not happen in future. Howeve r, in the very next year, similar fault has been committe d by the assessee, for which he must be aware of having committe d such a fault but stated otherwise in the aforesaid lette r. The conduct and intent of the assessee does not reflect what is stated by him in his letter to the Ld. AO.
9. Thus, conside ring the above elaborate and well reasoned observations and findings of the Ld. CIT(A) as well as taking into account the paper book placed before us, we do not find any reason to interfere with the same in respect of first five grounds of appeal raised by the assessee. Here, it is import to note that the two page written submission placed by the assessee before the Tribunal contains the same line of 26 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 argume nts and reference to judicial precedence which were made before the Ld. CIT(A). This has already been elaborately dealt with and does not need any further discussion in addition to what has already been made by Ld. CIT(A). Accordingly, ground nos. 1 to 5 of the asse ssee are dismissed.
10. Before us, assessee has taken two further grounds vide ground nos. 6 and 7. Ground no. 6 is again on a similar technical issue of failure on the part of Ld. CIT(A) to issue the appellate order within fifteen days of the last he aring. To our mind, similar technical issue has already been elaborately dealt with by the Ld. CIT(A) in the context of passing an assessment order by the Ld. AO and, therefore, does not nee d any further specific adjudication. Accordingly, this ground is also dismissed in terms of observations made by the Ld. CIT(A) while disposing ground nos. 1 and 2.
11. In ground no. 7, assessee has raised a technical issue of not following the directions of Hon'ble High Court of Gauhati in assessee's Writ Petition WP(C) 937/2014 vide order date d 03.03.2014. In this respect, we have perused the order of the Hon'ble High Court placed at pages 89 to 91 of the paper book. To understand the direction give n by the Hon'ble High Court, we note that the direction is for expeditious disposal of the appeal by the Ld. CIT(A), preferably within a period of three months as an outer limit, from the date of production of the order of Hon'ble High Court. On this issue, we note that the date of order of Hon'ble High Court giving this direction is 03.03.2014. The impugned order of Ld. CIT(A) disposing of the 27 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 appeal of the assessee is dated 15.05.2014 which is evidently within the period of three months as directed by the Hon'ble High Court. Thus, there is no disregard by the Ld. CIT(A) to the direction given by the Hon'ble High court in expeditiously disposing the appe al of the assessee. Accordingly, ground no. 7 of the assessee is dismissed.
12. In appe al for AY 2011-12 in ITA No. 08/GTY/2016, assessee has raised technical issues only for which again, Ld. CIT(A) has dealt with each of the issue elaborately, by passing a speaking order for this year also. It is worth reproducing the observations and findings given by the Ld. CIT(A) which comprehensively dealt the technical challenges raised by the assessee."4.1 GRO UNDS NO. 1, 2, 3 & 4
In these g rounds, th e appellant ch allenged the valid ity of no tices issued u /s 143(2) and 142. No tic es are s aid to be invalid on the f ollo wing re asons:-
( i) Per CBDT's in str uction dated 8 /9/201 0 on the to pic"
Selec tio n of cases f or scrutiny on the bas is of AIR re turns and subsequen t assessmen t pro ceedings" it was s tate d in par a number 3 th a t in all cases wh ic h ar e picked up f or scrutiny only on the bas is of AIR inf ormation, the no tic e u/s 143(2) of the Inco me- tax Ac t, 1961 should be clear ly s ta mped with " AIR Case". This was not done by the A.O. in h is no tice u/s 143(2) dated 01/08 /201 2.
( ii) No tices issued u/s 142 dated 21. 06.2013 and 24. 01 .2014 we re no t in the pr escr ibed f orm. In those no tices issue d, the AO me n tioned the r equireme nts as ( a) (b) and (c) ins te ad of (i), ( ii) and ( iii) as laid do wn in sub-se ction 1 of section 142. Bes ides, the A.O. issued notices u/s 142 twice where as the Ac t s ays th a t a no tice may be served.
4.2. 1 Submiss ions made by the appe llan t have been examined. As f ar as no tice u/s 143(2) d t. 01.08.2012 which the appe llan t c laimed should have bee n c le ar ly s tamped wit h" A IR C as e" is concerned, it is 28 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 seen that the no tice bears the ter m II AIR on ly" bef ore th e ma in bod y of the le tter. From th e notice itself , it c an eas ily be inf erre d tha t the c ase was se lec ted based on AIR inf or ma tio n. S ta mpin g the no tice with " A IR Case " or pr in ting" AIR only" does no t hav e ma ter ial dif f erence based on whic h the notice can be inv alid ate d. I am no t incline d to tre at the notice u/s 143(2) as inv alid and quash the assess men t order merely be cause th e notic e was no t s ta mped with "AIR c as e," s ince the ter m, 'A IR only' was alre ady me ntioned in the notic e.
4.2. 2 As f ar as is su ing two no tices u/s 142(1) and me ntio ning the requ ire me nts of th e notices in alphabetic al f orm of a, b & c r a ther than Ro man nu mbers of (i), ( ii) ( iii) are concerned, it is a f ac t that A.O. issued notices u/s 142( 1) on 2 1. 06.2013 and 24. 01.2014 and requ ire me nts of the no tice were numbered a, b & c ins te ad of (i), ( ii) and ( iii).
4.2. 3 Sub missions made by the appellan t have been c aref ully cons idered. T he AIR was unable to give any cogent re as on as to why the assess men t or der became invalid mere ly bec ause con ten ts of notic es u/s 143(2) we re numbered alphabetically and no t by ro ma n numer als. H e f ailed to give any precedent where H ighe r jud ic ial author ities he ld no tic es to be inv alid in s imilar c ir cums tances. The stand taken by th e appe llan t is theref ore rejec ted. Similar ly, on issue of no tice u/s 142(1) being issued twice, the argu ment made by the appe llan t is misp laced. Though sec tion 142(1) s ays th at f or mak ing an assess men t the Assessing Of f icer may issue a no tice, th is does no t me an tha t the A.O. c an issue only one no tic e and s top there. T here is no s pecif ic provision in the A ct wh ich de bars AO f rom issuing more th an one notices u/s 142(1) of the Ac t to make an assess men t. AO ma y issue notice u/s 142(1) consequen t to mater ials obtained f rom e ar lier notices issued u nder the s ame sec tion. The AIR also f ailed to po in t out any sta tu tor y bar on Assess ing Of f icer f rom issuing no tice u/s 142(1) more than once in the co urse of an assess men t procee ding 4.2. 4 In v ie w of the above discuss io n, ground number 1, 2 3 & 4 raise d by the appe llan t are dismissed.
4.3 GROUND NO.5 & 7:
In these two grounds, the appellan t c hallenges the valid ity of assess men t order f or the reasons that the A.O. had v io lated CBDT instr uctio n reg arding selec tio n of cases f or scrutiny and also examining each an d every item of assessee's bus iness tr ans ac tion. Dur ing the course of appella te proceed ing, the A IR s tate d that s inc e the c ase c ame un der scrutiny due to AIR inf ormation, the A.O. should res tr ic t h imse lf to the con te nt of A IR inf ormation. In the wr itte n submiss ion as well as verbal explana tion, A IR s tated that AO thoroughly examined the books of accoun ts of the assessee. Copy of Annexure to no tice u/s 1 42(1) was en closed where in AO had 29 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 asked the assess ee to produce boo ks of accounts, de tails of inves tmen t, b ank a/c. ev idence in suppor t of re turn of inc o me e tc.
4.3. 2 Fro m the assessmen t order, it can be s een tha t there was A IR inf ormation regarding exis tence of two bank accoun ts v iz. A/c No. 2710101001326 33 with Axis Bank Ltd, Silchar an d A/c No .
1063100000147 9 with HDFC Bank Ltd. Silch ar in the name of the assessee. T he AO noted that the accounts were seen to be und is c losed af ter examina tion of retur n of inco me, aud ite d balance shee t, P&L A/ c and books of accounts produced dur ing the course of assess men t. A per usal of the assess men t o rder sho ws th at the AO had d we l t on ly upon the undisc losed bank accounts and es tima tio n of inco me f rom tr ansac tions done thr ough the two und is closed b ank accoun ts.
4.3. 3 In par a No. 2 of CBDT Ins truction d a ted 30.06.2011 it was state d that scr u tin y of AIR based cases should be limited on ly to aspe c t of inf orma tion rece ived through AIR. Cases c an be taken up f or wider scru tin y only with approval of the ad minis tr ative Co mmiss ioner and where poten tial es capement of inco me apar t f rom AIR inf ormation is more than Rs. 10 lakhs. In the present c ase, the A.O. had rece ived inf orma tion throu gh AIR tha t there exis ted two bank accoun ts in the name of assessee. To verif y whe ther the tr ans ac tions in the accoun ts were ref lec ted in the books o f accounts, the AO had called f or inf ormation f rom assessee. Inf orma tio n called f or vide Annexur e to no tice u/s 142(1) da ted 21.06.2013 is reproduced belo w:
ANNEXURE -A
1. A br ief no te on na ture of business ac tivities and addre ss of all the places including th e godowns where business ac tiv ities are carr ied on by you, S ales Tax regis tr ation n umber & TAN ( if any)
2. Ban k s ta te men ts of all bank accounts main tained by you dur ing the relev an t pe r iod.
3. De tails of investmen t made and details of source of inves tmen t.
4. All boo ks of acco un ts mainta ined f or f inanc ial ye ar 20 10-11.
5. De tails and evidences in suppor t of your re turn.
4.3. 4 The na ture of inf ormation called by AO and his ac t of checking the accoun ts as to whether en tr ies in two b ank acc ounts were ref lec ted in regu lar books of accoun ts c anno t be said to be digress ion f rom Board's Ins truc tion mentio ned ear lier. Ra ther, it was the duty of the AO to thoroughly c heck whe ther the entr ies in the two accoun ts are ref lec ted anywhere in the regular books of accoun ts ma in ta in ed by the assessee. I do no t thin k the AO had exceeded his br ief . It is also seen that in the assess ment order, the AO had res tr ic ted h imse lf to the two bank accounts inf or ma tio n of whic h was receive d through A IR. Ad dition made by AO is solely based on en tr ies in the two bank acco unts. Cons ider ing the f acts on reco rds, the assessmen t order can not be tre ated as inv alid f or being 30 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 agains t CBDT's Ins truc tion. Ground Nos. 5 and 7 are decided agains t the appellan t.
4.4 GROUND NO.6 4.4. 1 Appe llan t con te nded th at the last d ate of hear ing was 21.2.2014 and the da te f or compliance to summons was 12.3.2014 while the assessmen t order was s igne d on 14.3.2014, the same was passed to the appellan t only on 27.0 3.2014. A ppe llan t pr ayed that since the order was passed af ter f our tee n d ays of las t hear ing , it was ag ains t CBDT Circu lar [Le tter No. 241/2 3/70 dated 23rd October, 1970], an d as su ch, the assess men t order shou ld be treate d as inv alid.
4.4. 2 In th e s tatemen t of f ac ts f iled, the appe llant, s tated tha t the assessee co mplied with summon on 12.3.2014. If the ass essee comp lied with su mmon on tha t d ate tha t p ar tic ular d ate h as to be taken as las t da te of hear ing. The orde r was s igned on 14.03.2014, theref ore there is no violation of Circular of Board ref erred to by the ap pellan t. T he c ir cular ref erred to by the appellant is an ex tr ac t f rom manual of Of f ice Procedure Chap ter XIV whic h contains p ar t of CBDT 's le tter No. 241/23/70 dated 23rd Oc tober, 1970. It s ays that AO should pass assess men t o rders immedia te ly af ter he ar ing is over and even in co mplic ated c as es involving volu minous mater ials orders should be passed with in f our tee n days af ter the d ate of las t hear ing. T he Ins tru c tion of the Board was not violated by the AO as the d ate of comp liance to su mmon was 13.3.2014 and the date of assess ment order is 14.3.201 4. The ground is theref ore decided agains t the appe llan t.
4.5 GROUND NO.8 4.5.1 Appellant challenged validity of assessment order because the AO gave false and unlawful conclusion in Para-11 of the order.
4.5.2 In para 11, AO states: " On the basis of discussions made above, the total income of the assessee for assessment year 2011-12 is computed as under." In the written submission, the appellant states" one single man cannot discuss with him. Facts of the case and his opinion without applying judicial mind in the foregoing paragraphs cannot be the learned A/O's discussion. Therefore, the assessment order is invalid".
4.5.3 I find that the AO had detailed discussion regarding two undisclosed bank accounts and he had judiciously made addition of undisclosed income. I find no reason to treat the assessment order as unlawful or invalid. The ground is decided against the appellant.
4.6 GROUND NO.9 4.6.1 In this ground, the appellant challenged the validity of assessment order because challan given to assessee was unsigned. In this regard, it is seen that the AO had signed in the 31 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 assessment order, computation of income and the notice of demand. Merely not signing in the challan cannot make a duly signed assessment order invalid. This ground is also decided against the appellant.
The grounds preferred in this appeal are decided against the appellant. Order of the AO is , upheld.
5.0 Order passed under section 250 read with section 251 of the Act. "
13. Before us, for this appeal also, assessee has furnished a two page written submission and a paper book containing 33 pages with index dated 06.11.2017. This paper book also does not have certification as to which documents were before which authorities below, as required under Rule 18 of ITAT Rules. Asse ssee has also made ground wise submission in two pages vide his submission dated 06.11.2017. We would broadly summarise the technical challenges put-forth by the assessee without controverting on the additions made by the Ld. AO in respect of transactions made by him in the two undisclosed bank accounts.
13.1. The foremost technical issue raised is that notice issued u/s. 143(2) placed at page 3 of the paper book is invalid as it is not stamped with "AIR Case". From the perusal of it, we note that "AIR-only" is mentioned explicitly on the said notice. To this effect, Ld. CIT(A) has ve ry lucidly addressed this technical issue raised by the assessee which can be referred in the order extracted above. We find that mentioning of "AIR- only" instead of "AIR-case" does not have any material effect on the outcome of the assessment for the compliance made by the Ld. AO for which the assessee has agitated. In respect of notices issued u/s. 142(1), the technicalities raised by the 32 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 assessee is in re spect of mentioning of particulars of the issues listed therein, which according to the assessee, should have been in roman numbe rs instead of alphabe tical form. Assessee has also raised te chnical issue that only one notice u/s. 142(1) is permissible to be issued by the Ld. AO. These technical challenges have also been succinctly dealt with by the Ld. CIT(A) in his order quoted above. We do not find any reason to inte rfere with the findings given by him. Other technical grounds raised by the assessee including restricting the assessment only to the conte nt of AIR information, passing of the assessment order within 14 days of last hearing, unsigned challan given to the assesse e and that the Ld. AO has given false and unlawful conclusion in the impugned assessment order.
13.2. From the elaborate discussion made by the Ld. CIT(A) in his orde r on all these technical issues raised by the assessee, we unhesitatingly hold that such procedural technicalities do not have any material bearing to alter the outcome of the assessment complete d by the Ld. AO, more particularly when all the due procedural compliances have been made as noted by the Ld. CIT(A) while giving his finding, extracted above. We do not find any reason to interfere with the we ll re asoned observations and findings given by the Ld. CIT(A). Thus, grounds taken by the assessee in this appeal are dismissed.
14. Before parting, from the perusal of written submission made by the assessee to the Tribunal, it is noted that the pleadings are in the nature of mercy petition by stating that 33 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 assessee is an illiterate person, unfit to travel due to health problem, financially very weak not having capacity to engage a representative for attending the hearings before the Tribunal. Such pleadings by the assessee are found to be in stark contradiction while looking at all the timely filing of replies and appe al forms at all the stages, including before us. All the filings and submissions are in English language which must have been prepared by the appropriate professionals and assessee must have been made to understand them before their filing and submission.
14.1. There is no equity or intendment in tax laws. Equity and taxation laws are strangers. On the sympathy sought by the assessee, it is worth quoting from the decision of Hon'ble Supreme Court in the case of Murarilal Mahavir Prasad Vs. B R. Vad [1974] 37 STC 77 (SC), in that famous passage marke d "by a happy turn of the phrase, Ro wl att J. : said 'there is no equity about a tax. T here is no presumption as to tax'. There is no equity about a tax in the sense that a provision by which a tax is imposed has to be construed strictly regardless of the hardship that such a construc tion may c ause either to the treasury or to the taxpayer. If th e subject f alls squ arely within the letter of law, he must be taxed, ho wsoever inequitable the consequences may appear to the judicial mind. If the revenue seeking to tax cannot bring the subject within the letter of the law, the subject is f ree no m atter th at such a construction may cause serious prejudice to the revenue. In other words, though what is called equitable construction may be admissible in relation to other statu tes or other provisions of a taxing statute, 34 ITA No.211/GTY/2016 & ITA No. 8/GTY/2016 Bimal Paul, AYs: 2010-11 & 2011-12 such construction is not ad missible in the interpretation of charging or taxing provision of a taxing statu te."
15. In the result, both the appeals of the assessee are dismissed.
Order pronounce d in the open Court on 6th October, 2023.
Sd/- Sd/-
(Rajpal Yadav) (Girish Agrawal)
Vice President Accountant Member
Dated: 6th October, 2023
JD, Sr. P.S.
Copy to:
1. The Appellant:
2. The Respondent
3. CIT(A), Shillong
4. CIT
5. DR, ITAT, Guwahati Bench, Guwahati
6. Guard file
//True Copy//
By Order
Assistant Registrar
ITAT, Kolkata Benches, Kolkata