Income Tax Appellate Tribunal - Panji
Assistant Commissioner Of Income Tax, ... vs Smt Vimala Devi Parwal, Jaipur on 21 September, 2017
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM
vk;dj vihy la-@ITSSA No. 08/JP/2011
fu/kZkj.k o"kZ@Assessment Year/Block Period : 1988-89 to 1998-99
Assistant Commissioner of Income Tax, cuke Smt. Vimla Devi Parwal,
Circle-3, Vs. H-3, Todarmal Marg,
Jaipur. Bani Park, Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No/GIR No. AAVPA 0120 F
vihykFkhZ@Appellant izR;FkhZ@Respondent
vk;dj vihy la-@ITSSA No. 10/JP/2011
fu/kZkj.k o"kZ@Assessment Year/Block Period : 1988-89 to 1998-99
Smt. Vimla Devi Parwal, cukeAssistant Commissioner of
H-3, Todarmal Marg, Vs. Income Tax,
Bani Park, Jaipur. Circle-3,
Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No/GIR No. AAVPA 0120 F
vihykFkhZ@Appellant izR;FkhZ@Respondent
jktLo dh vksj ls@ Revenue by: Shri Varinder Mehta (CIT)
fu/kZkfjrh dh vksj ls@ Assessee by : None
lquokbZ dh rkjh[k@ Date of Hearing : 19.09.2017.
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 21/09/2017.
vkns'k@ ORDER
PER SHRI KUL BHARAT, J.M.
These two cross appeals one by the Revenue i.e. ITSSA No. 08/JP/2011 and other by the Assessee i.e. ITSSA No.10/JP/2011 pertaining to the Block Period 1988- 89 to 1998-99 are directed against the order of Ld. CIT(A)-I, Jaipur, dated 31.03.2011.
2
IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.
First we take up Assessee's appeal in ITSSA No. 10/JP/2011 pertaining to the Block Period 1988-89 to 98-99.
The assessee has raised the following grounds of appeal:-
"1. That the Ld. CIT(A) went wrong in holding that the notice issued u/s 15BBD by JT Commissioner (Assit.)was valid whereas the JT Commissioner never hand Jurisdiction over the assessee.
2. That the Ld. CIT(A) went wrong in holding that the service of notice by affixture is a cognised mode of service of notice but has not decided about the validity of service.
3. That the initiation of proceeding by issuing notice u/s 158BD is bad in law and illegal.
4. That the Ld. CIT(A) went wrong in holding that there was no lack of opportunity.
5. That the "A" carves to either make additions or deletion or amendment in the grounds of appeal on or before the date of hearing of appeal."
2. The only effective ground is against illegality of proceedings u/s 158BD of the Act and not providing sufficient opportunity to the assessee.
3. No one appeared on behalf of the assessee, on last date of hearing also no one appeared on behalf of the assessee and the notice sent to the assessee has returned un-served. Under these facts, appeal of the assessee taken up for hearing in the absence of the assessee.
4. Ld. D/R supported the order of the Ld. CIT(A) and submitted that there is no merit into the grounds of the assessee. He relied on the decision of the Ld. CIT(A).
5. We have heard Ld. D/R and perused the material available on record. We find that Ld. CIT(A) has given a finding on fact as under:- 3
IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.
"A search u/s 132 of IT Act was carried out on 15.10.97 at the residential premises of Shri Jugal Kishore Parwal where some incriminating papers were found and seized. Noticed u/s 158BD was issued and served upon the appellant on 15.11.99 by affixture as the service of notice was refused to be accepted. The appellant did not file any return for the block period though in the last but on para the AO has mentioned that NIL income was shown in the block return. Before the AO the jurisdiction was challenged on the ground that notice u/s 158 BD was issued by JCIT (Asst) Special Rang-2, Jaipur who had no jurisdiction over the assessee. Thus, notice issued was bad in law. The AO rejected objection of the assessee on the ground that the appellant has not objected by making claim within the period mentioned in 158 BD notice. That notice 158 BD was served on 15.11.99 but first objection was raised as late as on 7.11.01. As per section 143(3) no person shall be entitled to call in question the jurisdiction of an AO. The AO has also mentioned that all the provisions of I.T. are applicable in block assessment as mentioned in section 158 BH. That the Jurisdiction over search case was given to DCIT Circle-3, Jaipur, the AO.
The appellant vide letter dated 7.11.01 has also asked for copy of reasons recorded before issuing notice u/s 158BD by the AO but the same was not provided. The AO rejected objection of the appellant mainly on the ground that reasons were incorporated in show cause issued u/s 142(1) dated 2.11.01.
During the hearing of appeal, it was submitted by the AR that as per order u/s 124, the jurisdiction fall with Cicle-3, Jaipur whereas notice u/s 158 BD was issued by JCIT, Special Range-2, Jaipur who never had jurisdiction over the assessee. The appellant never had any information from the department about the change of jurisdiction. From the assessment order nothing is found why notice u/s 158 was issued by JCIT, Special Range-2, Jaipur whereas block assessment order was passed by DCIT Circle-3, Jaipur. The notice issued u/s 158BD is bad in law.4
IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.
Further, it was submitted that notice u/s 158 BD dated 12.11.99 was served upon the appellant by affixture on the outside gate of her residence. Section 282 provides that notice under the IT Act is to be served by post. From the assessment order, it is apparent that there is not mention that why notice could not b served on person. There is no mention in the Inspector's report who has affixed the notice? Also when notice was sent by registered post and when it was refused by the assessee? There is no mention about the name and address of witnesses who indentified the remises before affixture of the notice. There is no material on record which shows that the appellant was avoiding service of notice as subsequent 131 notices were duly served upon the assessee. As such, there was no valid service of notice and, therefore, assessment is to be quashed. Reliance was placed on the following case laws:-
1. CIT vs. Navee4n Chander 323 ITR 49 (P&H)
2. CIT vs. AVI Oil India (P) Ltd. 323 ITR 242 (P&H) It was further submitted that no satisfaction was recorded by the AO of Shri Jugal Kishore Parwal who was searched and completed assessment u/s 158BD. It is a pre requisite that the AO is to be satisfied that any undisclosed income, if belongs to any person other than the person who was searched u/s 132 then books of accounts or other documents or assets seized shall be handed over to the AO having jurisdiction over such other person and the AO shall proceed against such other person as per provisions of Chapter XIV B. Reliance was placed in the case of Manish Maheshwari vs. ACIT and Another 289 ITR 341 (SC). Reliance was also placed on the decision of Hon'ble ITAT Jaipur in the case of S.P. Goyal vs. ACIT Circle-2, Jaipur wherein following the above judgment of Hon'ble Supreme Court, it was held that initiation of penalty u/s 158BD was illegal and assessment made u/s 158BD/158BC/144 was illegal.
It was further submitted that no fresh opportunity was granted. Notice u/s 131 was issued to the appellant to present herself on 12.11.01 when the appellant had already departed for pilgrimage. The assessment was completed on 16.11.01 after 5 IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.
affording reasonable opportunity to represent and explain the facts. Lastly, it was submitted that AO has made ad addition of Rs. 5086614/- on protective basis. The assessment was made u/s 158BC/144 in the case of Shri Jugal Kishore Parwal was set aside the by CIT u/s 164. The addition made on substantive basis in the hands of Shri Jugal Kishore Parwal does not survive and thereafter no assessment was made in the case of Shri Jugal Kishore Parwal. The addition made on substantive basis has not been decided by deleting the same from his individual hands. That protective addition presupposes the existence of substantive additions. It follows that when there is no substantive addition, there can be no protective evidence as well. When the very base of income goes, the addition in the appellant's hand on protective basis will not survive. The amount of Rs. 5086614/- includes difference arising between the actual cost and the value worked out by DVO. With this, it was submitted that the addition made is not justified.
Contention of the AR is concerned. The AO has rejected objection of the appellant on jurisdiction on the ground that the appellant has objected very late only on 7/11/01 whereas the notice u/s 158BD was served on her on 15/11/99. That the jurisdiction over search cases was given to DCIT, Circle-3 Jaipur and therefore it is the DCIT, Circle-3 who has passed the order under appeal. There is no provision that the appellant should be informed about the change of jurisdiction. The ground of appeal on jurisdiction raised by the AR is rejected.
Regarding service of notice the AO has observed that the service of notice issued u/s 158BD was made by affixture. Certainly the AO has not mentioned why notice could not be served on person and also there is no mention in the Inspector's report who has affixed the notice. There is no material on record which shows that the appellant was avoiding service of notice as subsequent notices issued u/s 131 were duly served upon the assessee. However, as the notice was served through affixture which is a recognised mode of service of notice and further compliance to the subsequent notices issued by the AO justified the action of the AO of passing order u/s 158BD. The first and second grounds of appeal are therefore decided against the appellant."6
IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.
5.1 The above finding of fact is not controverted by the assessee by placing any material on record. Therefore, we do not see any reason to interfere into the finding of the Ld. CIT(A), same is hereby affirmed. Grounds raised in this appeal are dismissed.
6. In the result, appeal of the assessee is dismissed. ITSSA No. 08/JP/2011
7. Now we take up Revenue's appeal in ITSSA No. 08/JP/2011 pertaining to the Block Period 1988-89 to 98-99.
The Revenue has raised the following grounds of appeal:-
"Whether on the facts and in circumstances of the case and in law the Ld. CIT(A)-I, Jaipur is justified:-
1) Deleting the addition of Rs. 26,00.464/- made on the basis of the DVO's report and upholding the protective addition of Rs.
10,16,258/- without any basis.
2) Deleting the addition of Rs. 54,150/- and Rs. 7,83,251/- on account of undisclosed income made on protective basis without any basis."
8. Briefly stated the facts are that, a search action u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried out at the residential premises of assessee's son. At the time of search certain incriminating papers in the name of assessee where found and seized. Accordingly, a notice u/s 158BD of the Income Tax Act was issued to the assessee. Subsequently, the Assessing Officer made assessment u/s 158 BD r.w.s. 158 BC/144 of the Income Tax Act. Further the Assessing Officer noticed that there were certain deposits in the Bank Account No. 11275 in Syndicate Bank and Bank Account No. 21106 in Bank of Baroda. Thus, the Assessing Officer computing undisclosed income of the block 7 IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.
period is determined at Rs. 50,86,614/-. Against, this the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions partly allowed the appeal.
9. Against this, the Revenue is in appeal.
10. Apropos to Ground no. 1, deleting the addition of Rs. 26,00,464/- and upholding the protective addition of Rs. 10,16,258/-. 10.1 Ld. D/R supported the order of the Assessing Officer and submitted that Ld. CIT(A) was not justified in deleting the addition. 10.2 The Ld. CIT(A) has given finding of fact as under:-
"During the verification of Seized documents certain immovable properties as per the sale deed/argument were found in the name of appellant. The purchase price shown in the sake deed/agreement were compared with the DVO's report and on protective basis addition of Rs. 24,31,000/- in respect of purchase of property and Rs. 2600464/- in respect of valuation of DVO were made to safeguard the interest of revenue. The AO has stated that investment in these assets were made by Sh. Jugal Kishore Parwal but as the assets are in the name of the appellant and in the statement u/s 132(4) the appellant has stated that she is not having any income or immovable assets. These additions were made in the appellant's case on protective basis in the case of Smt. Vimla Devi Parwal whereas similar addition of Rs. 1,22,500/- was made in the hands of Smt. Rama Devi Parwal.
Contention of the AR is that in the table given at page no. 4 at Sr. No. 5 the figures in last two columns got interchanged. Thus the correct addition on protective basis should be Rs. 1016258/- and not Rs. 2431000/- as done by the AO. The figure of addition on account of DVO's valuation of the property remains as it is as Rs. 2600464/-.
Further it was submitted that DVO's valuation should not have been considered as it is an estimated value of DVO and not undisclosed income.8
IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.
The addition made on substantive basis has not been decided. Protective addition presupposes the existence of substantive additions and in view of 264 order of CIT substantive addition no more survives. Contention of the AR is concerned. Protective addition of Rs. 2431000/- is reduced to Rs. 1016258/- in respect of property under consideration which is in the name of the appellant. As the fact of substantive addition made by the AO in the hands of Sh. Jugal Kishore Parwal is still uncertain, till substantive addition in the hands of Sh. Jugal Kishore reaches its finality, to protect the interest of revenue protective addition of Rs. 1016258/- is hereby upheld. In the block assessment addition on account of investment in immovable property can only be upheld and therefore, further addition of Rs. 2600464/- made on the basis of DVO's report is hereby deleted being double addition. The grounds of appeal are decided partly in favour of the appellant."
10.3 The above finding on fact is not controverted by the Revenue by placing any contrary material on record. Therefore, we do not see any reason to interfere into the order of the Ld. CIT(A), same is hereby affirmed. The ground of the Revenue's appeal is dismissed.
11. Ground no. 2, is against deleting the addition of Rs. 54,150/- and Rs. 7,83,251/- on account of undisclosed income made on protective basis without any basis.
11.1 Ld. D/R supported the assessment order and submitted that Ld. CIT(A) was not justified in deleting the addition.
11.2 We have heard the Ld. D/R, we find Ld. CIT(A) has given finding on fact as under:
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IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.
"It was submitted by the AR that these deposits/ investments were made by Sh. Jugal Kishore though the accounts/investments were in the name of the appellant. In here statement recorded u/s 132(4) the appellant has stated that she had no income /investment. Further the satisfaction note for initiating 158BD proceedings clearly state that the investments /deposits made in the name of the appellant should b added in the hands of the appellant on protective basis. With this it was requested that these two additions made on substantive basis may be deleted.
Contention of the AR is considered. In the satisfaction note it has been mentioned that the appellant does not have any independent source of income and therefore, additions should be made on protective basis. In the assessment order also the AO has stated that the appellant is a housewife and prima facie does not have any source of income. Even no proof of filing of income tax return could be furnished. These facts clearly show that the additions cannot be made in the hands of the appellant on substantive basis. As other assets/income have been assessed by the AO in the hands of the appellant on protective basis, these4 two addition of Rs. 54150/p- and Rs./ 78325/- should also be considered as addition of undisclosed income made on protective basis. The First additional ground of appeal is thus decided in favour of the appellant."
11.3 The above finding on fact is not controverted by the Revenue by placing any contrary material on record. Therefore, we do not see any reason to interfere into the order of the Ld. CIT(A), same is hereby affirmed. The ground of the Revenue's appeal is dismissed.
12. In the combined result, both the appeals of Assessee and Revenue are dismissed.
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IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.
Order pronounced in the open court on Thursday, the 21st day of September 2017.
Sd/- Sd/-
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(BHAG CHAND ) ( KUL BHARAT )
ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member
Jaipur
Dated:- 21/09/2017.
Pooja/
vkns'k dh izfrfyfi vxzfs "kr@Copy of the order forwarded to:
1. The Appellant- The ACIT, Circle-3, Jaipur.
2. The Respondent - Smt. Vimla Devi Parwal, Jaipaur.
3. The CIT(A).
4. The CIT,
5. The DR, ITAT, Jaipur
6. Guard File (ITSSA No 08 & 10/JP/2011) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar 11 IT(SS)A No. 08 & 10/JP/2011 Smt. Vimla Devi Parwal, Jaipur.