9911796707
TMI Blog2009 (5) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Naveen Transport Company and engaged in the business of transportation. Assessee filed the return of income declaring the income of Rs. 8,04,716 and the same was scrutinised and the total income is determined at Rs. 1,61,04,320. The main addition by the Assessing Officer relates to unexplained sundry credits amounting to Rs. 1,52,99,600 (Rs. 1,51,11,635 plus Rs. 1,87,965). During the assessment proceedings, on finding that the assessee s B/S reflects huge sundry creditors, Assessing Officer asked the assessee to file the list of creditors and assessee complied with the same. On finding that the sl. No. 17 of the details filed is a consolidated figure of Rs. 1,51,11,635 and also in view of the admitted helplessness of the assessee vide the letter dated 6-12-2007 in explaining the said credits, the Assessing Officer held the amount of Rs. 1,51,11,635 as unexplained credits of the assessee. Further, the Assessing Officer made other additions on account of disallowances of expenses out of accounts of conveyance and travelling, office, vehicle and depreciation, staff welfare and telephone expenses. Further, the assessee did not raise the issue of the jurisdiction of the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue, i.e., the illegality of the notice under section 143(2) and illegality of the service of the same by affixture, the CIT(A) addressed to these issues in paragraph 14 of the impugned order and, as seen in para 14.1, held that the assessee has made two contradicting submissions regarding the notice and the service of the same. They are : ( i ) on one side, the said notice is patently invalid and illegal and on the other side, the said notice was not served at all by affixture on 31-10-2006. On observing that the assessee should have sought the inspection of records in case of doubts about the veracity of the dates of the proceedings relating to the notice and its service as well as the allegation of the anti-dating of the order-sheet, the CIT(A) held that the said order-sheet is true in view of the provisions of Civil Procedure Code since not proved contrary by the assessee. Further, on finding that the assessee raised these jurisdictional issues for the first time after expiry of one month of the issue of notice or the completion of the assessment whichever is earlier, the CIT(A) invoked the provisions of section 124(3) of the Income-tax Act for confirming the validity of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are manipulated ones and, therefore, the notice is illegal and void, ( b ) Regarding failure to service of the said notice, the counsel has argued that the said notice under section 143(2) should have been served directly on the assessee as assessee or his family members are very much available at the premises on the date i.e., 31-10-2006. The Counsel has relied on the affidavit filed (PB - Set C) in this regard, ( c ) Regarding the service of notice by affixture, the ld. counsel has detailed the prescribed manner of the service and some of the prerequisites in this regard are ( i ) Assessing Officer s satisfaction note about the reason to believe that direct service is avoided by the assessee; ( ii ) the written directions of the Assessing Officer to the officials to effect service by affixture; ( iii ) issue of independent witnesses for such service; ( iv ) bona fide report of the Inspector (visits to the premises twice, date of this report mentioned June 06, font of the letter and report etc. etc.; ( v ) Regarding the issue of onus relating to the service, as per the counsel, the onus is on the department. Relying on the judicial pronouncements on each issue referred to abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer on service, independent witnesses and not the other departmental witness, the DR has mentioned that they are mere procedural issues and any deficiency in such matters does not make the proceedings invalid or illegal. 8. We have heard both the parties and considered the assessee s request for deciding the legal issue first before going into the merits of the additions. We have also perused the paper books as well as the orders of the revenue authorities. It is noticed that the similar submissions were made by the assessee before the CIT(A), who did not attend to the said objections, such as, satisfaction of the Assessing Officer, direction of the Assessing Officer on service, independent witnesses and not the other departmental witness, etc. Further, it is noticed that the CIT(A) heavily relied on the provisions of section 124(3) while summarily rejecting the objection of the assessee without giving proper finding on the legal lacunae raised by ld. counsel. Thus, impugned order is a non-speaking order so far as the legal objections raised by the assessee. Notwithstanding these deficiencies in the order, in view of significance attached to provisions of section 124(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice are pillars of the assessment proceedings and, therefore, date of service assumes very significance. In other words, before adjudicating on the applicability of the provisions of section 124(3), it is legal necessity to give a finding on the validity of the notice and its service. In our opinion, invoking the said provision of section 124(3) before adjudicating the validity of the notice is like keeping a cart before the block. The CIT(A) should have adjudicated accordingly, before validating the deficiencies if any and before summarily dismissing the legal objections raised by the assessee. In our opinion, the issues such as, ( i ) satisfaction of the Assessing Officer on the requirements of service by affixture, ( ii ) direction of the Assessing Officer to the Inspector or the notice server for such service by affixture, ( iii ) need of the independent witnesses for such service by affixture etc., are the valid objections and they enjoy the strength of the various judicial pronouncements as argued by the Ld. counsel for the assessee before us. As seen from the revenue orders, these objections have not been addressed to either by the Assessing Officer in the remand report o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional evidences filed by the assessee before the CIT(A) as well as before us, it is noticed that the affidavit filed by the assessee before us confirming the presence of the assessee s people at home on the due date, is admittedly a vital piece of evidence and the same cannot be rejected outright without proper examination in the interest of the justice. Further, this information in the affidavit raises the vital question of the need for service by affixture when the party is at home at the said due date. Notwithstanding the assessee s failure to file the said affidavit, which does not involve the third party for making and filing the same, before the revenue authorities, we are of the opinion that the said affidavit must be admitted as additional evidence in the interest of justice. Further, regarding the additional/fresh evidences furnished and rejected admission in view of the assessee s failure to comply with the clauses ( b ) to ( d ) of the rule 46A, we have noticed that there is no enquiry or correspondence on the records on the sufficiency of the causes and CIT(A) did not take cognizance of the fact that the assessee s mother was suffering from cancer and ultima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 as asserted by the assessee in the affidavit; whether the notice was antidated; whether the satisfaction note and direction of the Assessing Officer to the Inspector for service by affixture is in existence; the fact relating to the report on identification of the premises by the independent witness and relevant panchanama in this regard; the legal significance all the above issues in matters jurisdiction; issue relating to merits and any other issues that the assessee may raise before him. Accordingly, all the legal issues raised by the assessee relating to the notice, service, jurisdiction, relevance of rule 46A are set aside to the files of the CIT(A) for fresh adjudication. However, the CIT(A) shall accord reasonable opportunity of being heard to the assessee, who is free file any other material/evidences in addition to the above-mentioned additional evidences having regard to the provisions of the law and rules in force. Accordingly, all the grounds relating to the legal issues are set aside. 16. The issues relating to merits of the additions ( i ) on account of the sundry creditors; ( ii ) rejection of admission of additional evidence under rule 46A, ( iii ) the verifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icient ground for the purposes of rule 46A. Per contra , the DR for revenue has argued stating that the impugned order does not contain any reference to the sickness of mother of the assessee. In this regard, the assessee has taken us through the contents of the affidavit referred to above and stated that the assessee has reasonable cause for failure file relevant details before the Assessing Officer. 18. Regarding the grounds relating to the verification of details, the counsel has argued stating that the Assessing Officer has failed to undertake any verification exercise in the claims of the assessee and he merely ignored to evidence filed before them without cross verifying the bona fide of them. Per contra, the DR has argued stating that the Assessing Officer is prevented from undertaking the verification exercise in the absence of names and addresses of the parties. 19. In our opinion, the said information is of great significance and the same should be admitted not only in view of the sickness of the mother of the assessee but also in the interest of the justice. Sickness of the mother of the assessee as sworn in the affidavit before us is a reasonable cause for ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
